If you are a crypto fan, it’s unlikely that you haven’t heard about the Binance exchange. Many users know Binance as the famous cryptocurrency exchange, but the truth is that Binance is not only an exchange. It has a native coin called Binance Coin or BNB that opened its way into the list of successful cryptocurrencies in a short time. In this article, we will go through the BNB token and its functions. Stay with us.
What is Binance Coin or BNB?
Binance Coin is the native coin of the Binance exchange. Its trading sign in cryptocurrency exchanges is BNB. At first, BNB was only developed to provide Binance users with some discount in fees, but its functions were gradually broadened. BNB was first created as an ERC-20 token on Ethereum, but it later on got transferred to Binance Smart Chain. Its ICO started in June 2017 and lasted till July 2017. BNB has a supply cap of 200 million units. At the time of writing, it is the fifth-largest cryptocurrency by market cap and stands after Bitcoin, Ethereum, Tether, and USD Coin. BNB can be traded for all other cryptocurrencies like BTC and ETH. It can also be used for trading on Binance, Binance DEX, and projects on Binance Smart Chain. Users having BNB can still get some discount on their trades on Binance.
Who created BNB? The history of Binance Coin
Binance Coin was developed by the Binance team, and under the direct control of Changpeng Zhao, Binance’s founder and CEO. We mentioned that BNB had an ICO in 2017. During this ICO, 100 million units of BNB were sold. At that time, BNB’s price was $0.15. So, Binance was able to collect 15 million dollars during this ICO. 35% of this amount was allocated to the required developments, 50% was used for marketing and branding, and the remaining 15% was reserved for emergencies and unpredicted situations. Two years later, Binance founded its native blockchain called Binance Chain, and BNB became the native coin of this blockchain.
How does Binance Coin work? The functions of BNB
BNB interacts with two blockchains: Binance Chain and Binance Smart Chain. Binance Smart Chain is a network that was developed completely independently from Binance Chain, but works in parallel with it. Binance Smart Chain supports smart contracts, and this is its biggest difference from Binance Chain. Binance also has another product called Binance DEX. As the name suggests, it is Binance’s decentralized exchange. BNB has functions in all these products.
Binance users can pay the fees in their desired cryptocurrency, but if they use BNB for this purpose, they receive a specific amount of discount. Binance has another product called Binance Launchpad that was released in 2019. It is a platform for running ICOs and IEOs, and introducing new digital assets and preselling them. A lot of famous tokens we know today like BTT were first introduced in this platform. Users who want to participate in these events must use BNB to buy the tokens and invest in them.
Besides, like all cryptocurrencies, BNB is a store of value and means of payment. BNB’S price experienced a significant growth in its lifetime, and it established its position as an appropriate store of value. As a means of payment, it’s interesting to know that BNB can be used for reserving hotels in sites like Travala.com, Trip.io, and TravelbyBit. It can be used for paying for online services in sites like BitTorrent, for getting financial services like taking loans in sites like ETHLend, and even for investing in sites like Moeda. As it’s obvious, BNB has a good level of functionality as a means of payment.
BNB is a cryptocurrency and there is no doubt that you need digital wallets for storing it. Trust Wallet is considered the best cryptocurrency wallet for storing BNB since it joined the Binance ecosystem in 2018. It is a software wallet and can be installed on Android and IOS devices. However, Trust Wallet is not the only wallet that can be used for this purpose. Some other wallets you can use to store BNB include:
- Binance Chain Wallet (software – browser extension)
- SafePal (software)
- Ledger (hardware)
- Trezor (hardware)
In this article, we tried to review Binance exchange’s native token called BNB. As you have figured out, this token was first developed to pay for the fees, but its functions extended over time. Maybe at the beginning, a few people believed BNB could reach this position and get listed among world’s largest cryptocurrencies by market cap. A part of this popularity can be related to the popularity of Binance itself, but a large part of it goes back to BNB’s unique functions and features.