What is Binance's BNB?
Understanding BNB: Binance's Native Cryptocurrency
BNB, originally known as Binance Coin, is the native cryptocurrency of the Binance ecosystem, which includes the world's largest cryptocurrency exchange by trading volume. Launched in 2017 as an ERC-20 token on the Ethereum blockchain, BNB has since migrated to Binance's proprietary blockchains, enhancing its utility and integration within the Binance ecosystem.
Evolution and Purpose of BNB
Initially, BNB was introduced to offer users discounted trading fees on the Binance exchange. Over time, its functionality has expanded significantly, encompassing a variety of applications:
How Can You Use BNB?
BNB was initially launched as part of Binance’s Initial Coin Offering (ICO) and was designed as a utility token for the Binance platform. According to Binance’s whitepaper, BNB’s primary purpose was to allow users to pay discounted fees on the Binance exchange and to serve as the native token for the Binance Chain.
Over time, BNB’s utility has grown both within and outside of Binance’s ecosystem. Below is an overview of its key use cases:
1. Reduced Trading Fees
Users who pay trading fees on Binance using BNB receive a 25% discount on their fees, incentivizing its use for transactions on the platform.
2. Binance Account Tiers
BNB holdings and a 30-day accumulated trading volume determine user account tiers. Higher tiers grant VIP benefits, including additional trading fee discounts and exclusive perks.
3. Dust Conversion
BNB enables users to convert small, non-tradeable balances of various cryptocurrencies (referred to as “dust”) into BNB within their Binance accounts.
4. IEO Participation via Lottery
Initial Exchange Offerings (IEOs) on Binance are conducted using a lottery system. The number of lottery tickets users can acquire depends on the amount of BNB they hold.
5. Binance Chain Utility Token
Similar to how Ether (ETH) is used to pay for transaction fees on the Ethereum blockchain, BNB is essential for paying fees on Binance Chain. It is also required for trading on Binance DEX, the decentralized exchange built on Binance Chain.
6. Spending as a Cryptocurrency
Outside Binance’s ecosystem, BNB can be used for payments in various ways, including:
- Booking travel services
- Paying credit card fees
- Purchasing gifts
- Other merchant transactions
A comprehensive list of merchants and services accepting BNB is available on Binance’s official website.
7. General Cryptocurrency Payments
Like most cryptocurrencies, BNB can be used to pay for goods and services wherever it is accepted by merchants. Its flexibility ensures it can serve as a payment method beyond Binance’s platform.
While these are the primary use cases for BNB, new applications continue to emerge as the cryptocurrency ecosystem evolves. BNB remains a versatile token with growing adoption both within and beyond the Binance ecosystem.
The BNB Chain Ecosystem
The BNB Chain, formerly known as Binance Smart Chain (BSC), is a blockchain platform that supports smart contracts and decentralized applications (dApps). It operates alongside the BNB Beacon Chain, which handles governance and staking. This dual-chain architecture allows users to build decentralized apps and digital assets on one blockchain and take advantage of the fast trading offered by the other.
Tokenomics and Supply Management
BNB has a total supply cap of 200 million tokens. To manage supply and potentially increase scarcity, Binance conducts quarterly "burns," where a portion of BNB tokens is permanently destroyed. These burns are based on Binance's profits, with the latest burn removing 1.94 million BNB (equivalent to $670.78 million) from circulation.
To Learn more about Binance and BNB make sure to visit: https://www.binance.com/
