Binance BNB vs Coinbase COIN| Tokens vs IPO

Investing - May 7, 2021

Video Overview

Binance and Coinbase are the largest cryptocurrency exchanges in the world. One has the BNB token and the other the COIN stock. Why did one exchange decide to ICO and the other IPO? In this video, we break down the difference between Binance BNB and Coinbase COIN.

Stocks provide ownership. If you own a stock of a company like Apple, Gamestop, Tesla, or Coinbase, you are part-owner of the company. This allows you to take part in profits, through dividends, and management, through voting. 

Tokens are different. If you own a token of an exchange like Binance, FTX, or OKEx, you don’t partially own the company. These tokens provide liquidity. This can mean paying fees through the token or staking the tokens for rewards.

The similarity between Binance Token and Coinbase Stock

Where stocks and tokens are similar is performance. The price of stocks and tokens are dependent on the performance of the underlying exchange, whether it’s Coinbase or Binance. If Coinbase does well, COIN will go up in value. Similarly, if Binance does well, BNB will go up in value.

Take the case of BNB’s recent rally. Binance launched the Binance Smart Chain in September 2020, which is a public blockchain allowing DeFi connectivity. This gave developers globally the ability to build DeFi protocols and connect it with the Binance Chain and the exchange. This form of connectivity is driving the price of BNB. The performance of the exchange is directly related to BNB.

This is how COIN and BNB are similar and different. If you want to know more about the difference between DeFi protocols and how they can integrate into your financial plan, join the Interaxis Academy where we teach you about crypto in a safe way.

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