Binance Coin

The Coins

Intermediate

By Matt Hussey

Learn

Jan 21, 2019

Crypto exchange Binance has its own coin. Want to know why traders use it? It’s cheaper and doesn’t produce dust.

What you will learn

What you will learn

What Binance Coin is used for, what advantages it has and what can be done with it.

What is it?

The main purpose of Binance Coin is to be used a medium of exchange on Binance, one of the most popular crypto exchanges. The coin’s ticker symbol is BNB. The main things to know are:

  • 💸 Discount - Users who hold a number of coins and spend them on trading fees receive discounts. In 2018, there is a 25% rebate on trading fees which will reduce to 12.5% in 2019 and stay at 6.25% from 2020 onwards.

  • 💱 Token - Binance Coin is an Ethereum-based ERC-20 token. It has a limit of 200 million tokens. Half of the coins were sold in an ICO in July 2017, while 10% went to angel investors and the founding team kept 40%.

  • ⛽ Gas - Binance Coin will also be used as the native coin for making gas payments on Binance’s upcoming decentralized exchange. A public beta of the exchange is expected by late 2018 or early 2019.

Did you know?

The price of Binance Coin rose 22,000% in the first six months after it was issued, surpassing Bitcoin and Ethereum.

How does it work?

When a trade is made on Binance, it charges a 0.5% trading fee. The fee can be paid out of the cryptocurrency being traded or users can choose to pay it with Binance Coin. When paid with Binance Coin, the discount is applied.

Also, it doesn’t create dust. Dust is created when the trading fees are taken from a trade involve a coin that is indivisible, like NEO. This means the trade is maximized.

Did you know?

In April, 2018, Binance announced a new feature that lets users collect up their dust and convert it to Binance Coin.

Can I take it off the exchange?

Yes. Binance Coin is a token that can be traded on the open market. It’s is not commonly accepted on other exchanges but it can be stored in any wallet that accepts ERC-20 tokens. This includes MyEtherWallet, MetaMask and Ethereum Wallet.

What is a Binance burn?

Every quarter, Binance chooses to burn some of its Binance Coin. This is done to reduce supply, in the hope that it will increase the price. Binance uses 20% of its profits to buy Binance Coin on the open market and burn them up to a maximum of 50% of its supply, in accordance with its whitepaper.

Did you know?

In April 2018, Binance announced it had completed the burn of 2,220,314 Binance Coin, worth $30 million.

Do other exchanges have tokens?

Most crypto exchanges have their own tokens which are commonly used to pay for trading fees.

The OKB foundation launched the OKB token in April 2018 which is used as the utility token on OKEx, one of the highest crypto exchanges by market cap. It will also be used for other platforms.

Huobi released its Huobi Token in February, 2018. It offers trading fee discounts up to 50%, has a limit of 500 million tokens and can be acquired by purchasing ‘Point Cards’ on Huobi Pro. Each quarter, Huobi Pro uses 20% of its profits to buy back Huobi Tokens that are on the open market.

The future

In Q1, 2018, Binance surpassed the profits of Deutsche Bank reeling in $200 million with 500 times fewer employees. Founder Changpeng Zhao, known as CZ, estimates that 2018 profits will be $1 billion. The fortunes of the company are backed by its trading volume which is consistently the highest in the market. Looks like Binance Coin has a rosy future ahead of it.

By Matt Hussey

Learn

Jan 21, 2019

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2019 © Decrypt Media, Inc. All Rights Reserved.

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