Binance Coin - a promising digital currency or just a hoax?
Exchange tokens are quite interesting tools, although not all of them are as popular as BNB.
What makes BNB unique? Firstly, in the issuer itself. Binance in the cryptocurrency community is called the "exchange for the people." It is really quite comfortable, and CZ (founder and gene deer) always listens to its users. According to various studies, 71% of the total trading volume in the cryptocurrency market falls on Binance. But interestingly, the exchange is relatively young. It was created in 2017, but by December it reached the top in terms of trading volume.
The BNB token is directly related to the popularity of the exchange, respectively, and its growth too. At the moment, there are several mechanisms through which the coin grows.
The exchange buys out BNB tokens for a certain percentage of income and burns them. This was spelled out in the white paper of the project. Information about the tokens that have been burned is publicly available, as well as information about the exchange's profitability. Everything is pretty transparent and clear. For example, during the sixth burning, 623,818 BNBs were destroyed. Information is here.
Token holders can pay commissions for the opportunity to trade in BNB tokens, receiving a discount. Initially, it was 50%, then it became 25%. Further, it will also decline to 12.5%, 6.75% and 0.
This is perhaps the main catalyst for growth. To take part in the campaign you need to walk BNB coins. For 50 tokens, 1 ticket is given, for 500 BNB 5 tickets. You need to walk at a certain time. Previously, it was 3 weeks before IEO, now it has been reduced to 1 week. By the way, this can be speculated. Immediately after a snapshot, the price drops sharply, because there is no longer any need to walk.
As we can see, all three components depend on the popularity of the exchange. Burning, commissions and IEO. The more users trade for the binance, the more they buy BNB, the stronger the rate is growing.
A friend of mine used the fundamental analysis tools that are used in the stock market to analyze the BNB token. He relied on the profitability of the exchange and the issue of tokens. As a result, he concluded that the fair price of BNB is in the region of $ 24-27. As we see, the market is all exactly at fair values.
The exchange does not stand still and is constantly evolving. Already on the 11th, the Binance 2.0 platform will be fully updated, which supports margin trading, and will also present new tools within 2 weeks - cryptocurrency futures with leverage x20. First it will be bitcoin, then the tools will expand.
What is all this talking about? The fact that the token is likely to continue to grow, because the popularity of the platform is growing. Binance create a bunch of products. For example, the Trust Wallet crypto-wallet, which I personally actively use, since it is as convenient as possible, is a decentralized trading platform that also uses BNB. They even created their blockchain and want to lure projects from Ethereum to it. Moreover, they create quite interesting tools on the blockchain. There is no name for them yet (or I can’t remember), but the point is that tokens are created that are tied to other coins. For example, there is bitcoin that can be transmitted only in the Bitcoin blockchain, and they created a token tied to Bitcoin itself, but which is located in the Binance blockchain. It has an identical course and the number of zeros after the decimal point. The user at any time can exchange bitcoin for this token or vice versa. Why is this needed? Binance blockchain has huge bandwidth. In theory, you can drive derivatives linked to Bitcoin in the blockchain of the binance.
All that is great, but personally I see a centralization in this trend. Binance already has a huge impact on the industry and if it is suddenly hacked, then the cryptocurrency ecosystem will be damaged tremendously. By the way, they recently broke it, but brought out only 8,000 BTC, which were compensated from the stock exchange’s own fund.