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Binance is one of the biggest cryptocurrency exchanges, and Binance Coin (BNB) is its native cryptocurrency. BNB was initially an ERC-20 token on the Ethereum blockchain. But later, BNB migrated to its own blockchain, Binance Chain.
Table of contents
- Who Created Binance Coin?
- How Does Binance Coin Work?
- Use Cases of Binance Coin
- Binance Coin Tokenomics
- Future of Binance Coin
The coin is used for many purposes. Its users get lower trading fees on Binance, can participate in token sales, and it even powers decentralized applications (dApps) on Binance Smart Chain. It is very important to understand what BNB is if you are involved in crypto, because Binance and BNB have a significant impact on the entire crypto landscape.
Who Created Binance Coin?
Binance Coin was created by Binance. Binance is a company launched by Changpeng Zhao, commonly known as CZ. Binance was officially launched in 2017, and BNB was introduced soon after that in an initial coin offering (ICO).
The ICO took place in July 2017 and helped the company to raise approximately $15 million. At that time, 200 million BNB tokens were created. A portion was allocated to investors, the team ofBinance, and the general public. Over time, Binance implemented various updates and expansions. It increased BNB’s utility and value.
Initially, the main function of BNB was to reduce trading fees on Binance. However, over time, its use cases have expanded. Now, BNB powers the smart contract functionality, DeFi, NFTs, and plays an important role in the crypto market in general.
How Does Binance Coin Work?
BNB plays an important role in the Binance ecosystem. It facilitates transactions on the exchange, but not only that.
Role in Binance Ecosystem
BNB offers discounted trading fees for Binance traders. This is why this coin is attractive for traders who use Binance. BNB also powers Binance Smart Chain and all projects that run on it.
Trading Fees and Utility
When traders trade on Binance, they pay fees for each transaction. When they use BNB, they get a discount on those fees. The discount is around 50% during the first year, and reduces over time. Even though trading fees on Binance are not high but in the long term, these discounts allow to save a lot of money. And this is why they are valued by active traders.
BNB is also used in Binance Launchpad. Binance Launchpad is a platform for Initial Exchange Offerings (IEOs). Investors who hold and stake BNB can participate in token sales organized by promising new projects.
Benefits for Users
BNB offers multiple advantages to daily users, too. The coin allows to get access to discounts, faster transactions on Binance Smart Chain, and even participation in the Binance ecosystem. Over time, BNB’s adoption is growing, and it impacts its value.
Use Cases of Binance Coin
BNB is used not only for trading. It has many other use cases.
Paying Trading Fees
As mentioned earlier, BNB can be used to pay for trading fees on Binance. This is one of the main functions of BNB and it is also one of the main reasons why traders hold the coin.
Participation in Binance Launchpad
Binance Launchpad is a platform that helps new blockchain projects raise funds. Users can buy new tokens there with BNB. This is how investors gain early access to promising projects before their tokens become available widely. This process of selling tokens is called an Initial Exchange Offering (IEO). It has helped many innovative projects to gain traction and funding.
DeFi and NFT Integration
The BNB coin is used in decentralized finance and NFT projects that run on Binance Smart Chain. Binance Smart Chain supports smart contracts and dApps, just like Ethereum. But it is cheaper and faster. This is why many decentralized exchanges, DeFi platforms, NFT projects and marketplaces, and other crypto projects now launch on this blockchain and use BNB.
Payments and Services
BNB is not limited in its use to the Binance ecosystem only. Many businesses accept it for paying for their services and products. You can buy in some online shops with BNB, you can book trips, and pay with BNB for other services. Over time, the BNB adoption grows, and the coin continues to become more and more useful for everyday transactions.
Binance Coin Tokenomics
Tokenomics is the economic structure of a crypto project, it is how the coin works within a project. When we speak about tokenomics, we consider the token supply, demand, incentives, and many more other things.
Total Supply of BNB
200 million BNB tokens were created initially. However, Binance introduced a burn mechanism to reduce the total supply over time. This has to increase the coin scarcity and its value.
BNB Burn Mechanism
Every quarter, Binance performs token burns. Tokens are sent to a special wallet and are removed from the circulation permanently. This is a way for Binance to reduce the supply of BNB and it helps to maintain the token value. Binance is going to reduce the BNB supply to 100 mln coins at the very end.
Supply Limits
BNB has a fixed maximum supply. This is done so that inflation doesn’t eat up the coin value over time. Then, Binance introduced the burn mechanism. It helps to reduce the BNB circulating supply even more and maintain its value.
Future of Binance Coin
BNB is a promising coin. It is used for one of the biggest exchanges out there, and this is why its value will be growing. As long as Binance is fine, so is BNB.
Growth Prospects
BNB is the native coin of Binance. This is why its growth and development is connected with the Binance growth. When Binance introduces new services and features, the BNB grows in value. And when Binance faces challenges, BNB decreases in value.
Another factor that impacts the BNB value is the adoption of Binance Smart Chain. This blockchain is widely used by many projects. It has a positive impact on BNB.
Ecosystem Development
Binance constantly introduces new features, launches new projects, and expands partnerships. It launches new collaborations with businesses, financial institutions and developers. As more applications integrate BNB, its value grows.
Price Predictions
It is difficult to make an accurate price prediction for crypto. Many specialists believe that the future of BNB is promising. It has strong utility, its adoption is growing, and its burning mechanism helps to maintain the BNB value. It all shows that the coin has the potential for further growth.