Binance Coin price grows with extra voting power
A new function for BNB has the coin performing even better.
Even as markets slump across the board, Binance Coin (BNB) has continued doing quite well.
A large part of this is simply the nature of the coin. The Binance exchange is thriving and the BNB coin serves a genuine function there, making it closer to "investing in picks and shovels in a gold rush" than buying most other cryptocurrencies is. Plus, a roadmap of ongoing coin buybacks and burns is helping prop up its value over time.
However, the latest price rise might be most closely tied to changes in the Binance community coin of the month voting system.
This is when coin communities vote for a new coin to be listed, free of charge, on the Binance exchange. A listing on any prominent exchange will typically result in a price bounce, so getting one's coin on Binance can be an important part of a token's future success as well as money in the pocket in the short term.
This also means fierce competition for a space on the exchange, with votes being facilitated and counted through Binance coin. The fee for voting is 0.1 BNB per coin voted for.
The benefits of a listing, and a low voting fee, have meant it's common practice for coin communities to seed BNB among their users ahead of a vote to simply buy votes outright and for groups to spread their BNB holdings out among multiple wallets and accounts to multiply their voting power.
These elements might be why Binance has just introduced a new vote weighting system where the power of a vote of multiplied by the amount of BNB held, up to a maximum of x500.
It's naturally not perfect in that it unfairly gives wealthier people much more voting power. At the same time, it might be the lesser of two evils and a way of returning more honesty to the voting process and reducing the extent to which the system is played during each vote.
If nothing else, it's doing wonders for the Binance coin price. It has been consistently outperforming bitcoin and most other altcoins so far this year, and the update to voting processes seems to have injected a lot more BNB demand into the marketplace.
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VET, XLM, BTC and NANO.
Latest cryptocurrency news
- Ethereum price dips below $1,500 in midst of marketwide correction
- Bitcoin price drops as Fed Chair attempts to squash inflation concerns
- Ethereum price dips by 25% over the past week. What happens next?
- Ethereum price crumbles as dApps flee for cheaper platforms
- Bitcoin volatility at 6-month high as price direction looks uncertain Â
Picture: Shutterstock
