What is Binance Coin?
BNB is the native coin of the Binance Chain and enables the ecosystem created by the exchange of the same name to function. Resorting to a metaphor, if we wanted to see Binance and its apparatus as a machine, BNB would be its fuel.
Let’s quickly walk through the history of Binance Coin so that we can understand the evolution of use cases for this cryptocurrency.
B N B was born in 2017 as an ERC-20 token, that is, native to the Ethereum blockchain. The purpose was to reduce trading fees on the Binance Exchange: those who held BNB would be entitled to discounts.
Originally, the total supply of Binance Coin was 200 million, of which 100 were distributed through ICOs.
Only later, with the launch of the Binance chain in 2018, did the asset begin trading at a 1:1 ratio on the BEP-2 network (precisely the Binance Chain) becoming the native coin of the network.
Finally, in 2020, Binance launched an EVM-compatible blockchain, the Binance Smart Chain (now known as the BNB Smart Chain), a network that operates in parallel with the Binance Chain where smart contracts are powered precisely by B N B.
We can then find the token in different formats, which also allows BNB to be a very good means of transferring value from one chain to another. The formats are ERC-20 so EVM compatible: BEP-2 on Binance Chain and BEP-20 instead for BSC.
Now that we have seen basics and evolutions of this coin, let us delve into its specific use cases.
Index
What are the use cases of BNB?
The Binance Coin BNB is the flagship currency of the ecosystem created by the exchange, used primarily to access benefits on trading fees. However, it is also welcomed as a form of payment at third-party sites due to its speed and low transaction costs. But let’s look in detail at what the use cases are:
As we said, B N B is primarily used to pay commissions on Binance. By the way: if you want to lower them, sign up for Binance with our referral: you can expect 20% off fees forever.
The Binance crypto BNB is used to pay gas fees on Binance Chain and BNB Smart Chain. This gives it a rather important use case.
There is more, however: this crypto is also a means of payment for goods or services via the Binance Card and Binance Pay payment methods.
We also have the ability to book hotels and flights on Travala.com, as well as make donations on Binance Charity.
BNB also plays the role of utility token on several platforms in the BSC and is used to provide liquidity with liquid swap.
Finally, the coin enables participation in token sales reserved for the Binance community (Binance Launchpad).
Once the Binance Chain was introduced, BNB became the scarce element with which to secure the network, both during validation and delegation. Let’s explore tokenomics in more depth!
How much is the Binance Coin worth today?
BNB's Auto-Burn
Underlying BNB’s economics is the concept of Burn, a mechanism by which the total supply is programmatically reduced by taking a varying number of tokens out of circulation every quarter or so, until a 50 percent cut is reached.
Burn is that mechanism by which a number of BNBs are sent to an address permanently and irreversibly, so as to reduce the total supply. This used to occur quarterly as a result of the trading volume generated on the Binance Exchange.
With the introduction of Auto-Burn, the number of BNBs to be burned is determined according to the price of BNB and the number of blocks generated during the quarter.
When BNB ran on the Ethereum network as ERC-20 tokens, the burn was triggered through a smart contract. With the move to the Binance Chain, and later to the BSC, the burn is performed automatically on the main blockchain via the auto-burn command.
To date, there are several burns that have reduced the supply of this coin by quite a bit. If you are wondering “why invest in BNB?” this might be a good reason to add to the list. Remember, however, to do careful analysis before proceeding.
Where to buy BNBs?
The ideal home to buy B N B is obviously the Binance exchange, for years administered by founder Changpeng Zhao and now with Richard Teng at the helm.
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Being among the most capitalized, the coin is still available on other centralized exchanges such as KuCoin, as well as on a variety of DEXs such as PancakeSwap and Uniswap.
Is Binance Coin worth buying?
Binance is now a global reality, with millions of active users and daily transactions. The success is due to the system’s ease of use and numerous applications.
The future of Binance is not only related to the exchange but also to other things, such as the BSC, which has grown by leaps and bounds since its inception. It is bringing great innovations in DeFi, NFT and gaming, allowing the whole Binance system to rest on one more pillar. In all of this, BNB is the coin used for exchanges and validation of all transactions.
Once we get BNB we have so many possibilities suitable for every investor profile:
- Hold to the bitter end;
- Staking to earn rewards directly in BNB or partner tokens;
- Again, trading against hundreds of other tokens in different exchanges;
- Finally, like all other digital assets, it can be sent, donated or used to be spent on third-party sites.
Remember, however, that as much as Binance is not properly centralized, having proven that it also wants to bring to market decentralized products that do not rely on third parties for network security, network validators are few and often, behind large international corporations, reside interests hidden from most users. The rewards that the network generates are frequently divided among the most influential stakeholders, while small investors must share what remains.
What is your binance coin prediction, or even better question, what is your target for bnb coin price USD?
