The following will explain why I am so optimistic about BNB and the underlying logic of holding BNB for a long time from the perspectives of how to understand BNB, BNB deflation model, annual welfare rate and Binance market value estimation. The following data are all collected from the Internet. If there are any errors, please point them out. $BNB
1. The significance of BNB to Binance
From the briefing by Zhao Changpeng (Zhao was still in China at the time) on the price performance of BNB after the ICO (issue price 0.5USD) and trading situation when Binance was first listed in 2017, it can be seen that Binance has an in-depth emphasis on user experience and user assets, and is determined to maintain the value of BNB. And continue to launch a series of activities, quarterly destruction, and airdrops to maintain the interests of HODLers. Before Binance has a plan to go public, we can boldly understand BNB as Binance's option token with a dividend nature. The exchange is an independently operated enterprise, so the value of the platform currency is easier to estimate than BTC and ETH. 🚀🚀🚀
At the same time, BNB Chain is vigorously developing the direction of AI+blockchain. I believe that more applications will be running on the BNB chain in the near future. From the current perspective, Binance Exchange's position as the leader is difficult to shake.
2. BNB’s Deflation Model
According to the Binance white paper, Binance takes out 20% of its net profit every quarter to destroy the platform token BNB. Since October 2017, in 7 years and 5 months, 30 quarterly buybacks and destructions have been completed, destroying a total of about 58.09 million BNB, a deflation of 31.41%, an average annual deflation of 4.19%. As the price of the currency rises, the deflation rate will decrease year by year, while Ethereum's annual deflation is less than 1%. 👍👍
As can be seen from the above figure, the number of BNB destroyed each year is basically linearly related to time.
Judging from the amount of destruction, it can be seen that the overall profit is growing steadily. In 24 years, a total of 4.371 billion US dollars were destroyed. Based on the 20% of net profit destroyed each quarter, it is calculated that Binance's net profit for the whole year of 24 is about 21.855 billion US dollars. At the same time, through the Binance annual report in 24, it can be known that the number of registered users exceeded 250 million, an increase of 47% over 2023, and an increase of 50 million users in 6 months, and the business has grown rapidly.
3. Annual welfare rate
As we all know, Binance has three types of BNB HODLer airdrop benefits, including Launchpool, HODLer, and Megadrop. From the historical airdrop situation, we can roughly calculate that 100 BNB, with the current coin price of US$595, is worth RMB 430,000 (I purchased nearly 500,000, and I was trapped 😂😂😂), and I can get about US$1,000 airdrop benefits every month (about RMB 7,280), and US$12,000 (about RMB 87,360) every year. My annualized rate of return can reach 17.47% (without considering the reinvestment). Basically, the airdrop benefits can be recovered in 5-6 years, and the benefits brought by the increase in coin prices are also excluded.
4. Binance Market Cap Estimation
Assuming we calculate Binance's overall market value based on the price-to-earnings ratio of traditional company Moutai (23 times), the conservative estimate of Binance's market value is 218.55*23=502.665 billion US dollars.
Assuming that buying BNB is regarded as a stock investment, Binance has both profit repurchases and dividends, and is also in a stage of rapid growth, which is definitely a good investment target.
On January 8, Bhutan GMC officially included $BNB, $BTC and $ETH in its reserves. If even the country dares to buy, what are you afraid of?
The current BNB exchange rate is 595 USD, ranking 5th in market value, with a market value of 85.858 billion USD, accounting for only 17% of the market value. If you dare to believe that the digital currency market can still prosper, and dare to boldly understand BNB as an equity token with different rights for the same shares, then the current price is still the best time to buy BNB (only express my own views, not as investment advice for others).
5. When will BNB be sold?
Currently I can only think of two possible scenarios for selling BNB:
1) Too much increase in short-term coin price. As we all know, digital currency is entering a four-year bull-bear cycle with the halving of BTC. When the short-term coin price increases too fast, people will consider reducing their positions, which will lead to more BNB purchases in the bear market.
2) Zhao Changpeng/He Yi sell Binance as a package. Zhao Changpeng sells all of Binance’s shares, similar to the situation in which Huobi was sold by Sun Ge a few years ago. Due to lack of trust, he will also sell all BNB. However, the possibility of this happening is very small.
The above are all analyses within the scope of my ability. If you disagree, please be gentle. #币安挖矿 #bnb
Author:CyptoBean