BNB Token: Unlock Binance Benefits

Binance is the hub of trading and transactions in the cryptocurrency market. Every crypto person will definitely be familiar with Binance. It is one of the largest cryptocurrency exchanges in the market. And Binance offers its native crypto token, BNB coin for trading and investing.

According to CoinMarketCap, Binance is the largest exchange in 2024 by volume, liquidity and overall score of the platform. The daily trading volume or crypto units trading in a single day on Binance as of August 2024 is 16.094 billion. It is a testament to its stunning user experience and widespread contribution to the crypto ecosystem.

What is a BNB token? Binance Coin (BNB) is a crypto asset from Binance that serves multiple purposes. In simple terms, it is an extension of the functionality of Binance. This article will guide you in many aspects of understanding BNB, including:

• The role of BNB in the Binance ecosystem,
• Binance Smart Chain,
• BNB tokenomics,
• What’s in BNB for investors, day traders and stakeholders?
• The future of BNB token

Continue reading to explore everything you need to get started with Binance Coin.

BNB Token: An Overview

Where most people might think of Binance as a medium to buy, sell, or exchange cryptocurrency, it is more than that. The beauty of decentralized finance (DeFi) is that it is a feature-rich ecosystem for everything. Binance is more than just a crypto exchange.

Binance works as a complete cryptocurrency ecosystem with Smart Chain and other components. Binance Coin (BNB) is the driving force of its ecosystem. BNB is a native cryptocurrency of the Binance environment, created in 2017.

The Initial Coin Offering (ICO) of BNB offered token sales to a wide range of crypto enthusiasts. Binance issued only 50% tokens initially, but given its extensive fame later on, BNB is one of the leading crypto coins in the market.

How Does BNB Token Fuel Binance Ecosystem?

Initially, BNB was launched on ERC-20, which is an Ethereum launchpad. Binance gained traction and became a household brand in the crypto market. Thus, it launched its blockchain, Binance Smart Chain (BSC). We will discuss BSC later in this guide.

The real perks of BNB appeared after it transitioned from ERC-20 to BSC. BNB is a utility token that offers similar and multifaceted benefits to day traders, investors, and crypto people. You can own its assets and earn lucratively via trading it.

However, the benefits of BNB are not limited to trading and investing only. Here is a list of how BNB empowers the ecosystem of Binance:

• Transaction fee payments,
• Token for the governance of the Binance blockchain,
• Passive rewards through staking BNB,
• Discounts on trading fees,
• Your ticket to exclusive services of Binance

Binance Coin Tokenomics

Back in 2017, Binance emerged as an exceptional cryptocurrency platform for traders and investors. It also launched its native crypto token, BNB Crypto. The initial coin offering (ICO) raised around $15 million against 50% of the total BNB supply. The price of one BNB at ICO was 15 cents.

The total BNB supply at that time was 200 million tokens. Since 50% was allocated for the early coin sale, the remaining 50% was distributed among founding members, traders, etc. Here is a list of how the supply was distributed:

• 100 million (50%) – ICO or public sale
• 80 million (40%) – Founding team with around 20% vested every year.
• 20 million (10%) – Angel investors

Explore the best altcoin exchange by reading this article about KuCoin exchange.

BNB Burn – The Ultimate Controlled Supply Technique

BNB is one of a few crypto assets with an incredible deflationary mechanism to keep up with the market fluctuation. Token burn refers to the phenomenon of cutting off a specific supply of crypto assets.

This helps in controlling the inflation that happens due to financial processes. Thus, prices remain high due to low supply and high demand formulas. Token burn is a somewhat similar technique to crypto halving because both share a common purpose.

Binance invests a chunk of its profits to buy BNB tokens every quarter of the year. Then, it burns the owned BNB assets forever. So, this process happens for a total of 4 times in a single year. And this will continue until the total supply reaches 100 million.

Current Supply and Market Performance of BNB

BNB burn mechanism has a positive impact on the market performance of the Binance Coin. Starting from just 0.15 USD, the current price of a single BNB is around $579.45 as of the time of writing. BNB burn is one of the factors in this price hike in a short period of time.

In other words, Binance uses its company funds to raise the value of its product (BNB token) and ultimately makes more money. This is such a cool idea! However, it will also reduce the total supply of this crypto asset.

As of now, CoinMarketCap listed BNB’s total supply, which is 145.935 million tokens. It also has one of the top market capitalization values of $84.504 billion. The future of BNB is bright, promising lucrative rewards and profits to investors.

Binance Ecosystem – An Ultimate DeFi

Decentralized Finance (DeFi) is the dawn of a contemporary financial system with censorship resistance and matchless security. What separates DeFi from traditional finance are three fundamental factors, namely:

1. Unmatched Security,
2. Limitless Scalability,
3. Borderless Interoperability.

Since Binance is a decentralized platform, it incorporates all these features. Thus, users can enjoy a seamless working experience without any hassle. The reason behind this functionality is a complete and one-of-a-kind ecosystem that computes transactions, manages trades and investments, facilitates decentralized apps (dApps), and more.

What comprises the Binance ecosystem? Let’s uncover the top areas that Binance equips its consumers to access.

1. Binance: The Largest Cryptocurrency Exchange

The first thing crypto enthusiasts will need to get started in decentralized finance is a decentralized exchange (DEX). Of course, research and cryptocurrency knowledge can never go unattended. However, after a person is well-equipped with knowledge, they will need a platform to gain trading or investing experience in crypto.

It is when the role of Binance comes in handy. As the top-ranked DEX, Binance is highly popular among DeFi investors due to its classy features, benefits and user-friendly working. It has to compete with some of the high-performing marketplaces, such as Bybit, OKX, Gemini, etc.

Starting trading or investing on Binance is effortless. You will need to register your account and verify it due to Know Your Customer (KYC) compliance. And you are good to go.

2. Binance Coin (BNB): Binance’s Utility Token

The next big thing that started in 2017 alongside the Binance exchange was Binance Coin (BNB). The Chinese crypto enthusiast Changpeng Zhao developed both these innovations and contributed to the excellence in the decentralized landscape.

Binance coin is the most suitable choice for a day trader and long-term investor to plunge into the cryptocurrency market. Technical analysis of the token suggests a positive and reliable performance for this digital asset. Moreover, Binance always keeps up with its competitors. Thus, it joins hands with big brands and companies to level up their business operations.

On top of that, the BNB Burning phenomenon continually adds to the value of BNB tokens. Soon, it will cut through the market barriers and reach an all-time high value. Holding BNB also offers numerous benefits to stakeholders that we will cover in this guide.

3. Binance Chain

A crypto token requires a blockchain network for its existence and ledger. Early during its inception, Binance utilized the Ethereum blockchain’s ERC-20. ERC-20 stands for Ethereum Request for Comment number 20.

This comment number is the standard for developers to mint and create their decentralized tokens on Ethereum Virtual Machine (EVM). Binance also developed BNB using this standard method.

However, it forked Ethereum’s blockchain with some tweaks to come up with a more scalable and more reliable blockchain of its own. Forking in programming means mimicking or making a branch of someone’s program with upgrades. Thus, Binance launched Binance Chain in 2019.

4. Binance Smart Chain

Binance Chain worked as a driving force for the creation of Binance Smart Chain. In September 2020, Binance Smart Chain became the core blockchain technology for BNB and Binance exchange. As an advanced model of the blockchain, Binance Smart Chain (BSC) introduced smart contracts for developers.

BSC helped Binance grow significantly through different factors. For instance, some of the improvements in BSC are high-speed transactions, cost-effectiveness of transactions, and interoperability with Ethereum due to the forking procedure.

Thus, Binance came in direct competition with Ethereum and other big blockchains especially during the DeFi movement. Ethereum fell prey to network congestion and high fees, paving the way for Binance to gain traction among crypto enthusiasts.

TON blockchain is also a high-speed network. Learn more about TON.

5. BNB Smart Chain – An Ecosystem within an Ecosystem

Later in 2022, Binance Smart Chain changed to BNB Smart Chain with added features and services. It introduced designated services for staking, smart contracts, consensus mechanisms, etc. Different layers of the BNB Smart Chain include:

BNB Beacon Chain

Before we discuss Beacon Chain, it is imperative to understand the staking environment of BNB. It uses the Delegated Proof of Staking (PoS) consensus mechanism. This means that a few BNB holders have large amounts of BNB, and they can approve or reject changes to the blockchain.

However, small-scale stakeholders can delegate their funds to those stakeholders and earn corresponding shares of the profit. This entire mechanism comes under the BNB Beacon Chain layer. However, this service will retire as BNB Chain Fusion will occur soon.

BNB Smart Chain

BNB Smart Chain is a powerful and developer-friendly platform for blockchain developers. Due to the use of smart contracts, the development of new applications and decentralized applications (dApps) have become convenient and accessible.

You can join BNB Smart Chain as a validator or partner and start building decentralized products on the go. The top feature of this layer in the Binance ecosystem is its developer-friendly environment that offers 35x capacity for building applications.

On top of that, it supports popular programming languages, such as Solidity, GO, Swift, etc. for high-performance decentralized applications. The vibrant community of Binance develoeprs will facilitate you on every step so that you can contribute the best to the crypto market.

ZkBNB

Binance has extended its services to the web3 architecture with Zero-Knowledge BNB (ZkBNB) scaling layer. Scalability is key to achieving your business goals. Therefore, this infrastructure offers developers and enterprises an opportunity to enjoy scaling in Web3 and Game Finance (GameFi).

Some of the top features of ZkBNB are listed below:

• Lightning-fast transactions
• Minimal gas fees or development fees
• Frictionless integration within dApps for enhanced interoperability

The best thing is that it comes with Layer-2 blockchain security so that you can rest assured without any concerns.

BNB Greenfield

Trusted by leading enterprises and organizations, BNB Greenfield leverages the power of decentralization to nurture data ownership and data economy. When you are building your decentralized application, you already rely on blockchain technology to store your data securely.

Binance allows you to enjoy flexible permission management. It interconnects data permissions and management logic. Thus, you get unparalleled cross-chain migration and transfer of data. Moreover, the high-speed decentralized storage system is another top feature of BNB Greenfield with reliable upload and download speeds.

Ultimately, BNB Greenfield will become the podium for innovation in several top-notch developments. The list includes applications and products built on the BNB Greenfield ecosystem. Such as:

• Aggregata – A decentralized artificial intelligence (AI)
• 4EVERLAND – A web hosting platform
• NFPrompt – A NFT storage with AI-integration
• CodexField – A decentralized code marketplace

Top Use Cases of BNB Token

Binance Coin is a treasure haven for crypto enthusiasts. Investing in BNB opens multiple pathways to enjoying discounts, promotions and convenient payments. Moreover, it is one of the best ways to get into or level up your trading experience.

Why should I invest in BNB tokens? You will be comfortable investing in Binance Coin after reading the following use cases and benefits of this lucrative crypto asset.

1. Crypto Trading

The first and foremost use case of BNB is trading, be it in the spot or futures. As a crypto trader or investor, you will understand that it is a renowned crypto token with a considerable price range.

If you can wait for outstanding profits, spot trading should be your priority. Spot trading BNB offers less risks and more returns, but it may take a while to cash out your investments. On the contrary, futures or leverage trading is a short-term trading game.

You can go to Binance Exchange or any other reliable crypto exchange to buy and trade Binance Coin. Be mindful that plunging into the trading arena without adequate research and knowledge is highly risky for your financial well-being.

2. Ticket to Your Binance Usability

Binance is the hub of crypto-related events and activities. If you want to use and benefit from any one of its services and products, you will need BNB for that. For instance, you can only make transactions on BNB Smart Chain and other platforms with BNB.

However, it is not a requisite for crypto trading on Binance. You can trade or invest in any crypto token using stablecoins, such as Tether (USDT), USD Coin (USDC), and many others. However, almost every trader opts for USDT for trading and exchanging crypto assets.

The best thing about BNB tokens is that you get discounted trading fees (up to 25%) on Binance and its relevant ecosystems if you do that with BNB. In December 2023, BNB Smart Chain managed 32 million transactions in a day. It means that investing in BNB will benefit you in your crypto journey.

3. Payments via BNB

Back in time, it was a dream for every crypto enthusiast to witness cryptocurrency go mainstream. Though it has reached a point of reputation that retailers and companies are accepting cryptocurrency as a payment.

Binance has gone a mile ago in crypto payments via BNB. It has partnered with leading centralized payment gateways and businesses to help consumers and BNB holders exchange their crypto assets with thier desired products and services.

Here is a quick list of payment platforms in the BNB Smart Chain:

• CoinGate
• Pundi X
• Monetha
• HTC
• Coinify

On top of that, Binance Pay allows retailers to accept payments in cryptocurrency. If you own a business or e-commerce store, achieving financial excellence is a single sign-up away with Binance Pay. Binance Pay gives you a wide range of crypto assets to accept as payment for your goods and services.

4. MetaFi

Modern-day decentralized finance operated distinguished due to contemporary innovations. The MetaFi is a combination of Meta and DeFi. It merges the functionalities of Meta and blockchain. BNB Smart Chain has come up with robust applications in many domains, including:

• Metaverse
• GameFi
• DeFi
• Web3
• SocialFi
• Non-fungible tokens (NFTs)

MetaFi is a portal to a profitable and rewarding future for creators and developers. BNB is the crypto token for the BNB MetaFi. It offers governance, validation, transaction, and access to the platform’s features.

5. BNB Staking

Do you have extra funds and want to earn passive income from it? We suggest you BNB staking. BNB Chain Staking is an amazing feature of the network that serves two purposes:

• Enhance security protocols of the network
• Generate passive income through rewards and commissions

Since the consensus mechanism of BNB Smart Chain is delegate PoS, it allows both big and small-scale stakeholders to make passive money by staking their additional crypto assets. When you stake in the network, you also get a chance to become the network validator.

The decentralization of BNB offers consensus opportunity to validators. Holding BNB tokens means that you will be validating and verifying new data on the blockchain. The delegated PoS mechanism is a flair of centralization in the decentralized nature of Binance. This adds to the safety of the blockchain.

6. Crypto Lending

Crypto lending is another top-notch method for passive income through your crypto holdings. Binance Loans is a service that equips crypto enthusiasts with adequate funds to scale up their crypto endeavors.

For instance, you are short on some crypto assets to make your next trade. With Binance Lends, you can access multiple crypto lenders willing to offer you BNB and other crypto assets at low rates. The cool thing is you have no restrictions on the loan. Trade spot, futures, and margin or stake for higher returns.

Binance Loans offer these benefits:

• No fixed repayment time
• No transaction fee
• Access every feature of the Binance exchange
• Enjoy partial liquidation

7. Travel and Entertainment

Binance also simplifies payments for flights, hotel bookings, music rights, and even virtual land. It has partnered with travel and entertainment organizations to accept BNB as a payment for their services.

If you want to pay for travel expenses, you can use the services of the following companies:

• TravelbyBit
• Trip.io
• Travala.com

On the other hand, entertainment companies also offer BNB payments for their services. They are:

• Decentraland
• Loom Network
• VIBE
• Axie Infinity
• AERON
• MachiX

Pros of BNB

• Reduced Trading Fees: Binance offers a huge off on trading cryptocurrency. You can enjoy up to 25% discount on trades, helping you save money to a great extent.
• Exclusive Benefits: BNB provides exclusive perks to BNB holders, such as convenient payments, access to MetaFi, travel with BNB, etc.
• BNB Token Farming: Token farming is similar to crypto staking in one way: it helps you earn passive income. However, you provide other crypto assets with liquidity to farm various cryptocurrencies.
• Binance Launchpad Access: Binance Launchpad is a pool of new tokens where you can invest and earn significant rewards during presales. With BNB holdings, Binance lets you participate in token sales comfortably with additional perks.

Cons of BNB

• Centralization: Due to the delegated PoS consensus, a limited group of validators has the authority to control the blockchain. Thus, the risk of a centralized point of failure exists with Binance and BNB.
• Lawsuits Against Binance: Binance CEO has been sentenced in a lawsuit, which affected the reputation of Binance. It adversely impacted the market performance of BNB.

Conclusion

Binance Coin is a multi-purpose cryptocurrency of Binance. Based on the widespread and feature-rich blockchain of Binance, BNB Smart Chain, BNB crypto is your go-to option for trading, payments, staking, crypto farming, etc.

In the future, Binance will fuse its blockchain services to offer efficient working to its users. This will bring scalability, improve security, and minimize the gas fees for crypto developers.

FAQs

Is BNB coin safe?

Binance introduced the BNB Safe Wallet for the security of users’ assets and information. With Gnosis Safe Protocol, you can rest assured about your crypto holdings.

How do you earn from BNB?

You can earn from BNB in multiple ways. Binance Simple Earn, Binance Launchpool, Binance Megadrop, and BNB trading and investing are some of the top ways to generate revenue from BNB.

What is the ROI on BNB staking?

BNB staking can offer a return ranging from 4% to 11.5% depending on the amount of BNB staked and duration.

Where to buy BNB coins?

Several crypto exchanges have listed BNB. That includes Binance, Coinbase, Gemini, OKX, etc. You will need an account on those exchanges to buy and trade BNB.

Is BNB a good investment?

Binance Coin (BNB) is one of the leading crypto tokens for investments. Its market performance is reliable, making it a profitable investment to make.