BNB All Time Highs as Binance Chain Launches

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Binance Coin (BNB) has jumped to a market cap of more than $3 billion, significantly above its all time high of $2.4 billion in January 2018.

Its price too is not far off from all-time high (ATH), currently trading at circa $22, just $2 off from the ATH of $24, with the token handling some $340 million in trading volumes.

The ERC20 token is soon to become a coin running on the Binance Chain which launches today with a mainnet swap on April 23rd.

The current supply and ownership of BNB will be maintained with it being a plain swap from token to coin according to their announcement.

The Binance Chain is a semi-permissioned and a semi-centralized blockchain using the Tendermint BFT consensus. They say:

“The initial validators are selected from trusted members of the Binance community, and will eventually expand to more members as the Binance blockchain and ecosystem matures, this responsibility will be distributed.

The decentralized governance procedure would be introduced and executed. More qualified organization/individual can become Validator.”

Light Simple Payment Verification (SPV) nodes can then tap into this network without being able to verify for themselves or to take part in the consensus.

Apparently simple tokens can run on Binance Chain similar to those running on top of Bitcoin Cash or Stellar. It doesn’t have smart contracts as far as we’re aware.

That might be one reason for this price jump of circa 10% today, but a more probably reason is the fact Binance has been buying $15.6 million worth of BNB in order to burn/destroy them.

That’s because BNB is kind of a stock that was used to fund the creation of Binance in 2017. For that funding, BNB holders get 20% of Binance’s quarterly profits as a sort of dividend.

Instead of such profits being distributed to each holder, Binance achieves the same effect by withdrawing supply from circulation.

As their profits were $71 million for the first quarter of 2019, they’re using 20% of it to reward BNB holders who financed the inception of the crypto exchange.

Thus the coin has jumped by more than 5x since December, from under $5 to now about $22 per token.

Copyrights Trustnodes.com

 

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