advantage & disadvantage of Binance

Advantages of BNB

The biggest advantage of BNB used to mainly be only for those for anyone who were trading on Binance. This is because when you hold BNB on Binance you get up to 25% discount on trading fees. The more BNB you hold the higher the discount becomes though you also need a certain amount of trading volume combined with your BNB balance in order to get higher discounts on trading fees.

The introduction of the Binance Smart Chain (BSC) has given BNB far more advantages than it had upon its inception. Much like Ethereum is necessary to perform transactions on the Ethereum network because it is used to pay for transaction fees, Binance Coin is necessary to perform transactions on the BSC. Whether you are claiming rewards from your Decentralized Finance platform of choice, making a swap of one digital asset for another, or interacting with a smart contract in any other way on the BSC you will need BNB to pay the transaction fee. The bonus is that the fees on the Binance Smart Chain are much cheaper and faster than on Ethereum at this time, which is likely why transaction numbers are now higher on the BSC than on Ethereum.

Another advantage of BNB is it is a deflationary asset. Each quarter Binance takes a portion of the fees received by the exchange over each quarter year period and then burns it, meaning it is taken out of circulation and can never be used again. This is a deflationary action that means over time the amount of BNB in circulation will only ever go down, as it is not mined and started with a max supply of 200 million BNB.

Disadvantages of BNB

The main disadvantage of the coin is the centralized aspect of its control and governance. The direction of the blockchain, and the ecosystem has heavy guidance from Binance.

This is only a disadvantage for someone who prefers maximum amounts of decentralization. Binance has gotten into problems with various governments since its rise in 2017. This has made several users, and investors nervous about their investment in Binance. If there was to be government intervention, where the Binance Exchange were shut down, then Binance Coin would surely suffer.