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0/ There has been a lot of controversy and confusion around $BNB (Binance Coin) recently. This isn't unwarranted considering it doesn't look like traditional tokens/financial instruments. In this thread, I will attempt to elucidate 👇
1/ The main source of confusion stems from the fact that when encountering something new, humans like to find analogs. For BNB, it's commonly a dividend stock. Unfortunately, any analog from the non-crypto world would be a poor point of comparison. @nic__carter summarizes: 
2) People equate $BNB to a dividend stock because cash flows play a market role for both assets: a portion of Binance's profits are used to burn a proportional amount of $BNB every quarter. This also sounds similar to a stock buyback where stock supply is similarly reduced.
3) This has resulted in a variety of burn/DCF models being created to come up with a FMV for $BNB. This is wrong for a few reasons, but the most apparent reason is that @binance has stated in their whitepaper that they will burn a maximum of 100M BNB.
4) After burning is complete, there is no direct tie between @binance profits and BNB. The second reason is more nuanced. By burning supply, Binance does not necessarily create additional value for the token, they merely concentrate existing value to the non-burned tokens.
5) There is a common misunderstanding that the value of the token is a foundation for the value of the token. In actuality, the aggregate fundamental value of the token is completely detached from the value of the burns.
6) An example: If 5% of the circulating world supply of gold disappeared, each ounce of gold would be worth ~5% more, but the total market cap of gold would not change. Gold has value regardless of whether there is recurrent destruction.
7) The same holds true for something like dollar bills, a more apt comparison. If 5% of all dollar bills are burned, then a dollar is still worth a dollar, as a BNB is still worth a BNB. But because there is less circulating supply, the individual purchasing power increases.
8) Another misconception is that Binance is currently performing open market buybacks to finance the burns. While they maybe buying BNB during market making efforts, it's unlikely they're currently buying significant sums for the burns.
9) Why? Let's do some math: $1.2B avg daily trading volume in 2018. The average trade fee (maker+taker) per $ is 0.1% after BNB/volume discounts. Assuming the vast majority of these fees were paid in BNB, Binance was paid ballpark ~$440M in BNB. More than enough for the burns.
10) This is not to say that they will not potentially need to buyback in the future for burns, but again, the act of buying back does not necessarily confer value to the tokens as a specific price is not promised, but it is rather determined by the market
11) So where will BNB's value come from? Its value as a medium of exchange. Or rather, its EXPECTED future value as a medium of exchange. The vast majority of BNB implementations are that of being able to use BNB as payment (there are some exceptions like voting/referral bonus).
12) Even BNB's most prominent utility - discounts for trading fees - is BNB being used as a medium of exchange. A common analogy is that it is a coupon, but in actuality, BNB is accepted as the selected currency for a service. Think of it like paying with cash at a gas station.
13) A new upcoming use case for BNB is as gas for @Binance_DEX , but this is also a use of BNB in a MOE fashion - payments for trading services. Other relevant examples include Merchant payments (POS), salary payments, live stream tipping, payment for VPN services, etc.
14) To create a model that would holistically model the value of BNB based on all its features would be an exercise in futility. But the best approximation would involve tying its demand as a MOE, to its dynamic supply. In other words, value it as money.
15) From a regulatory aspect, people tend to label BNB as *a security*. cc:@TheBlock__ . There are valid arguments as to why it might be, but also as to why it might NOT be. What seems strange is that people seem to apply a more stringent framework to define BNBs security status
16) According to the Howie Test, $BNB is liable to securities laws at the same level most other tokens are e.g. $MKR. $MKR's current value is tied closely to the efforts of @MakerDAO. Maybe it will eventually be fully decentralized, but it is not presently. Same with $BNB.
17) BNB's value accrual mechanism and regulatory dynamics aren't easy to understand, even to the fund managers in the space. This is not a shill for BNB (disclosure - I do own BNB), but I hope I've cleared up some confusion. Feel free to challenge me on any of these points.
