Many investors discard BNB as simply “the Binance currency”, but that designation does not recognize its wider value unlocks. While BNB initially launched as the native tab of the Binance chain (now the BNB smart chain), and its first tokens burns were linked to the quarterly Binance gains, BNB is evolving a decentralized asset with multiple cases of use and reasons for economic value.
While BNB can enjoy a value of the expansion of Binance, its tokens supply model and the development of the BNB chain offer two independent sources of value. First, BNB serves as a value reserve through trimostral and fixed BNB burning mechanisms of BNB. Secondly, it promotes the functionality of the smart contract through the BNB smart chain, which has become a growing center for defi and game applications.
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Value deflation store
The BNB burning mechanism differentiates it from almost any other cryptocurrency. Let’s compare BNB with BTC, ETH and SOL:
- BTC: inflationary, but with a limited supply.
- ETH: inflationary or deflation, due to unpredictable burns rates linked to network activity.
- Sun: Inflationary, starting at 8% and decreasing over time.
The BNB burning process is unique; Eliminates the circulation tokens depending on the number of blocks produced and the average price each quarter, in addition to having a fixed relationship of the gas rates accumulated in each block. So far, almost 60 million BNB (~ $ 35 billion at current prices) have burned, reducing the circulating offer to 142 million. The last quarterly burn only cleaned $ 1 billion in BNB of existence: an annualized deflation rate of 4.6%!
Bitcoin currently receives the greatest attention as an asset value reserve due to its first advantage of moving, market capitalization and a robust and decentralized network of miners. The majority of the network should agree on any change in the bitcoin code (that is, change the destination supply), which would be extremely difficult with the level of decentralization of Bitcoin. Investors must take into account that the BNB Burn has already been modified from its original technical document, so there is no guarantee that it will not change anymore. This is compensation with an aggressive tokens burning strategy.
Source: Bnbburn.info
BNB chain: a modular L1 ecosystem
The next evolution of BNB is the BNB One Chain initiative, whose objective is to unify a multicin ecosystem created for web interoperability:
- BNB Smart Chain (BSC): A quick defi concentrator, low cost and compatible with EVM.
- BNB Greenfield: A decentralized storage network for real -time monetizable data.
- OPBNB: A Ultra Lower High Performance curly (Sub $ 0.0001 per transaction), created for high demand chain and DAPPs games.
With several winds against Ethereum (namely, the fragmentation of layer 2 and inflationary concerns), the BNB One Chain initiative provides a viable alternative to web3 developers and applications.
Now, not everything is rainbow and butterflies with BNB. Investors should still consider the risk that their impulse of decentralization is only a marketing trick, as well as the current regulatory battles on the Binance knowledge policy (KYC) and other problems.
With Richard Teng now at the head of the exchange, Binance and the next BNB chapter will probably focus on compliance and work with regulators/exchanges to increase access for the BNB token. With BNB mostly not available in US exchanges., Token has still achieved a market limit of ~ $ 100b with international support alone. As American cryptographic regulations are relieved, BNB re -entry in US markets could be a significant catalyst for greater growth.
Dissemination:
Osprey Funds manages the Osprey BNB Chain Trust (OBNB), a single asset trust that provides exposure to BNB and publicly quotes in the OTCQX market. Investors can obtain more information and read the fiduciary prospect in Ospreyfunds.io. Matt has no BNB or OBNB.
