Binance USD (BUSD): tokenomics, risks and score
A dollar stablecoin issued by Paxos for Binance, which was ordered to stop minting new tokens by the New York regulator in February 2023 and has been winding down since.
What Binance USD is, and what it does
This asset has failed. It is recorded here so that a search returns what actually happened rather than promotional material that is still online.
What the BUSD token itself does: It captures no protocol revenue. Any value rests on governance rights, on speculation, or on a change that has not happened yet.
Where it runs: Ethereum and BNB Chain. Mechanism: Centrally issued fiat backed stablecoin. It has been running since 2019, so roughly 7 years.
The facts
- TICKER
- BUSD
- SECTOR
- Failed and defunct
- CHAIN
- Ethereum and BNB Chain
- LAUNCHED
- 2019, so around 7 years of operating history
- MECHANISM
- Centrally issued fiat backed stablecoin
- MAXIMUM SUPPLY
- Issuance ceased in 2023
- VALUE CAPTURE
- None
- UPGRADE CONTROL
- Single key
- VESTING
- Complete
- LIQUIDITY BAND
- Micro cap. Thin, often a single venue or pool. Treat the quoted price as indicative only.
How the score breaks down
Each dimension is explained on the directory page, and the reasoning behind it is taught in the Academy research process.
Supply and value capture
Supply expands and contracts by design rather than following a fixed schedule. The token captures no protocol revenue. Any value rests on governance rights, speculation, or future changes that have not happened yet.
A single key controls the contract. Whoever holds it can change the rules or move funds. Ownership is heavily concentrated. A small number of wallets hold enough to determine the price on their own.
Where it is strong and where it is not
- Has operated for around 7 years and through at least one full bear market
- Audited, with published reports
- Vesting is complete, so there is no scheduled supply overhang
- Heavily concentrated ownership means a few wallets control the outcome
- The token captures no protocol revenue, so its value rests on sentiment
- Upgrade control sits with a small group, so the rules can change
- Thin liquidity. Check order book depth before assuming you can exit
Incident history
The New York Department of Financial Services ordered Paxos to cease issuing BUSD. The SEC issued a notice indicating it viewed the token as an unregistered security. Redemptions were honoured throughout.
Our read
The main risk
Issuance has ceased and the token is winding down. There is no reason to hold it.
Before you buy anything
Check the contract address against the project's own documentation rather than a search result or a screener link, since impersonation tokens with identical names and logos are listed constantly. Check the order book depth before assuming you can exit at the quoted price. And write down what would make you wrong before you buy, not after. The Academy thesis module covers why that single habit protects more capital than any indicator.