Binance is a known name for anyone who is a participant in the cryptocurrency sector. The native currency of Binance namely BNB has been around since 2017 but it has climbed the ranks rapidly. This article discusses in detail BNB origin, dynamics, and tokenomics.
What is Binance?
Binance is one of the biggest cryptocurrency exchanges in the world by trading volume. The firm was founded in 2017 in China. However, it exited the Asian territory on account of the crypto exodus implemented by the Chinese government in the same year. The firm was founded by its existing CEO Changpeng Zhao.
What is Binance Smart Chain (BSC)?
Binance Smart Chain or BSC is the blockchain that Binance launched in 2020. The product is designed for a high-end blockchain network that is compatible with Ethereum Virtual Machine or EVM requirements.
At the same time, BSC can also support smart contracts. The firm incorporates the PoS consensus model and dual-chain structure. In this manner, BSC has continued to compete with the Ethereum blockchain. At the same time, the blockchain has managed to maintain cheaper gas and faster processing.
BSC can process at the speed of 100 TPS or transactions per second. The network hosts a vast array of decentralized applications. At the same time, it has also incorporated some DEXs and gaming projects. This network has a cross-chain interoperability feature for bridge protocol communication and cryptocurrency transfers.
What is Binance Coin?
Binance Coin (BNB) was first launched on the Ethereum blockchain. However, the token is now hosted and issued by a native blockchain called Binance Smart Chain or BSC. BNB supply is capped at 200 million tokens.
At present, the circulatory supply of this Binance exchange token is around 155.86 million. The ATH or all-time high price of BNB was recorded on 10th May at $686.31 per unit. The current price of the token is around $226.62.
BNB started as a utility token that offered trading discounts on the Binance exchange. However, currently it has incorporated more utilities such as transaction fee payment on BSC, travel booking, entertainment resources, online purchases, and financial services access.
The existing market cap of BNB is reported to be around 36.13 billion making it the 3rd largest cryptocurrency by market cap.
BNB is ERC-20 compliant since it was first hosted on the Ethereum network. During an ICO or Initial Coin Offering in 2017, angel investors purchased 10% or 20 million of the BNB supply. Meanwhile, the foundational team reserved around 40% or 80 million tokens.
The remainder of 50% BNB tokens or 100 million was left for the remaining participants of ICO. The ICO funding assisted in the creation of BSC.
Binance manages the total supply of BNB by using 1/5th of its revenue to repurchase BNB and send them to burn addresses. These burning events take place at regular intervals. After the latest BNB burning event, number 15 the total supply of BNB has reduced to 169 million. These burn events are organized once every quarter and the amount of BNB for burning is determined based on the current circulatory supply.
Use Cases for BNB
Binance Coin was a utility token that enabled trading fee discounts at the time of its launch in 2017. However, now the token is used for supporting various decentralized applications that are hosted on the Binance Smart Chain.
At the same time, it works as gas for Binance.com, Binance decentralized exchange, and Binance Chain. In addition, BNB is also a payment method at Crypto.com, Monetha, and HTC.
On the other hand, BNB holders may also make travel bookings at TravelbyBit, Trip.io, and Travala.com. The users may make entertainment products such as virtual gifts, lotteries, and card packs.
Platforms like BitTorrent, Canva, and Storm accept payment in the form of Binance Coin. Some forums like ETHLend and Moeda Investments offer financial services in exchange for BNB tokens. Here is a list of use cases BNB offers:
- Credit Card payments.
- Travel Arrangements
- Online Payments
- Virtual Gift Purchases
- Loans and Transfers
- Charity Donations
BNB is the native coin issued by the Binance exchange. With the passage of time, the token use case has continued to grow. Binance Coin is the 3rd largest-ranking cryptocurrency on the global leaderboard. Binance is facing some regulatory issues at present but the firm has continued to maintain the top ranking of its native cryptocurrency despite all challenges.