What is BNB coin?
Binance, one of the biggest cryptocurrency exchanges in the world, created the BNB coin. In 2017, the BNB coin was released as an ERC-20 token on the Ethereum blockchain. Since then, it has moved to Binance’s own blockchain, called the Binance Chain. BNB coin can be used to pay for trading fees on the Binance exchange, take part in Binance Launchpad token sales, and pay for other services offered by Binance. Binance also uses a portion of its profits to buy back and “burn” BNB coins, which reduces the number of coins in circulation and raises the value of the ones that are left.
The initial Coin Offering (ICO) for BNB took place from June 26 to July 3, 2017, which was 11 days before the Binance Exchange started trading. Even though BNB was released through an ICO, it does not give users a stake in Binance’s profits and is not an investment in the company.
At the ICO, 100 million BNB were offered, but the total number of BNB in circulation is now less than that because BNB is being burned periodically and in real-time.
While being based on the Ethereum network at first, BEP-2 BNB coins eventually replaced ERC-20 BNB tokens 1:1. On April 18, 2019, it was announced that BEP-2 BNB, the native coin of the Binance Chain, would be released on the mainnet.
Since then, BNB has continued to play a role in Binance’s growing ecosystem, even though Binance is now more than just an exchange for digital assets.
What does BNB coin provide?
BNB has many uses, both inside and outside the BNB Chain ecosystem. It is up to you to decide how to use your BNB. A lot of people also use it to pay transaction fees on the Binance exchange.
BNB powers the Binance DEX (on the Binance Beacon Chain) and hundreds of applications on the BNB Smart Chain (BSC).
Just like other evolving cryptocurrencies, the Binance Coin can be used for things other than the Binance exchange, such as:
- Trading: Binance Coin can be traded on different exchanges for other cryptocurrencies, depending on the rules of the exchange.
- Payment processing: Merchants can accept BNB as a way for customers to pay, giving customers more ways to pay.
- Booking hotels and flights: On some websites, you can use BNB to book hotels and flights.
- Entertainment: BNB can be used to pay for virtual gifts or to buy lottery tickets, among other things.
- Investing: Binance Coin can be used on several platforms to buy stocks, ETFs, and other assets.
- Loans and transfers: In some places, BNB can be used as collateral for loans. Also, there are apps that let people use Binance Coin to split bills and pay friends and family.
BNB Burning
According to the Binance whitepaper, 20% of the company’s quarterly profits are used to buy back Binance Coins and burn them, destroying them completely. Binance has always done quarterly burns. The 13th quarterly burn will happen on October 17, 2020.
Binance will keep buying back and destroying 100 million Binance coins, which is half of the total supply until it buys back and destroys all of them. This makes sure that there will always be a limited number of Binance Coins, which makes them harder to get and more valuable.
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