BNB What is BNB and What Is It Used For?

We will discuss more on BNB below, whereas BUSD is a stablecoin whose value is pegged to the US dollar currency. While the value of BNB is volatile, BUSD is designed to be as stable as the US Dollar, making it a hedge against price volatility in the crypto market. To learn more about the Binance exchange, be sure to read our comprehensive Binance review. While ERC-20 tokens rely on the proof-of-stake (PoS) consensus, which allows them to be extremely scalable, and allows for the creation of smart contracts. Unlike PoS, the Binance blockchain does not support smart contract functionalities.

The issue price was 1 ETH for 2,700 BNB or 1 BTC for 20,000 BNB (around 0.11 USD back then). One can also use BNB to invest in certain ICOs listed through Binance’s Launchpad program. New cryptocurrencies are listed on the Binance exchange, which provides a seamless marketplace for trading in a variety of established and new virtual tokens. Binance Coin is one of the most successful utility tokens with a growing use case list.

This has largely kept the price up as traders hold BNB instead of dollars. BNB initially traded around $0.10 before rapidly shooting up to $2.80 in 2017. Until recently Binance held the number one spot by volume for cryptocurrency exchanges worldwide.

Utility of BNB Tokens

In May 2024, Binance Exchange was the second largest (as verified by Coinmarketcap) cryptocurrency exchange in the world, with a daily trading volume of $11.8 billion. Indeed, more than 180 digital assets have been issued on BSC, and millions of users have consumed BNB for utility purposes in connection with BSC. On Binance’s trading platform alone, approximately two million users have used BNB to pay for trading fees totaling more than 40 million BNB on more than 127 billion trades. Binance exchange launched in July 2017, but before the launch, the exchange needed to raise necessary funds to run the business. The Binance team, led by its current CEO Changpeng ‘CZ’ Zhao, conducted an initial coin offering to sell BNB tokens to interested investors.

BNB Price Live Data

According to the company website, its mission is to become the infrastructure services provider for the entire blockchain ecosystem. Binance also charges withdrawal fees for moving assets out of your account into private wallets. The withdrawal fees vary by the coin, but they are flat fees, not percentage-based.

More uses guides to open bitcoin wallet account are discovered and added regularly, and this makes BNB even more valuable. In 2001, Zhao joined Bloomberg as head of tradebook futures development. He spent four years with the company and later joined Fusion Systems as a partner. Bennett is an editor at Coin Central and freelance technology writer specializing in blockchain, software development, and AI writing.

Contracting the money supply in this way should counteract the effects of the decreasing discount. The total supply is limited to 200 million BNB, after which no more coins will be created. Whether or not BNB is a good investment depends on your investing goals. Additionally, past results of an investment do not guarantee future outcomes. Having said that, Binance has seen a meteoric rise in its value seeing the price of a single BNB token rising from $0.15 at the time of ICO to a high of $685 in May 2021.

According to the Binance whitepaper, exactly half of the maximum supply of BNB coins was allocated towards the initial coin offering (ICO) and public sale of the coin. The ICO was held in July 2017 shortly after the exchange launched, and saw Binance raise $15 million in funding, with BNB price at $0.10 during the ICO. Taking BNB price today, that represents an almost 4200X return on investment (ROI). Another 40% of the total supply, or around 80,000,000 BNB coins, was distributed among the founding members and team.

Any transfers between the Binance Chain and the BSC cause a redemption and subsequent burning of an equal number of tokens. BNB was initially created to serve as a utility token within the Binance exchange. Due to a large number of sell orders, the market becomes saturated,  leading to a massive fall in price. There is an initial maximum supply of 200,000,000 BNB coins, of which 168,137,036 are currently in circulation as of September 2021. In total, 38,683,447.66 BNB tokens have been destroyed, reducing its initial 200M supply by 19.34%. This has helped Binance overcome several exploits of protocols on BSC, such as a $200M exploit of Pancake Bunny and several hacks of Cream Finance.

1. An investment of $1,000 during its Initial Coin Offering (ICO) in July 2017 would have multiplied to a massive $4.5 million as of May 2021, when the coin reached its current all-time high.
2. Binance agreed to pay $4.3 billion to settle charges; Changpeng Zhao stepped down as CEO and agreed to pay $50 million toward the settlement.
3. Indeed, more than 180 digital assets have been issued on BSC, and millions of users have consumed BNB for utility purposes in connection with BSC.
4. Therefore, if you trade a lot on Binance, you should consider getting BNB and using them to pay for your fees.
5. The ICO was held within three weeks, starting on July 1st and ending on the 21st.

This makes BNB unique among most new coins since it already has a practical use case. Most investors will get the highest ROI out of cashing in on the BNB rebate. However, in the future, it’s possible the value of BNB could grow as an asset. For the earliest investors, they’ve already seen a large return on BNB. It’ll be interesting to see if investors continue to take the rebate or hold BNB in hopes that it will appreciate. While fee payment is the primary purpose of the BNB token, you can also use it to invest in certain ICOs that participate in Binance’s Launchpad program.

The Future of the BNB Token

Despite these hacks, users return to Binance for its low fees and the abundance of lucrative meme coins in its ecosystem. Since 2013, Changpeng Zhao has been actively involved with blockchain technology and cryptocurrencies. He became head of development at Blockchain, and in 2015 he founded BijieTech. In 2017, Zhao officially launched Binance, and he has been the CEO of the company ever since. It currently trades around $4.60 which highlights the depreciation of the overall altcoin market.

As one of the white label payment gateway getting started cryptocurrency trading world’s most popular utility tokens, BNB is useful to users in a wide range of applications and use cases. Binance coin (BNB) is the exchange token of the Binance crypto exchange. That means demand for the token is linked to demand for the exchange’s services. BNB was created in 2017 as a utility token for discounted trading fees. Since then, its uses have expanded to numerous applications on a wide range of platforms.

What Is Binance Coin (BNB)?

Within the crypto industry, a coin burn is a deflationary mechanism that is used to permanently remove coins from circulation. Most cryptocurrency projects, including Binance, periodically burn coins to sustain the value of their digital asset and create a deflationary effect. She started her career as a TV anchor and presenter on China Travel TV in 2012. Later, in 2014, Yi co-founded OKCoin, which was the largest fiat-to-crypto exchange in China at the time. In 2017, she joined forces with Changpeng Zhao, and together they created the largest crypto exchange globally — Binance.

In September 2020, Binance launched a ‘better’ version of Binance Chain with smart contract functionality dubbed the Binance Smart Chain (BSC). The BSC is a parallel blockchain with exact comparison to the popular Ethereum blockchain. It even shares a nlu design codebase and maintains compatibility for decentralized applications (dApps) running on the Ethereum Virtual Machine (EVM). In addition, the team devised a discount plan for token holders and early platform users in order to encourage participation in the ICO. The plan represented a graduated scale with a larger discount offered in the first year of operation and less in the fourth year. The ICO was held within three weeks, starting on July 1st and ending on the 21st.

Their ICO Launchpad is one early example of an added feature using the BNB coin. First, it’s worth understanding the basic mechanics of a currency exchange before we go any further. Solving some technical problems with exchange software is among Binance’s key competitive advantages. However, depending on how you want to use the Binance Coins, you may find that keeping them on the Binance exchange is the best option. If you have to use an external wallet, Trust Wallet is a solid alternative operated and maintained by Binance. After installing, you will be prompted to either recover a previous wallet or create a new one.

Popular Tokens on the BNB Smart Chain (BEP Chain

To counter this undesirable event, Binance adopted the concept of coin burning within their whitepaper, committing to reduce the total BNB supply by 50% or 100 million tokens. The token was launched in July 2017 to be used as a tool for crowdfunding in the Binance ICO. As a utility token, it would enable its holders to claim trading fee reductions on the exchange once the platform launched. Binance raised about $15 million from the ICO, and over 100 million tokens of BNB were distributed to the public. Despite its humble background, BNB has grown to become more useful within the Binance ecosystem. Fortunately, Binance has a good business model which incentivizes traders to continue using BNB to pay for their trading fees.