Binance coin (BNB)
Table of Contents
What is Binance Coin (BNB)?
Binance Coin (BNB) is a digital currency and the primary transaction method for a group of interconnected services operating under the Binance banner. It is also a governance token that allows holders to express their opinions and vote on important development proposals for the Binance ecosystem.
Binance launched the token in an initial coin offering (ICO) in July 2017, a crowdfunding effort in which blockchain-based projects raise funds by selling cryptocurrencies. The maximum supply of BNB was limited to 200 million tokens at launch, of which only half were available to the public.
The exchange initially developed BNB as an ERC-20 token, the standard for digital currencies based on the Ethereum (ETH) blockchain. However, in April 2019, BNB switched from Ethereum to its own blockchain called Binance Chain, and old BNB tokens were exchanged for new ones at a 1:1 ratio.
Binance coin (BNB) cryptocurrency
The Binance ecosystem includes Binance Exchange, Binance Labs, Launchpad, BNB Smart Chain (BSC), Binance Academy, Binance Research, and Binance Charity.
The BNB cryptocurrency plays a key role in all these platforms, from paying trading fees on the Binance exchange to participating in token sales on the Binance Launchpad to accessing BSC’s decentralized finance (Defi) services.
I am. Binance users with BNB in their account can have fees deducted from their BNB balance and receive significant discounts on transaction costs.
Read also: The Cryptocurrency-Encoded Series of Transactions
Similarly, anyone who wants to participate in a token sale on Binance Launchpad must hold a certain amount of their BNB for a certain period of time before selling. Additionally, using BNB, he can access her BSC-based Defi protocol.
These protocols use BNB for various services such as lending, borrowing, and yield farming, allowing them to earn passive income by providing liquidity to Defi platforms.
BNB uniqueness
BNB’s uniqueness primarily comes from its position as the native token of the Binance ecosystem. This ecosystem plays multiple roles, including capturing early investment opportunities for Binance Launchpad projects and promoting the governance and security of the BNB Smart Chain.
Additionally, BNB has some specific use cases for the Binance exchange, including: B. allows holders to receive discounts on transaction fees and participate in token sales. Additionally, BSC allows you to use Binance Coin to pay only for gas fees.
BNB is also integrated with his BSC, which will allow users to interact with dApps and Defi protocols built on the blockchain. This token also has a strong presence in the market. As of May 10, 2024, BNB’s price was $593.29, giving it a fully diluted valuation of $91,286,192,250, making it the fourth largest cryptocurrency by market capitalization.
BNB’s auto-burn mechanism
Binance Coin is a deflationary token, meaning its developers have designed it to reduce its total supply over time. This is accomplished through a process called autoburn, where Binance essentially buys back a predetermined number of BNB tokens from the market and permanently removes them from circulation.
Through Autoburn, Binance hopes to increase the scarcity of BNB coins and potentially increase the price of BNB coins. This mechanism works as follows:. Every 3 months,
Read also: Wall Street Journal’s Expert Stock Market Predictions
Binance will use a portion of the profits to buy back his BNB from the open market. The exchange then sends these BNB tokens without the private key to an “invalid” address so that no one can access them. This process is carefully managed by Binance, and the exchange will announce on its website and social media channels the exact date of each write event and the amount of BNB destroyed in the process.
This amount is not chosen at random by Binance; rather, it is determined by taking a percentage of the trading fees it received the prior quarter and using that money to buy back BNB tokens.
A certain portion of BNB tokens are taken out of circulation with each auto-burn event, progressively lowering the total supply.
The auto-burn process is verifiable and transparent. Every token burn event is documented by Binance on the BSC blockchain, and anybody can view the burn address and associated transactions on the blockchain explorer.
Total supply of BNB in circulation
As of May 10, 2024, there are $153,856,150 BNB tokens in the market. However, because of BNB’s auto-burn mechanism, the number of tokens circulating in the market and tradeable by the public will continue to drop until it falls below 100 million.
How Binance Coin works
There is no major difference in the mechanism of Binance Coin from other virtual currencies. It is a governance token and the primary means of transactions in its native environment. You can also buy and sell it on cryptocurrency exchanges and store it in BNB-compatible wallets.
Like any other crypto asset, BNB’s price chart experiences troughs and peaks as its value fluctuates depending on demand and usage. BNB operates BNB Chain, an integrated layer 1 blockchain that combines the original Binance Chain (also known as BNB Beacon Chain) and the Binance Smart Chain built in parallel.
Read also: How Bitcoin works [Infographic]
On the new BNB chain, Binance Coin will be renamed “Build N” Build and will be used for gas fees, staking, and voting. To maintain scarcity and potentially impact the BNB crypto price,
Binance regularly conducts token burns by using a portion of the proceeds to buy back and retire BNB coins. These quarterly burns have been in place since 2017 and will continue until half of BNB’s original maximum supply remains.
Where can you buy Binance Coin (BNB)?
You can buy BNB directly from its native crypto exchange, Binance, using a credit card, debit card, or bank transfer.
The token is also listed on several centralized exchanges, such as Coinbase, Kraken, and Huobi. However, you must create an account and verify your identity on these platforms before buying BNB.
Some peer-to-peer platforms and services that directly connect crypto buyers and sellers, such as Binance P2P, also allow users to buy and sell BNB amongst each other using fiat money, gift cards, and more.
You can also buy BNB from decentralized exchanges such as Binance DEX, Uniswap, and PancakeSwap. These platforms allow users to trade crypto without intermediaries or custodians, but you must connect your wallet to them and swap other cryptocurrencies for BNB.
In certain locations, you may find crypto ATMs that allow users to buy and sell an assortment of cryptocurrencies, including BNB.
BNB is secured
BNB is secured through several mechanisms within the Binance ecosystem. It operates on the blockchain, meaning all transactions are recorded transparently and immutably.
Furthermore, BSC uses a variation of the proof-of-stake (PoS) consensus mechanism called proof-of-staked-authority (PoSA). Participants stake BNB to become validators, authenticate transactions, create new blocks, and secure the blockchain and token.
BNB’s auto-burning mechanism also helps secure the token by reducing its total supply over time. It helps maintain scarcity, potentially pushing up the Binance token price.
Read also: World’s Wealthiest Stock Market Investors
Additionally, the token can be stored on multiple secure crypto wallets that employ encryption and assorted security measures, including two-factor authentication (2FA), to protect private keys and ensure that only authorized users can access their BNB tokens.
The Binance ecosystem’s operator also continuously monitors and adits their systems to identify and address potential vulnerabilities and security risks.
Binance offers several derivatives that get their value from BNB. One example is its coin-margined futures contract, which is collateralized and settled in BNB, BTC, or ETH.
Investors can trade BNB-margined contracts, which allow them to earn BNB when their futures position returns a profit.
BNB’s daily trading volume
BNB’sBNB’s current daily trading volume is $1,045,536,887
BNB all-time highs and lows
BNB’s all-time high price is $686.31, attained on May 10, 2021. Since its launch, its lowest level has been $0.0398177, which was reached on October 19, 2017.
Binance-coin-(BNB) [Infographic]
