According to the founder of the Binance exchange, Changpeng Zhao, the idea to launch a branded token, Binance Coin (BNB), was born on June 14, 2017, during a dinner in Chengdu, China. On June 18, a 17-page white paper was published detailing BNB and the plan for its launch through a three-week auction. Unlike competitor Coinbase, Binance did not accept fiat currencies, focusing solely on crypto assets. The platform promised a powerful engine capable of processing 1.4 million operations per second. By the time it launched in 2017, the cryptocurrency market was at its peak, with Bitcoin's price quadrupling to $2,800 and a surge in ICOs and the launch of hundreds of digital currencies. In the first six months of 2017, the cryptocurrency market grew fivefold, exceeding $100 billion.
The initial offering of 100 million BNB tokens in an auction on July 3 was successful, raising $15 million and averaging a token price of 15 cents. Part of the funds was used to develop the platform, and most of it was used for marketing and advertising of Binance. Ethereum-based BNB tokens were traded as securities, without giving holders a stake in the business.
The Shanghai project developed rapidly, but analysis showed that far fewer tokens were sold at the ICO than stated. Only about 10.78 million BNB were transferred to investors, while business angels probably received double that amount. As a result, Binance likely earned less than $5 million, rather than the $15 million Zhao claimed.
Despite multiple requests from Forbes USA, Binance has refused to provide details about the 2017 initial token offering.
Read the full article “How Binance took off due to the unsuccessful launch of a branded token” on forbes.ru
