What is BNB?

BNB, originally known as Binance Coin, is the native cryptocurrency of the Binance exchange, launched in July 2017 through an initial coin offering (ICO). Initially created as a utility token for discounted trading fees on the Binance platform, BNB's use cases have significantly expanded. It now serves as a foundational asset within the Binance ecosystem, including the Binance Chain (a blockchain software system developed by Binance and the community) and Binance Smart Chain (BSC), a parallel blockchain that enables smart contract functionality and the development of decentralized applications (DApps). BNB aims to fuel operations across the Binance ecosystem, acting as a medium of exchange, a form of payment, and a utility token for various services.

How is BNB useful?

BNB's utility has evolved far beyond its initial function. It is now integral to a wide array of applications within and outside the Binance ecosystem, including transaction fee payments on the Binance Exchange, participation in token sales on Binance Launchpad, and as a base asset on Binance DEX (decentralized exchange). Moreover, on Binance Smart Chain, BNB is used to pay for transaction fees and gas, and it plays a central role in the emerging DeFi ecosystem, being used for farming, staking, and governance in various BSC-based projects. Its broad utility across multiple platforms and applications provides value to users and contributes to its demand and circulation within the cryptocurrency market.

How does BNB work?

BNB was initially an ERC-20 token on the Ethereum blockchain but migrated to Binance's own blockchain, Binance Chain, in April 2019, becoming the native cryptocurrency of the Binance ecosystem. The introduction of Binance Smart Chain added smart contract functionality and compatibility with the Ethereum Virtual Machine (EVM), making it easy for developers to port their projects over from Ethereum. This dual-chain architecture enables users to experience the fast transaction processing of Binance Chain while accessing the robust DApp and smart contract capabilities of BSC.

BNB uses a deflationary model to manage its supply. Binance commits to using a portion of its profits to purchase back and burn BNB tokens quarterly, reducing the total supply until 50% of the total supply (100 million BNB) is destroyed. This burn mechanism is intended to help stabilize BNB value over time.

Major developments

• Binance Chain and Binance Smart Chain Launch: The launch of Binance Chain and later Binance Smart Chain significantly broadened BNB's utility, allowing it to serve as a foundational asset for DApps, DeFi projects, and other blockchain-based applications.

• Quarterly Token Burns: Binance conducts quarterly burns of BNB, based on trading volume on its platform, to reduce the supply and potentially increase the token's value.

• Expansion of Use Cases: Beyond exchange-related functions, BNB can now be used for travel bookings, entertainment, online services, and even as a payment method with merchants accepting BNB. Its integration into the broader Binance ecosystem, including Binance Academy, Binance Charity, and more, highlights its growing role in the blockchain and crypto space.

• Adoption as a DeFi Asset: On Binance Smart Chain, BNB has become a key asset for DeFi projects, offering users opportunities to engage in staking, farming, lending, and borrowing.

BNB's strategic position within the Binance ecosystem, coupled with its expanding utility and adoption in broader blockchain applications, has cemented its status as one of the top cryptocurrencies by market capitalization.

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