BNB Describes Itself As

BNB is the native cryptocurrency of the Binance ecosystem, launched in July 2017 by Binance, the world's largest cryptocurrency exchange by daily trading volume. BNB initially functioned as an ERC-20 token on the Ethereum blockchain but later transitioned to the Binance Chain and Binance Smart Chain (BSC), which were rebranded collectively as the BNB Chain in February 2022. BNB serves multiple functions within the Binance ecosystem, including transaction fee payments, participation in token sales, staking, and governance.

Project Function

BNB was initially introduced as a utility token to provide users with discounted trading fees on the Binance exchange. Over time, its utility has expanded significantly across the broader Binance ecosystem. BNB is now used for various purposes, including paying transaction fees on the BNB Chain, staking to support network security, participating in on-chain governance, and engaging in token sales on Binance Launchpad.

BNB Smart Chain (BSC), launched on September 1, 2020, and later rebranded as part of the BNB Chain in February 2022, is a high-performance blockchain network designed to enhance the functionality of the original Binance Chain. BNB Chain facilitates the development and interaction of decentralized applications (DApps), decentralized finance (DeFi) platforms, and other blockchain-based innovations. With full compatibility with the Ethereum Virtual Machine (EVM), BNB Chain allows developers to port their Ethereum-based DApps to the BNB Chain with minimal modifications, leveraging popular Ethereum tools like MetaMask and Truffle.

BNB Chain's key advantages include low transaction fees and fast block times. As of early 2024, the average transaction fee on the BNB Chain is approximately $0.10, significantly lower than Ethereum's average fees, especially during periods of high network congestion. The network's block time of around 3 seconds ensures rapid transaction confirmations and an overall smoother user experience.

Since its inception, BNB Chain has seen rapid growth, supporting over 1,500 DApps by May 2024. Popular platforms such as PancakeSwap, Venus, and BakerySwap have contributed to the ecosystem's expansion. The total value locked (TVL) in BNB Chain-based DeFi protocols exceeds $20 billion, reflecting substantial market adoption and user trust.

Token Utility

BNB operates under a deflationary model, with mechanisms such as the BNB Auto-Burn program reducing the total supply over time. Binance aims to burn 100 million BNB tokens, representing 50% of the total supply, through quarterly burns. This burn process, now determined by an Auto-Burn formula, considers the total number of blocks produced on the BNB Chain and BNB’s average price.

BNB's utility extends across the BNB Chain ecosystem, where it is used for transaction fees, staking, and governance. BNB holders can stake their tokens to become validators or delegate them to existing validators, earning staking rewards that range from 5% to 15% annually as of May 2024, depending on the amount staked and the validator's performance. Additionally, BNB holders participate in on-chain governance, voting on proposals that shape the network's future development and upgrades.

About the Founders

BNB was co-founded by Changpeng Zhao (CZ) and He Yi. Changpeng Zhao, the CEO of Binance, has an extensive background in technology and finance, having previously worked at Bloomberg and Fusion Systems before entering the blockchain space in 2013. He launched Binance in 2017, which quickly became the largest cryptocurrency exchange globally.

He Yi, the co-founder and Chief Marketing Officer (CMO) of Binance, began her career in media before moving into the cryptocurrency industry. She co-founded OKCoin, a leading fiat-to-crypto exchange in China, before partnering with Zhao to establish Binance. Her expertise in marketing has been crucial to Binance's rapid growth and global recognition.

Risks of BNB

Like an investment in other crypto assets, there are some general risks to investing in ELF. These include:  (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to the Risks Specific to Holding Digital Assets statement.

In addition to these general risks, an investment in BNB is subject to the following specific risks:

• The Layer-1 space is intensely competitive. Several new blockchains continue to emerge which boast high-profile teams, claim unparalleled transaction speed, energy-efficiency, as well as developer-friendly programming languages. Any potential success associated with BNB is reliant on the extent to which the BNB Chain is adopted by enterprises and developers.
• BNB is under scrutiny from prominent regulators such as the SEC. 

We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with BNB. Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.

The BNB community and BNB Chain founding team are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of BNB have no recourse to the BNB community, BNB Chain founding team, or Uphold if BNB declines in value for any reason.

Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.

Uphold’s Evaluation Process

Prior to listing BNB on the Uphold Platform, Uphold performed due diligence on BNB and determined that BNB is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following: 

• The creation, governance, usage, and design of BNB, including ensuring the source code is open-source, audited and peer reviewed, security, and roadmap for growth in the developer community. 
• The supply, demand, maturity, utility, and liquidity of BNB.
• Any marketing materials put forward by the BNB social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
• Material technical risks associated with BNB, including any code defects, security breaches and other threats concerning BNB and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
• Legal and regulatory risks associated with BNB, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of BNB.