Binance Coin or BNB is the native token to the single largest cryptocurrency exchange platform, operating with over 1.4 million transactions per second. With such a high volume of trade for such a popular platform, BNB offers unique solutions in both price and speed for the massive Binance exchange platform.
What is Binance?
The word Binance comes from two words, Bitcoin and Fiance, this combination of words is an accurate descriptor of this massively popular alt-coin trading platform. Created by Changpeng Zhao in July of 2017, the crypto to crypto trading platform boasts a range of operations around the world.
Binance and its native Binance coin, BNB operate off the ERC-20 Token Standard on its own Binance Chain, and functions as a blockchain-based, crypto coin-to-coin trading platform. At the time of writing Binance Coin token has a market cap of slightly over a 60Billion. Beyond its native token, it also boasts a wide range of financial services including staking, lending and even has its own popular Stablecoin Binance USD.
Binance is an integral part of the crypto community and in this article, we will explore its many use cases.
Binance Use Case: Cheap Gas Fees and Trading Fees
While this platform is host to roughly around 50 digital assets and all manner of trading options, BNB is its native coin and operates as its main form of charging gas. Gas the shorthand phrase that is often used to refer to transaction costs on a platform.
Gas prices vary and can in some regards run into a high degree of cost, this can be due to a variety of reasons such as high daily trading volume, high volume, or high competition, which can all contribute to expensive transaction costs. With this in mind, it is increasingly important for platforms to come up with solutions to reduce prices and foster competitive trading fees.
BNB offers an interesting use case in regards to lowering gas prices amongst the platform and encouraging greater token sales. Essentially Binance offers cheaper gas prices for business conducted via BNB among the platform. Originally the gas price reduction was a whopping 50% cheaper but over the past few years, it has lowered to 25%, which is still a very respectable price point.
Cheaper Trading With BNB
Binance Coin can also be used to trade on the Binance Dex, a decentralized exchange, for reduced trading fees, as well as for lower fees on the Binance exchange itself.
In a market that is as increasingly competitive as crypto, low transaction fees coupled with high speeds are a must-have for users, businessmen, retail investors, and institutional investors.
Binance Use Case: Burn Rates
Another interesting feature that BNB employs is its use of an annual token burn. What this refers to is the BNB practice of using 20% of the annual profit to purchase back their own token and destroying that token off the chain, or ‘burning’ it.
This practice has some long-term goals both for BNB and for the platform more broadly, which is to eventually reduce the overall volume of the token by 50% over the course of years and hard locking it at the 50% point. Conceptually this idea would increase the value of the remaining 50% of the tokens held by the various stakeholders and further increase the value of the platform.
This strategy is an interesting one and serves some purposes both in the mid to long term, and it is this kind of long-term future planning that attracts more and more users to the platform and the token. Essentially this practice promises a state of value increase one way or the other, and that kind of positive future forecast is attractive to one’s portfolio. This type of strategy within a crypto ecosystem generates hype, positive attention, and increases in speculative value.
By engaging in such a practice BNB shows itself to be geared towards creating value for its stakeholders and that makes an interesting use case both for the token and the broader BNB platform.
Binance Use Case: Widespread Adoption
The number of different crypto providers, coins, services, and providers is massive, and not all of these different services and platforms are going to ‘stand the test of time’ even if that time is in the grand scheme of things, is relatively small. Therefore users and crypto investors need to look towards telltale signs that crypto projects are making strives for long terms adoption and broader levels of technological innovation and integration. Indicators of a strong pattern from stability and planning are in and of themselves a use case for BNB and the Binance cryptocurrency exchange platform.
BNB has shown itself to be making strides towards being used in all manner of financial services and in the daily financial interaction of millions of people.
For example, TravelbyBit is an Australian company that facilitates the use of BNB for purchasing travel accommodation, flights, virtual gifts, and other associated holiday goods and services. Currently, TravelbyBit operates in over 150 businesses, even operating within Brisbane Airport. This level of integration of crypto makes BNB an attractive investment as well, an easy-to-use option for customers and businesses alike.
Beyond companies such as TravelbyBit, BNB is now being regularly used on other travel platforms like Trip.io and Travalo.com.
The Future of Binance
The future of the Binance crypto platform and its native Binance Coin token is complex to ascertain. Worldwide, cryptocurrencies and blockchain technology more broadly are going through some radical changes, some for good and some for bad. A mixture of new technologies, tightening financial regulators, and border levels of global economic uncertainty make any business’s future a complex matter.
For example, the shutting down of Binance operations in the country of Singapore, a financial hub of the Asian world is indeed a matter to consider carefully and may well be indicative of broader pushes for financial regulation. Regulation such as this, if adopted worldwide may make it more and more difficult for operations such as Binance Coin to function as intended.
There exists much uncertainty and Binance is not excluded from such uncertainties, but what is clear is that many different trading platforms and the native tokens such as Binance Coin are heading towards change, one way or the other.