Binance Coin Price Prediction: Is BNB a Good Investment in 2022?

Binance Coin is a native token of the Binance exchange. It is used to pay fees on the exchange and trade in over 50 cryptocurrency pairs. The entire ecosystem is designed in a way to support a variety of utilities like trading fees, exchanges, fees, listings, etc. By May 2020 the token became the fourth largest one by market capitalization. 

The coin was released in June 2017 during the Initial Coin Offering, which had the goal of attracting investors to the upcoming Binance Exchange launch. Initially, the BNB token was released under the ERC-20 standard and was not available for mining, but on April 18 2019 the mainnet of the Binance Smart Chain was launched and all the tokens were moved there in 5 days. 

The ICO had terms according to which the 50% of the tokens were distributed among the investors, the team got 40%, and the venture investors received 10%. ICO helped to raise $15 million with investments coming mainly from contributors from China. 50% of the money went to advertising and brand promotion, 35% was allocated for platform development, modernization and security, and the remaining 15% was left for the reserve fund. 

The project team considered that the BNB token will be the object of inflation while creating the White Paper. To regulate it, every three months the company puts 20% of its income aside for the subsequent redemption of coins and their burning. According to the plan, only half of the initially issued volume will remain.

The Binance Smart Chain utilizes a Proof-of-Stake Consensus mechanism. In one day there can be only 21 stakers. The system is more centralized than Ethereum, though it’s faster and cheaper. 

Binance also launched its own start-up Binance Launchpad, which publishes numerous projects looking for investors. The exchange leads the initial sale of tokens by those projects. Anyone who has BNB tokens can take a part in the IEO, thus provoking the demand for the Binance coin. 

As a cryptocurrency, BNB is used to be a trading asset and also to be used to reduce fees. Users can pay the trading fee, exchange fee, listing fee, etc. For paying fees with BNB the users get discounts, the size of which depends on the time spent using BNB for the transaction fees. For example, first-year users of the Binance exchange can benefit from 50% off the fees. 

The total supply of the BNB token is 200 million, and more tokens can not be minted. The tokens are burnt all the time, or precisely, a certain part of the transaction is burnt whenever a new block is validated. But most of the burning is done on a quarterly basis. There is a formula based on BNB price and the total number of blocks so far validated in the chain. For example, in the first quarterly burn of 2022 over 1.8 billion BNB tokens were burned.