Binance Coin (BNB) is the native token on the Binance exchange. Short for ‘Binary Finance,’ Binance’s name refers to crypto-only exchanges’ continually increasing importance. In particular, Binance aims to improve on existing centralized exchange infrastructure through a broader range of services, stronger liquidity, security, an international focus, and an agile approach to regulatory compliance. Known for its high trading volumes and liquidity as well as a broad range of listing pairs,, the platform has added margin, futures, options, OTC trading, lending, staking and decentralized (on-chain) trading services. Binance’s DEX operates on top of the Binance Chain, a blockchain that the exchange launched, primarily using software from Cosmos Network, including Tendermint Core. While the details of Binance’s security system have been kept secret, the platform follows industry best practices, including ISO/IEC 27001:2013 and the CryptoCurrency Security Standard (CCSS). Despite these measures, however, Binance did suffer a $40M hack in May 2019. In addition, the trading system supports an order-making peak load of 1.4 million transactions per second. While Binance was launched without significant KYC/AML procedures, it formed a partnership in early 2019 with provider IdentityMind to boost compliance and data security. Other partnerships with Chainalysis and Refinitiv similarly aim to maintain compliance.
In order to drive value to the token, Binance conducts a quarterly buyback of BNB, utilizing 20% of exchange profits. These tokens are subsequently burned, and auditable records of this process are recorded on-chain. Binance aims to buy back 50% (100 million) of the total token supply over time, in order to create a form of price support among early adopters and align incentivizes of token holders and platform users. Binance has also decided to start burning its own BNB holdings in order to reach this target. BNB redeemed for trading fee discounts is included in this buyback figure. BNB is also a primary trading pair on the exchange, offering considerable inter-market liquidity. So far, this program has resulted in 16,742,023 BNB burnt across 10 quarters.
The corporate entity was founded in Hong Kong in 2017 by Changpeng Zhao, the former CTO of OKCoin, and relocated to Malta in 2018, although the current location of its operations is unspecified. Due to US regulation, Binance decided to stop offering services to US customers, opting to launch a new and separate platform, Binance.US for the US market. Binance has expanded into other countries, opening new platforms with fiat-crypto on-ramps for the European, Singaporean, Australian and Ugandan markets. Binance Labs is the incubation arm of Binance, making early investments in the Terra stablecoin and privacy application incubator Oasis Labs. The BNB token was distributed through a mid-2017 token sale, which raised $15 million in a public sale for 50% of the total supply.