What Is BNB?
BNB is the native token of Binance, which is one of the most popular exchanges in the crypto world. The successful operation of projects belonging to the ecosystem of Binance depends heavily on BNB coins. These projects include the Binance Wallet, Binance Chain, Binance Smart Chain, Binance Research, and Binance Academy.
The token is very beneficial for Binance as it attracted a vast amount of investors after it was launched and it is the driving force of the whole ecosystem. If you’re interested in the current BNB price, check out its price chart above.
However, even though the BNB crypto asset initially was an ERC-20 token based on the Ethereum blockchain, after creating the Binance Chain, it became the native token of the network.
During the time that BNB tokens were a part of the Ethereum network, they were secured by the Proof-of-Stake consensus mechanism. However, after Binance released its own blockchain, the consensus mechanism of the newly issued tokens was switched to Proof-of-Work.
Besides that, the Tendermint byzantine-fault-tolerant (BFT) consensus mechanism also secures BNB coins. Essentially, it’s a distributed network's ability to attain agreement on the same value despite some nodes failing to reply or providing inaccurate information.
The Developers of Binance
Binance was founded by Changpeng Zhao, also known as CZ, in 2017. The project started with an Initial Coin Offering (ICO) for BNB coins, which raised $15 million.
Changpeng Zhao is the CEO of Binance. He has a lot of experience in the cryptocurrency sector due to the fact that he has been working with blockchain technology since 2013. Early in his career, he worked at Bloomberg Tradebook, where he created FinTech-based software. Besides that, CZ served as the CTO of OKCoin exchange, which was one of the most popular exchanges in China that exchanged fiat currencies for crypto assets.
Use Cases of BNB
One of BNB's primary objectives is to serve as the driving force of the Binance Chain. In addition to that, the Binance exchange requires BNB tokens for trading. However, there are a ton of additional use cases for BNB tokens apart from these two:
- A way to improve the tier of a Binance account. You are able to get VIP status on your Binance account if you have a certain amount of BNB tokens in your account and your 30-day trading volume exceeds specific limits. This will provide you with additional discounts on fees and other benefits.
- A way to reduce trading fees. BNB tokens can be used as a means to get discounts on Binance fees. You can get a 25% discount on transaction fees when using BNB tokens on Binance DEX.
- The base of lottery allocations in IEO Lottery. Initial Exchange Offerings (IEO) on Binance are carried out utilizing lottery allocations based on the quantity of BNB held by users.
- A currency used outside Binance. BNB tokens can be used to make a variety of payments, including those for virtual gifts, hotel bookings, and much more.
- Crypto dust conversion. BNB tokens can be used to convert non-tradable cryptocurrency amounts, known as dust, lingering in Binance accounts. Dust is a small amount of cryptocurrency left behind from a trade or transaction.
Besides, you should check out the BNB price chart that is placed above since it displays the current, as well as the previous, BNB price.
Tokenomics of BNB
The max supply of BNB is 200 million tokens. During its ICO, 100 million tokens were allocated, allowing Binance to raise $15 million. At that time, the BNB price was $0.10 per token. The remaining half of the supply was distributed to founding members and the Binance team (40%), as well as to angel investors (10%).
Since the BNB token has a fixed number of tokens in circulation, it means that BNB is deflationary. In order to keep the BNB price from decreasing, it employs BEP-95 (Binance Evolution Proposal), which is a real-time burning mechanism. The burning of BNB coins is conducted once every three months. The worth of burned tokens depends on the BNB price at the time of burning. For instance, around $772 million worth of BNB tokens were burned on April 19, 2022 (during the 19th BNB Burn). Overall, Binance aims to reduce the total BNB supply to 100 million tokens.