Cryptocurrencies

The history of Binance Coin (BNB)

If Binance is an exchange now very well known in the world of crypto assets, it is interesting to discover how the platform has managed to establish itself over the years within the community in order to become one of the most reputable and most appreciated


The arrival on the market

The history of binance coin dates back to the year 2017, when the company has decided to use a ICO to raise funds to finance its development. This took place from June 26 at July 3 with the sale of 100 million tokens, is 50% of the total supply. The price was 1 ETH for 2,700 BNB or 1 BTC for 20,000 BNB, is around 11 cents of dollars at the time.

When it was released, the token was of type ERC-20, that is, it operated thanks to the blockchain of the Ethereum network. However, the exchange’s plan was to eventually create their own blockchain, the Binance Chain.

The growing popularity of the exchange

The platform Binance came out at a really opportune time, that is, during the cryptocurrency boom of summer 2017 which will continue until the end of that same year. At that time, the demand from users to procure digital assets was huge and all the exchange sites were taken by storm.

This allowed Binance to be able to carve a slice of the pie, which might not have been the case if market conditions would have remained the same, because the users would probably have continued to carry out their trading operations on their usual platforms rather than trying the experiment on a new exchange.

However, investors quickly noticed that Binance was a very ergonomic platform, visually pleasing, easy to learn and which had very low trading costs, namely 0.1% per transaction. In addition, possession of the tokens BNB allows further reduce these transaction fees, which placed the company in a strong position compared to its competitors.

The advantage of BNB to reduce its transaction costs divided by 2 each year

binance coin bnb

BNB had a major advantage, that of power reduce transaction fees when using them on Binance. This is probably what allowed the token to quickly become popular and gain so much value.

Indeed, the token arrived on the market on July 25, 2017 towards the 11 cents, to trade above a dollar from August 14 to exceed the 10 dollars on December 27, 2017. The unit value of a BNB was therefore multiplied by 100 at the same time 5 months. Two weeks later, there is a peak at almost 25 dollars the January 12, 2018.

The token price then stabilizes for many months to peak at almost 40 $ the June 28, 2019, to finally exceed the $ 50 the February 2, 2021 and the $ 100 the February 9.

Initially, the reduction in transaction costs provided by the Binance Coin was planned as follows:

· 50% the first year;

· 25% the second year;

· 12.5% the third year;

· 6.25% the fourth year;

Nevertheless, Binance decided to return on this decision and announced that the fee reduction would be 25% for a time indeterminate, which allowed the token to keep a utility very strong.

The exit of Binance DEX

After developing its own blockchain, the Binance Chain, the company decided to launch its own decentralized exchange (Decentralized Exchange DEX) on April 23, 2019, simply called Binance DEX.

If most of the others DEX use blockchain Ethereum and require Ethers to perform operations, it is necessary this time to use the Binance Coin to be able to transact on decentralized exchange, which once again reinforces the utility of the token.

Unfortunately, until the beginning of the year 2021, Binance DEX was not used too much by the crypto community, because some users do not appreciate the too centralized nature of this exchange. However, due to the explosion in transaction fees of the Ethereum network in January 2021, Binance’s decentralized exchange is starting to gain some popularity and this has been reflected in the price of the token BNB which exploded during the month of February 2021.

BNB token burns

Every 3 months, Binance has committed to use 25% of its profits to buy back BNB tokens at market price and burn them, i.e. destroy them in order to reduce the total supply. available. As a result, this increases the rarity of a Binance Coin and therefore allows its price to appreciate.

Here is a summary of the different burn operations that have already taken place on the platform:

# Burn Dated BNB burnt % circulate supply Value ($) BNB Award
1 Q3 2017 986,000 0.49% 1.5M $ 1.50
2 Q4 2017 1,821,586 0.91% 40.M $ 21.96
3 Q1 2018 2,220,314 1.11% 30M $ 13.52
4 Q2 2018 2,528,767 1.26% 33.2M $ 12.93
5 Q3 2018 1,643,986 0.82% 16.2M $ 10.34
6 Q4 2018 1,623,818 0.81% 10M $ 5.83
7 Q1 2019 829,888 0.41% 15.6M $ 18.79
8 Q2 2019 808,888 0.43% 23.838M $ 29.47
9 Q3 2019 2,061,888 1.10% 36.7M $ 17.79
10 Q4 2019 2,216,888 1.11% 38M $ 17.50
11 Q1 2020 3,373,988 1.69% 52.466M $ 15.55
12 Q2 2020 3,477,388 1.74% 60.5M $ 17.40
13 Q3 2020 2,253,888 1.13% 68M $ 30.20
14 Q4 2020 3,619,888 1.81% 165.791M $ 45.80

The platform commits to burn tokens until the moment where the total supply will reach 100 million tokens, or half of the initial maximum supply. Currently (February 2021), just under 30% of the tokens were burned by the platform, which still leaves room for many burns in the future.

Conclusion

Binance’s history is quite rich and it is undoubtedly the new exchange that has succeeded in establishing itself the fastest among users thanks to the utilities offered by its BNB token and by the good governance of the company.

In view of the development of the cryptocurrency industry and the ever increasing popularity of Binance, we can be sure that the history of the platform will continue to grow richer and that the management team will continue to innovate in order to constantly offer new features for crypto-traders.

If you would like to learn more about BNB, we have created several different guides on Binance Coin (insert link). Do not hesitate to consult our dedicated page in order to obtain precise information on certain points in particular of the project.

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