The many facets of BNB coin, a digital asset by Binance

ProductNov 25, 2022
The many facets of BNB coin, a digital asset by Binance

BNB, a native coin of the biggest crypto exchange, was quick to gain traction. Once part of an ICO, it now supports retail payments, staking, crypto loans, and more. This large-cap asset is crucial for Binance's virtual ecosystem. Learn more about BNB, formerly known as Binance Coin, in our guide.

What is BNB coin?

BNB, initially an ERC-20 token on Ethereum, entered the spotlight in July 2017 during Binance's ICO (initial coin offering) campaign. Since then, it has risen to the fourth position by market cap, and its issuer is still the leading platform for crypto trading and exchange.

  • As part of the ICO, 200 million coins were distributed, with half of the amount reserved for the founders and angel investors. That ICO campaign raised $15 million through BNB crypto.
  • In April 2019, the BNB token switched blockchains and standards, becoming a BEP-2 asset on the proprietary Binance Chain. At the time, Binance Chain primarily served as a decentralized exchange (DEX), as it did not support smart contracts.
  • In February 2022, this blockchain merged with Binance Smart Chain (BSC) to form BNB Chain. The total circulation of BNB is now managed across its renamed components — BNB Beacon Chain and BNB Smart Chain. The cryptocurrency exists in two native formats — BEP-2 and BEP-20.

Binance, which now serves around 29 million customers, is led by CEO Changpeng Zhao. This charismatic tech executive is known for his active presence on social networks and interviews for the media. As of November 14, 2022, the company’s 24-hour volume of $16.91 billion was three times that of the runner-up, Deepcoin.

Regulatory scrutiny

In 2019, faced with a ban following an IRS investigation, Binance transferred all US-based operations to Binance.US. This separate exchange, registered under the United States Financial Crimes Enforcement Network, works in nearly all states. Binance is prohibited from operating in the UK and Italy, while Japanese officials have only issued a warning.

What is BNB crypto ecosystem?

BNB emerged as a vehicle for its issuer's fundraising campaign. More use cases appeared as the exchange gained traction and started leapfrogging competitors. Today, Binance is an umbrella brand for a fully-fledged crypto ecosystem. Its expansion has included:

  • a DEX
  • two blockchains
  • a peer-to-peer (P2P) crypto trading option
  • an option for crypto borrowing

BNB Chain uses a variation of Proof of stake — Proof-of-Staked-Authority (PoSA). This protocol allows only the largest stakers (currently, 41 nodes) to validate transactions. For comparison, Ethereum involves more stakers, as the minimum contribution is 32 ETH. As a result, BNB is more centralized, although it is also cheaper and faster.

Versatility of BNB coin

Historically, BNB tokens mainly served to lower transaction costs on the native exchange. This utility remains, as users can pay trading fees from their BNB holdings on Binance Exchange. The 25% discount is valid until July 13, 2023.

In addition, BNB is integrated into other Binance products. For example, it works as a governance token on BNB Chain, giving holders a say in the decision-making process and an opportunity to lower their BNB gas fees. Here are a few other uses of a BNB wallet at a glance (details below).

  • Payment method accepted by merchants (mainly products and services in the entertainment industry)
  • Instrument for investment in stocks, exchange-traded funds (ETFs), and other assets on multiple platforms
  • Collateral for loans

Binance Leveraged Tokens (BLVT) include derivatives with BNB leverage (BNBUP and BNBDOWN). These spot market assets give traders leveraged exposure to BNB without the risk of liquidation.

Due to BNB's popularity, scams abound (for example, here is the BNB Stake review page). Therefore, users should be extremely wary of any offers promising free BNB mainnet coins. However, developers can get some free testnet BNB through a BNB faucet for gas on Binance Smart Chain.

BNB price

At press time, the total market cap is $48,509,852,855.71, and BNB is trading at $297.10, with a 9.03% 24-hour change and a 42.63% drop since the beginning of the year. Traders can use an online BNB Calculator to convert any amount of BNB to USD and back.

According to CoinGecko, the highest BNB coin price of $686.31 was observed on May 10, 2021. This peak accompanied the rise of Dapps on the Binance Smart Chain. As the demand for the coin is linked to the popularity of Binance services, any BNB price prediction should consider three key factors:

  • users' desire for discounted trading fees
  • speculation
  • coin burns

The all-time low occurred on October 19, 2017 ($0.03981770). BNB spent most of 2021 and 2022 as the third or fourth biggest cryptocurrency by market cap. Currently, it is behind BTC, ETH, and USDT.

BNB USDT chart. Source: TradingView
BNB USDT chart. Source: TradingView

How to use BNB

Use cases for BNB have multiplied in the past few years. As a versatile digital asset, it underpins the entire Binance economy, from exchange to investment options.

Trading discounts for BNB holders. Source: binance.com
Trading discounts for BNB holders. Source: binance.com
  • Exchange token. Initially, when BNB was an ERC-20 token, it worked similarly to peers — as a digital asset for crypto exchange giving fee discounts. This utility still exists: BNB holders can save 25% on spot and margin trading fees and 10% on futures trading fees.
  • Governance token. BNB holders may propose changes to BNB Chain and vote on them. Most of these proposals concern the burn rate.
  • Gaming and entertainment. Currently, most participating merchants operate in the play-to-earn gaming segment — for example, users can take part in Decentraland LAND auctions. They can also buy virtual gifts and lottery tickets.
  • Exchange of value. The HTC smartphone brand, NOWPayments, and Travala.com accept BNB payments. In 2021, some brick-and-mortar stores connected to Binance Pay while the Binance Visa Card unlocked the utilities of fiat counterparts: payments without pre-conversion, Google Pay and Samsung Pay, ATM withdrawals, and more.
  • Crypto loans. Crypto lending platforms like CoinLoan accept BNB as collateral and loan currency. Users can borrow other cryptocurrencies or fiat against BNB or get BNB loans.
  • Staking. Users who stake BNB in the Binance Launchpool enhance network security. The amount and duration of each contribution determine the Annual percentage yield (APY). The BNB staking calculator compares BNB yields for three options: running a node, delegating BNB, and lending BNB Chain.
  • Support for crypto projects. Retail investors may commit their BNB to the Binance Launchpad to back crypto startups, such as new token projects.

BNB Burning

Binance uses two burning mechanisms to halve the total amount of BNB in circulation so it reaches 100 million. This goal stems from BNB's deflationary tokenomics.

The supply is capped, and the token is fully diluted, so all BNB coins have already been minted. Thus, by adjusting the circulating volume, Binance influences the BNB token price. It supports its competitiveness in two ways.

  • Real-time Burn. This mechanism was introduced by BEP-95. It involves collecting and burning gas fees per block at a fixed ratio determined by BNB Smart Chain validators.
  • Auto-Burn (previously quarterly burn). Every quarter, the system burns an amount of BNB depending on its price and the number of blocks produced. According to CEO Changpeng Zhao, Auto-Burn "will help the BNB community grow through providing greater autonomy, transparency, and predictability.”

The first Auto-Burn in January 2022 removed 1,684,387 BNB from circulation. The one on October 13, 2022, removed 2,065,152.416 BNB, leaving just under 160 million tokens in circulation.

Burn statistics as of November 23, 2022. Source: binance.com
Burn statistics as of November 23, 2022. Source: binance.com

BNB Recovery

In specific cases, users who lose BNB are eligible for reimbursement. Binance puts these tokens toward the official quarterly burn count, provided the amount is between $1,000 and the planned burn volume.

The BNB Pioneer Burn Program was launched in August 2020. It covers "honest mistakes" involving transfers to BEP-20 contract addresses verifiable via bscscan.com (BNB explorer). In Q3 2021 alone, Binance recovered lost BNB worth $1.5 million.

Where to buy BNB

Binance users can get the cryptocurrency in three ways: buy BNB with a credit card/debit card, via bank transfer, P2P trading, or a third-party payment channel like ADVCash. Yet, although the biggest, Binance is not the only convenient BNB exchange.

How to buy BNB without Binance

Individuals can buy the BNB coin by exchanging their deposits on other popular platforms. Typically, the top-up options include crypto and fiat gateways.

As a result, one could buy BNB with a debit card, make a bank transfer, use PayPal, and more. For withdrawals, convert BNB to USD (or another fiat currency) or send the coins to your BNB wallet.

The ease of converting USD to BNB has a price. Typically, considering the fees for fiat transactions, the cheapest way to buy BNB is by depositing and exchanging stablecoins. In this case, the BNB USDT chart comes in handy.

BNB on CoinLoan

CoinLoaners can use BNB in a variety of ways. This popular cryptocurrency works with all our products: Loans, Interest Account, Wallet, and Exchange. You can buy BNB for fiat or other crypto — for example, swap ETH for BNB. Alternatively, borrow the Binance token against your crypto or use it as collateral! We also offer a competitive BNB yield.

Is this the best place to buy BNB? We'll leave users to decide. As a licensed financial institution in Estonia, CoinLoan adheres to the highest asset protection standards and takes pride in its zero-incident record. Here are three ways to make your BNB work:

BNB coin loans

Borrow BNB in seconds, or turn it into collateral for fiat or other cryptoassets. Our Loans include flexible conditions and instant approval without lock-ins. Choose the most convenient term — from one month to three years — and an LTV rate between 20% and 70%.

BNB yield

Whether you move your holdings from a BNB crypto wallet or get BNB via Exchange, our Interest Account provides up to 7.2% APY. This interest is accrued daily and paid monthly. Choose your option:

  • 5.2% APY on BNB
  • Up to 7.2% APY on BNB with CLT Staking

BNB on CoinLoan Exchange

Our intuitive Exchange interface supports quick and hassle-free conversion. Swap ADA to BNB, BTC to BNB, ETH to BNB, and explore dozens of other pairs. Turn your Binance token into fiat, stablecoins, or other cryptocurrencies — for example, BNB to LTC or BNB to USDT — just as quickly. Choose the assets, enter the amount, and click or tap Exchange under our BNB price calculator.

Final word

BNB is a multi-purpose cryptocurrency launched by a leading crypto exchange. Its market cap is closely connected to Binance's prominence, while the utilities extend far beyond trading fees. BNB holders can pay for goods and services, take out crypto loans, invest in startups, and more. Buy, borrow, or deposit BNB to CoinLoan to unlock its potential and keep track of BNB crypto news!

Disclaimer:

The information provided by CoinLoan (“we,” “us,” or “our”) in this text is for general informational purposes only. All investment and financial opinions expressed by CoinLoan in this text are from the personal research and open information sources and are intended as educational material. All outlined information is provided in good faith. However, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information in this text.

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