Binance Coin (BNB) is the topic of this week’s Coins article. History, fundamentals and use cases.
What is Binance Coin?
As the name suggests, Binance Coin is a cryptocurrency issued by the world’s biggest (based on trading volume) cryptocurrency exchange, Binance, which launched in July 2017. BNB was there from the start — its ICO (=Initial coin offering) started on the July 1 and ended later that month. Only 50% of total BNB supply was made available for the ICO — founding team held on the other 40% and remaining 10% was for Binance’s angel investors.
The initial total supply of BNB was 200 000 000 coins. Not only that the supply won’t ever increase, it will be regularly decreased as part of BNB supply will be burned. Binance’s Whitepaper gives more insight into this deflationary mechanics: “Every quarter, we will use 20% of our profits to buy back BNB and destroy them, until we buy 50% of all the BNB (100MM) back. All buy-back transactions will be announced on the blockchain. We eventually will destroy 100MM BNB, leaving 100MM BNB remaining.”
Current circulating supply is roughly 168 000 000 BNB as several burns have already taken place throughout the past few years. Fun fact: the most expensive burn happened on April 16, 2021 and was worth nearly 600 000 000$.
Binance and BNB
As mentioned above, BNB was inseparable part of Binance’s platform from the beginning — the funds company gained from ICO were used to build the actual platform itself and perform upgrades of the system and on marketing, branding and promoting Binance. Part of the funds (15%) was also kept as an emergency reserve.
Initially, Binance Coin started as traditional ERC-20 token on the Ethereum blockchain. However, that changed as Binance later introduced its own blockchain and BNB started being issued from Binance Chain.
The ever-growing Binance platform provides plenty of use cases for BNB, from the most basic ones, such as being an asset for trading, to more unique ones.
BNB Use cases
What can you do with your BNB, what can you use it for?
As most cryptocurrencies, you can use it for trading — Binance offers plenty of different BNB trading pairs, from stablecoins to other altcoins. The price of BNB has risen dramatically in 2021 and what was worth 0.10$ during ICO is now worth several hundreds of dollars. Next, even simply holding BNB on Binance has its benefits: you can use BNB to pay for gas (transaction) fees on the exchange and in turn will be charged several % lower fee.
Binance Coin can additionally be used for all kinds of payments — to book travel accommodations, for entertainment purposes, to pay for online services and even for financial purposes.
One can also use it to invest in certain ICOs that are listed through Binance’s Launchpad program or for staking it directly on Binance (e.g. in BNB Vault or other provided options).
Personally, I have been using Binance as my main cryptocurrency exchange since 2018 and it was also in this year, I bought my first few BNBs. I have been experimenting with and testing above-mentioned staking and BNB Vault and cannot really say anything bad about either Binance or BNB. But I definitely recommend everybody to do their own research and form their own opinion.