Introduction
Binance coin (BNB) is the native cryptocurrency of the BNB Chain, Binance’s blockchain. This article provides a comprehensive guide to BNB, exploring its features, purpose, and more.
What is BNB?
In 2017, Binance introduced the BNB crypto to the market. BNB functions as a key utility coin within the Binance ecosystem, covering exchange transaction fees and enabling participation in various exchange features.
BNB ranks among the top five cryptocurrencies in market capitalization, symbolizing collaboration, participation, and open-source development.
History of BNB
Binance coin (BNB) emerged in July 2017 as part of Binance’s mission to revolutionize digital asset trading. The coin raised $15 million through an Initial Coin Offering (ICO), selling 100 million tokens at an initial price of $0.11 each, representing 50% of the total supply.
How does BNB work?
Initially launched as an ERC-20 token on the Ethereum blockchain, BNB has migrated to the main BNB Chain, consisting of the BNB Beacon Chain and the BNB Smart Chain. The BNB Chain expanded its role beyond fee payments, introducing features like the Binance Launchpad in 2018 and the Binance Smart Chain in 2020.
BNB Chain Structure
- BNB Beacon Chain: Manages governance activities, including staking and voting.
- BNB Smart Chain: Handles the creation and execution of smart contracts.
BNB Holders’ Benefits
- Save 25% on spot trading fees
- Save 25% on margin trading fees
- Save 10% on futures trading fees
In 2019, the introduction of Binance Chain and the migration from Ethereum provided more control, leading to the Binance DEX.
Unique Features of BNB
- Reduced transaction fees
- Token sales through Binance Launchpad
- Staking rewards
- Utility beyond Binance
- Regular coin burns
Tokenomics of BNB
Binance pre-mined 200 million BNB. The distribution process saw founders receive 80 million BNB, vested over four years. Public ICO sale distributed 100 million BNB, while 20 million BNB went to investors without vesting restrictions.
BNB Burning
The “Auto Burn” program began in late 2017, quietly burning over 38 million tokens through quarterly burns. Binance aims to continue coin burns until 100 million BNB is destroyed — 50% of the total supply.
BNB Usage
- Trading: BNB serves as a base currency for trading pairs on the Binance exchange.
- Transaction fees: BNB can be used to pay transaction fees on the Binance exchange, offering reduced fees.
- Staking: BNB can be staked to earn rewards, securing the network and rewarding users.
- Utility coin: BNB operates as a utility crypto within the Binance platform, providing various benefits.
- DeFi and NFTs: BNB is integrated into various DeFi projects and NFT ecosystems.
BNB Wallet
Anyone looking to buy BNB must have a safe and secure BNB wallet. Consider your wallet as your portal to your assets. Trust Wallet is a great hot wallet option, while Trezor, Ledger, and Safepal are leading hardware options.
BNB: On the Fast Track of Adoption
The versatility and role of BNB within the Binance ecosystem make it a unique crypto asset. Despite challenges, BNB’s continued growth and adoption suggest a promising future in the evolving DeFi landscape.
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