What is Binance Coin (BNB)
The cryptocurrency and blockchain industry includes numerous projects and assets aimed at different goals. It is not uncommon to see projects aimed at solving similar needs.
Several crypto exchanges exist, for example. Although each exchange may vary in construction and features, they aim to give crypto traders a place to swap their assets in a broader sense. Sometimes, a cryptocurrency exchange may have its own asset that is used for certain purposes on its related exchange such as fee discounts on the trading platform.
Binance Coin (BNB) of the Binance exchange is one such crypto exchange asset. What is a Binance Coin? BNB began as an asset sold in Binance’s initial coin offering (ICO), becoming a way for Binance exchange users could pay less trading fees on the platform once the exchange launched.
What is Binance Coin
Binance Coin (BNB) is a cryptocurrency created by the Binance exchange, one of the largest cryptocurrency exchanges in the world. Binance Coin is used as a utility token on the Binance exchange, allowing users to trade cryptocurrencies, pay transaction fees, and access other services provided by the exchange at discounted rates.
In addition to its utility on the Binance exchange, Binance Coin has also been used to fund various blockchain-related projects through Binance’s incubator program, Binance Launchpad. Binance Coin has also been integrated into various other platforms and services, allowing users to use BNB for a range of different purposes beyond just trading on the Binance exchange.
Binance Coin is an ERC-20 token, which means it was created using the Ethereum blockchain. However, Binance has since launched its own blockchain, Binance Chain, and has transitioned Binance Coin over to that blockchain as well.
Understanding Binance Coin (BNB)
Binance coin initially ran on the Ethereum blockchain with ERC 20 standard but has since become the native coin of the Binance chain. It was launched during an initial coin offering (ICO) in July 2017 and has a strict maximum of 200 million BNB tokens. It offered 10%, or 20 million, BNB tokens to angel investors, 40%, or 80 million, tokens to the founding team, and the remaining 50%, or 100 million, to the various participants through the ICO process.
Almost half the funds raised during the ICO process were intended to be used for Binance branding and marketing, while around one-third were used to build the Binance platform and perform necessary upgrades to the Binance ecosystem.
How does Binance Coin work?
BNB is a crypto asset similar to other digital assets on the market in that it rises and falls in value as people use and trade it. People can hold BNB in compatible wallets off crypto exchanges and send the coin directly to others for payments or otherwise.
One might also wonder how to buy Binance Coin. People can buy BNB via a number of avenues such as Binance’s own crypto exchange, example. As always, though, be sure to research and abide by any applicable jurisdictional laws.
On a more technical level, the layer-1 blockchain of Binance is merged to form the BNB Chain (previously the Binance Smart Chain and the Binance Chain).
When constructing the BNB chain, Binance tailored the blockchain for optimal performance when it came to trading on-chain, basing Binance DEX, Binance’s decentralized exchange (DEX), on this newly formed chain. Moreover, BNB chain transactions are fueled by a blockchain gas token called BNB, which stands for “Build and Build” (previously known as Binance Coin).
How to buy BNB
As you’d expect, the most popular places to buy BNB are the two Binance exchanges:
While Binance is the default option, it’s not available in the U.S., where you need to use Binance. The US. Despite its size, most other U.S. exchanges don’t offer BNB because it’s the cryptocurrency of a major competitor.
BNB rocketed up the charts in 2021 and became the fourth-largest cryptocurrency. If you decide to invest, be prepared for volatility, including weekly price swings. Like any crypto investment, it’s best to take a long-term approach and commit to holding any BNB you buy for at least five years.
How Is Binance Coin Used?
The use cases for BNB coins continually increase as the BNB Chain expands. Currently, the coin is used to:
- Lend on DeFi protocols, such as
- Exchange on DEXs, such as
- Play crypto games
- Trade NFTs
- Participate in token sales
- Stake to earn rewards
- Pay for transaction fees
Apart from the virtual coin’s use in the Binance ecosystem, traders can use BNB for an array of real-world benefits, such as:
- Credit card payments
- Buying virtual assets
Binance has recently partnered with VISA for its Binance crypto card, which works similarly to a debit card. You have to fund the card with BNB coins to make payments.
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