Many investors reject BNB as simply “Binance’s play”, but this designation does not recognize its wider value unlocking. While BNB was initially launched as a native token of the Binance chain (now the intelligent BNB chain), and its first token burns were linked to the quarterly Binance profits, BNB evolves towards a decentralized asset with multiple cases of use and reasons for economic value.
While BNB can benefit from a certain accumulation of value of the expansion of the binance, its token supply model and the development of the BNB chain offer two independent value sources. First, the BNB serves as a reserve of value through combustion mechanisms of quarterly BNB and fixed ratio. Second, it fuels the functionality of smart contracts via the BNB smart chain, which has become a growing center for DEFI and Game applications.
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Deflationary value store
BNB’s burn mechanism differentiates it from almost all other cryptocurrencies. BNB compar with BTC, ETH and floor:
- BTC: Inflationist, but with a capped supply.
- ETH: inflationary or deflationary, due to unpredictable burns related to network activity.
- Sol: inflationary, from 8% and decrease over time.
BNB’s burning process is unique; It eliminates traffic tokens according to the number of products produced and the average price each quarter, as well as a fixed ratio of gas costs accumulated in each block. Nearly 60 million BNB (~ 35 billion dollars at current prices) have been burned so far, reducing the supply in circulation to 142 million. The last quarterly burn alone has suffered $ 1 billion from BNB of existence – an annualized deflation rate of 4.6%!
Bitcoin currently pays the most attention as a reserve of value assets because of its first advantage of mover, its market capitalization and a network of robust and decentralized minors. Any change in the Bitcoin code (that is to say the modification of the target offer) should be agreed by the majority of the network, which would prove to be extremely difficult with the level of decentralization of Bitcoin. Investors should note that the BNB Burn has already been modified from its original white paper, there is therefore no guarantee that it will not yet be modified. This is compromise with an aggressive chip burning strategy.
Source: bnbburn.info
BNB channel – A modular L1 ecosystem
BNB’s next evolution is the BNB One Chain Initiative, which aims to unify a multi -hole ecosystem designed for web 3 interoperability:
- BNB SMART CHAIN (BSC): A DEFI DEFIM HUB with low cost and EVM compatible.
- BNB Greenfield: A decentralized storage network for monetizable data in real time.
- OPBNB: an ultra-faible high speed rollup ($ sub0,0001 per transaction), built for chain games and high demand DAPPs.
With several opposite winds against Ethereum (namely the fragmentation of layer 2 and inflationary concerns), the BNB One Chain initiative provides a viable alternative to developers and web applications.
Now, they are not all rainbows and butterflies with BNB. Investors should always consider the risk that their decentralization of decentralization is only a marketing stroke, as well as the ongoing regulatory battles on the knowledge policy of Binance (KYC) and other problems.
With Richard Teng, now at the head of the exchange, Binance and the next chapter of BNB will probably be focused on compliance and work with regulators / exchanges to increase access to the BNB token. With BNB for the most part unavailable on American exchanges, the token has still reached a market capitalization of ~ 100 billion dollars with international support alone. While the American cryptography regulations facilitate, BNB back to the American markets could be an important catalyst for more in -depth growth.
Disclosure:
The Osprey funds manage the Osprey BNB Chain Trust (OBNB), a unique active trust providing exposure to BNB and publicly quoted on the OTCQX market. Investors can find out more and read the Trust prospectus in oscreyfunds.io. Matt has no BNB or OBNB.
