Binance Coin (BNB) is a cryptocurrency that was created by the Binance exchange in 2017. Binance is one of the largest cryptocurrency exchanges in the world, and BNB was created as an integral part of the Binance ecosystem.
BNB is an ERC-20 token that was originally created on the Ethereum blockchain, but it has since migrated to the Binance Smart Chain. BNB can be used to pay for trading fees on the Binance exchange, and it can also be used for purchasing goods and services from merchants that accept BNB.
In addition to its utility on the Binance platform, BNB has also become a popular investment asset. Its value has grown significantly over the years, reaching an all-time high of over $690 in May 2021. BNB’s value can be affected by a range of factors, including changes in the cryptocurrency market, regulatory developments, and changes in the demand for Binance’s services.
What is Binance Coin (BNB)?
If you’re an avid crypto trader, you’re probably familiar with Binance Coin (BNB). It’s the native digital asset of the Binance ecosystem, comprising the Binance crypto exchange and the Binance Smart Chain (BSC). Binance Coin started out as a utility token, but it has since evolved into a versatile cryptocurrency with numerous use cases.
Origins of Binance Coin
Binance Coin was initially launched as an ERC-20 token on the Ethereum blockchain, as a means of paying trading fees on the Binance exchange. However, in 2019, Binance launched its own blockchain network, the Binance Smart Chain (BSC), and Binance Coin migrated from Ethereum to BSC.
Uses of Binance Coin
One of the primary use cases for Binance Coin is to pay discounted trading fees on the Binance exchange. Users who pay trading fees using BNB get a 25% discount on spot and margin trading fees. Additionally, Binance Coin can be used to pay transaction fees on the Binance Smart Chain.
Beyond its utility on the Binance ecosystem, Binance Coin can also be used as a payment method for goods and services online. As more merchants and businesses adopt Binance Coin, its value as a payment method is likely to increase.
Binance Coin’s Market Position
As of April 2022, Binance Coin is the fourth largest cryptocurrency by market cap, following Bitcoin (BTC), Ethereum (ETH), and Tether (USDT). Its value and utility have increased with the Binance ecosystem’s rising adoption, particularly in the decentralized finance (DeFi) space.
Benefits for Binance Users
Binance Coin offers several benefits for users of the Binance exchange. In addition to discounted trading fees, Binance Coin holders can also enjoy a 10% discount on futures trading fees. These discounts can add up to significant savings for frequent traders on the platform.
In conclusion, Binance Coin is a versatile cryptocurrency with numerous use cases beyond its origins as a utility token. As the Binance ecosystem continues to grow and expand, Binance Coin is likely to become an increasingly valuable asset for traders, investors, and businesses alike.
How Does BNB Work?
BNB, the native cryptocurrency of the Binance ecosystem, operates in a unique way across different platforms, including the Binance exchange, the Binance Chain, and the Binance Smart Chain.
The Binance Smart Chain is a blockchain network that supports smart contracts and decentralized applications, while the Binance Chain provides an optimal experience for on-chain trading and operating the Binance DEX. However, the Binance Chain has limited functionality compared to the Binance Smart Chain.
Users can pay transaction fees on both the Binance Chain and the Binance Smart Chain using BNB tokens. Additionally, BNB holders can enjoy discounted trading fees on the Binance exchange, along with other benefits.
In the DeFi ecosystem, BNB has several use cases. Users can invest in stocks and ETFs using BNB, and it can also be pledged as collateral for loans on DeFi applications.
Overall, BNB serves as a versatile cryptocurrency with several use cases, making it an essential component of the Binance ecosystem.
History of Binance Coin
Binance Coin was first launched in July 2017 through an initial coin offering (ICO). During this event, Binance offered 100 million BNB tokens for public sale, raising $15 million in capital through BTC and ETH.
At the time, Binance had designed BNB as an ERC-20 token on the Ethereum network. The initial total supply of BNB was set at 200 million, with 40% allocated to the Binance founding team, 20 million BNB or 10% set aside for angel investors, and the remaining 50%, or 100 million BNB, offered for public sale during the ICO.
In 2019, Binance launched its own blockchain network, the Binance Chain (BC), and BNB was migrated to become its native token. Users were then able to perform a token swap to exchange their ERC-20 BNB tokens for BC-based BNB coins.