Binance Coin(BNB)

Short for ‘Build and Build’, BNB, formerly known as Binance Coin, is the native cryptocurrency of the Binance ecosystem. Launched in mid-2017 through an ICO (Initial Coin Offering) valuing each token at $0.15, BNB was used to raise funds for the marketing and development of the Binance cryptocurrency exchange. Today, Binance Coin (now BNB) facilitates discounted crypto trading on Binance alongside giving holders access to the exchange's launchpad and various other products and services. Whilst Binance Coins were initially released as ERC-20 tokens on the Ethereum blockchain, they were swapped in 2019 to BNB coins on the Binance Chain, which has since merged with the Binance Smart Chain (BSC) to form the BNB Chain.

Founded by Chanpeng Zhao — popularly known as CZ — and Ye Hi, Binance is one of the largest crypto exchanges in the world in terms of daily trading volume. Powering this exchange is an entire ecosystem of offerings such as margin trading, P2P trading, swap farming, crypto derivatives trading, Binance Launchpad, Binance DEX, staking services, liquidity farming, NFT marketplace, and crypto loans. The BNB coin is at the heart of this ecosystem and BNB price has followed the exchange's growth.

BNB price

With Binance’s rapid rise in the crypto industry, its native coin BNB has also witnessed significant value appreciation over the years. However, the increase in BNB USD price was slow in the start, where it remained well under $50 between 2017 and early 2021. Even during the market-wide crypto bull run of 2017-18, BNB's all-time high price was only $24.71 (in January 2018).

However, in the month of May 2021, the entire crypto market witnessed a major uptrend, with many cryptocurrencies registering new all-time highs. Consequently, BNB price rallied from under-$50 to an all-time high of $690.93 on May 10, 2021 (an increase of 460520% from the BNB ICO price). Moreover, BNB’s fully diluted valuation at the time stood at over $100 billion.

How BNB works

BNB can be freely sent between crypto wallets and used as a payment method. Besides powering the Binance ecosystem, BNB is also actively used for payments on various third-party platforms in the travel, entertainment, finance, and services sector. 

The Binance ecosystem comprises two blockchains – BNB Beacon Chain and BNB Smart Chain (BSC) – now recognized as one single entity, the BNB Chain. 

Whilst the BNB Beacon Chain uses the Tendermint Byzantine-Fault-Tolerant (BFT) consensus mechanism, the BNB Smart Chain employs the Delegated Proof of Staked Authority (PoSA) consensus mechanism. The former enables Binance to be 100% involved in the BNB Chain governance, and the latter opens up the network to other validators. 

According to Binance, its network processes over 1,400,000 transactions per second, with a transaction fee of less than 0.10%. That said, Binance continues to control the BSC blockchain by vetting the block validators that it brings on board. This has also attracted criticism with respect to the lack of decentralization.

BNB news, updates and highlights

BNB price is, to a large extent, directly co-related to positive developments in the Binance ecosystem. For example, the value of BNB goes up when news of Binance's expansion plans comes to the fore.

The BNB burn is also a major driver of Binance Coin's price. Recently, in January 2022, Binance completed its 18th token burn, removing 1.68 million BNB coins from the circulating supply — worth roughly $795 million. BNB follows a deflationary mechanism per which a certain number of coins are burnt every quarter to eventually destroy 100 million BNB over a period of time. 

In February 2022, Binance’s two main blockchains were grouped together and called the BNB Chain. With this step, Binance aims to implement the MetaFi concept and build infrastructure that will power the growing new niche of metaverse finance.

Frequently asked questions about BNB

• Can you mine or stake BNB?

You cannot mine BNB as it is pre-mined, but you can stake your BNB holdings to earn staking rewards.

• What are some of the best BNB wallets?

Some of the best BNB wallets include MetaMask, Ledger Nano S, Trust Wallet, Guarda Wallet, Coinomi Wallet and Atomic Wallet.

• What can you do with BNB?

If you have BNB coins, you can use them in multiple ways, both within and outside the Binance ecosystem. You can use BNB within Binance to pay a reduced transaction fee on Binance Exchange, access exclusive token sales on Binance Launchpad, stake BNB and spend BNB worldwide through Binance Visa Card. 

Outside Binance, BNB can be used on multiple third-party platforms.

• How to buy BNB?

You can buy BNB from any well-known exchange platforms like HitBTC, eToro, MEXC, and Nexo. Look out for commonly used trading pairs like BNB/USDT, BNB/BTC, BNB/ETH, BNB/EUR, BNB/USD, or BNB/GBP to execute the exchange.