The rise of Binance Coin (BNB) - A utility token that actually provides utility.

Published on
May 23, 2019
At a time where most ICOs have failed to provide the utility needed to see increased demand, adoption and speculative value, Binance has challenged the status quo in delivering sustained dominance and growth while building significant utility into Binance Coin (BNB), a token that actually gets used.
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Binance Coin (BNB) - going against the grain.

Initial Coin Offerings have stirred a significant amount of discussion over the past 12 months, with the vast majority of projects failing to deliver on their ambitious promises to successfully to build or integrate a utility token into platforms that create an intrinsic value. A utility which in turn should drive demand within an ecosystem and ultimately see a an asset which increases in value over time to the benefit of early supporters and speculators.

One of the few Ethereum based tokens that seems to have stayed true to value proposition of ICOs following its generation in December of 2017, is Binance Coin (BNB).

The CEO of Binance.com, Changpeng Zhao (widely referred to as CZ), has managed to provide and sustain continuous iterations to the Binance platform which creatively deploys the usage of Binance Coin (BNB), in such a way that what has resulted in a rapidly increasing demand for the purchase and usage of the token, with a number of speculators looking to make investments into projects that could outlast the crypto-winter electing to place their bet on it's future.

Below, we discuss several ways Binance Coin has successfully challenged the norm and secured this demand, or you can watch the interview with James O'Donoghue from HiveEx.com speaking with Fred Schebesta, the Co-Founder of HiveEx.com and Australia’s largest financial comparison site finder.com.au.

Utility - Reduced Trade Fees

He-Yi, the co-founder of Binance.com, once described the Binance Coin (BNB) as the fuel to Binance's engine, due to offering millions of Binance users who trade cryptocurrency on the platform the ability to enjoy a reduced trading fee if they pay in the platforms native currency, Binance Coin (BNB).

These traders receive a 50% discount on trading fees simply by using the token, and while this discount does diminish over several years following it's launch, time has shown the successful impact that was created from this utility in bootstrapping the ecosystem and forming a benchmark for why the token is widely recognised as a rare instance of where an ICO was almost immediately able to deliver on building intrinsic value within a utility token.  

As a result, millions of traders have been able to reduce fees paid on the trades they would likely have wanted to take anyway, and demand for the coin saw steady growth.

Utility - The Binance Launchpad

In December of 2017, Binance launched the Binance Launchpad, an exclusive incubator for hand picked projects to raise funds through an initial coin offering to investors, with funds raised payable in one coin and one coin only, Binance Coin (BNB).

The launchpad has seen nothing but success, having now produced four different investment opportunities for supporters and speculators of projects ranging from secure Bitcoin wallet applications, to artificial intelligence and IOT platforms.

Two of it's most recent public offerings, BitTorrent (BTT) and Fetch.AI (FET), captured a significant return on investment for the handful of investors fast enough to get in, with the BitTorrent (BTT) token climbing 10x in price in the weeks following its listing on the Binance exchange.

Similarly, Fetch.AI secured an almost 5x return within just minutes from listing on the exchange, where the ability to trade the token was opened to everyone who missed out.

The Binance Launchpad offers a unique and fortune-weighted chance to secure but a small handful of public-sale tokens that are offered up as a means of raising capital.

Attract.AI, the most recent such project, saw 24,000 people pre-sign the User Agreement. Of those, 19,860 people successfully submitted a buy order, with hopes of securing the token before it became widely available. Of these, just 2,758 people were quick enough to actually see the order execute. The project raised the equivalent of $6 million USD in a mere 22 seconds, with an average investment of $2175 USD, paid only in Binance Coin of course.

To see the impact of the Binance Launchpad on the demand for Binance Coin (BNB), one only needs to look at at the price of Binance Coin against Bitcoin on the exchange.

Due to the requirement to own the token prior to a Launchpad project ICO, one must first acquire the Binance Coin (BNB). The trick is when to do this, as excitement within the market prior to the deadline of each sale has resulted in a significant price climb as far as several weeks out, and it seems to only be amplifying with each success.  

Which project will be next? It's not been announced yet, but the community is rife with speculation and excitement none the less.

Utility - Relentless expansion, the Binance Decentralised Exchange

Binance is a centralised exchange that maintains custody and control over all deposited assets on the platform. This structure has enabled the CZ and his team to successfully navigate changing market conditions and scale capability to facilitate thousands of trades per second. The irony of a platform which trades decentralised assets while itself not being decentralised has not been entirely lost on CZ, and despite there being several valid arguments where the majority of people actually prefer using a centralised exchange, CZ has now commenced an undertaking that seeks to satisfy those who want independent control over their funds and a guarantee of trustelss transactions. To have trades enforced by smart contracts, and trades which never expose their capital to the trust of third parties.

With all of the above in mind, it might not come as a surprise to learn that how Binance intends to secure and run a decentralised exchange - by building their own blockchain, "Binance Chain".
Further, it shouldn't be a great shock to learn that at current, though not certain, it looks like Binance Coin (BNB) is likely to play a pivotal role in this new blockchain and in how assets are trustlessly traded in future without third parties being involved.

Written by
James O'Donoghue
Operations and Growth

The eternal-bull crypto trader. James drives operations and growth at HiveEx

james@hiveex.com
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