There has been a lot of confusion regarding the Binance Coin. Every exchange issuing its own currency will have a lot criticism to deal with, for obvious reasons. Things got out of hand so much the company CEO explained a few things on Reddit. The team itself has never sold a single BNB coin since they were issued through a smart contract asset. He didn’t comment on the price,though, but there’s no reason for the company to manipulate it either.
When a cryptocurrency exchange has its own native coin, users get concerned. After all, there has been a fair of manipulation in this department through other platforms. MCXNow was perhaps one of the most notorious examples of such tactics. Binance, an up-and-coming Chinese exchange, has its own native currency as well. These tokens were created by an Ethereum smart contract some time ago. A total of 80m BNB coins is kept in reserve, all of which belong to the team. The remaining supply is freely traded on the exchange as we speak.
BNB Coin is Seemingly Perfectly Legitimate
As one would expect, some users still think there is manipulation going on. First of all, they claimed the Binance team has sold off BNB coins to suppress the price. Given the evidence provided by the CEO, that is impossible. All coins belonging to the team are still in the contract right now. It is certainly possible other traders manipulate the BNB price, though. That is the nature of cryptocurrency, unfortunately. Those with more money can easily control markets and take profits through different price manipulation tactics. The company itself isn’t involved in these practices, which is a good sign.
One also has to keep in mind a total of 200 million coins were created initially. That means there are 120m BNB coin tokens waiting to be traded. With people taking profits on a regular basis, it may appear a sif the price is suppressed Whales often try to lower prices and shake out some people who have no faith in future value appreciation. It is a common tactic occurring in all markets right now. Binance Coin is no exception, unfortunately. However, there is a twist to this story.
The Binance team actively buys back some coins off the market every quarter. Every three months, 20% of company profits will be used to buy back BNB at market value. If the value is high, the amount of coins to be bought back is much lower. There is no reason for them to suppress this price, nor do they have the necessary means to do so. It appears BNB is the one of the only legitimate exchange-issued currencies to date.It will be interesting to see how this currency performs in the years to come, though.
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JP is a freelance copywriter and SEO writer who is passionate about various topics. The majority of his work focuses on Bitcoin, blockchain, and financial technology. He is contributing to major news sites all over the world, including NewsBTC, The Merkle, Samsung Insights, and TransferGo.