Most centralized crypto exchanges have their native token. Binance is no exception. Their BNB token has many use cases. It powers both the BNB Beacon Chain and BNB Smart Chain. Paying transaction fees with BNB gives you a 25% discount on Spot trading.
What else has the BNB coin to offer? We are going to find out. So, let’s have a look at the BNB coin. The native Binance coin.
#Binance Exchange Instructional Video Competition! 2,000 $BNB in Prizes!#cryptocurrency pic.twitter.com/ZfBOg7b2ZY
— Binance (@binance) December 25, 2017
What is the BNB Coin?
The BNB coin launched in late June 2017 during an ICO. That was just over a week before the Binance exchange opened its doors. It started life as an ERC-20 token. Rates were slightly different in those days and 1 ETH got you 2,700 BNB and 1 BTC was good for 20,000 BNB.
The New York State Department of Financial Services approved the BNB coin. This made the coin regulated in the US.
The total supply of the BNB coin is 200 million. During the ICO, 10% went to Angel investors. These are individuals who financially back up startups. 40% went to the team. That’s no less than 80 million BNB. 100 million were up for grabs in the ICO.
In April 2018 Binance launched the Binance chain mainnet. We also know this chain as the Beacon chain. Now you could swap BNB ERC-20 tokens 1:1 to BEP-2 tokens. In September 2020, they added the Binance Smart Chain. Nowadays, we know this chain as the BNB chain.
As a result, we now have three different BNB tokens.
- ERC-20 on the Ethereum chain.
- BEP-2 on the Beacon chain.
- BEP-20 on the BNB chain.
BNB Coin Use Cases
The BNB coin has many use cases. Let’s have a look at some of them.
- Discount on transactions. — On Spot trades, you receive a 25% discount if you pay the transaction fee with BNB. On Futures trading fees, that is still 10%.
- Payment processing — Merchants can offer BNB as a payment option.
- Booking travel arrangements. — Sites like Travala or TravelbyBit accept BNB.
- Entertainment — Buy virtual gifts or lottery tickets.
- Loans — Binance and other platforms offer loans with BNB as collateral.
- Debit cards — The Binance debit card has BNB as the default crypto payment option.
Source: Binance cards
BNB Burning
Every quarter, Binance buys BNB coins back and burns them. This is in alignment with their whitepaper. They have a burn mechanism in place for this purpose. Binance will continue to do so until there are only 100 million BNB left in circulation. By doing this, the supply remains finite. However, BNB becomes scarce, and its value will rise.
Since July 2022, Binance burnt a total of 38,683,447.66 BNB coins. They did this over 20 BNB coin burn events. That is 19.34% of the 50% they are planning to burn. To clarify, that’s 50% of 200 million BNB coins.
#BNB is burnt every quarter, with the aim of burning around 50% of the initial supply (from 200M to 100M coins).
As of today after the recent 20th quarterly burn, 20% of the original supply has been burnt 🔥 pic.twitter.com/kXmqVp9Fin
— Binance (@binance) July 15, 2022
BNB Passive Income
Currently, there are 3 different ways of earning passive income on Binance with BNB. Two options for locked staking and the BNB Vault.
- You can stake BNB for 120 days and get an 8.99% APR on Binance Earn. On the other hand, if you lock BNB for 60 days, you get a 3.85% APR. The 90- and 30-day locking options are already sold out.
- There’s also the BNB Vault. This is a combination of three different rewards. Saving rewards at 0.35% APR. Launchpool rewards and a combination of other rewards.
- There are also various yield farming options. For example, on the BNB chain, you can join the BNByield farm. You can earn 1.5% up to 5.1% daily ROI. This program also has a 2% referral reward. You can find other farming options for BNB on the BNB chain. For example, PancakeSwap, Venus, or Bearn.
Source: Binance Earn
How Does BNB Coin Compare With Other Exchange Tokens?
If we look at market cap, BNB coin has a clear lead. Second-placed LEO token (Bitfinex) has just 10% of the BNB market cap. BNB is the world’s fifth-ranked token by market cap. That is quite an achievement for an exchange token.
Price wise, BNB also did well. Whoever got in at the ICO and held the coin had a ball. It basically went from zero to the current price of $270. There’s still more growth potential for the BNB coin. Most certainly if we look at the burn mechanism that is in place.
Compared to other exchange tokens, the BNB coin stands out. No other exchange token has so many advantages and use cases. No other exchange token had such a positive price development. BNB also lists the ranking for market cap. Together with the many earning options that BNB offers, it beats all other exchange tokens. Sure, some tokens offer some or similar benefits. However, none can offer the same package that the BNB coin has to offer.
Source: CoinGecko
Conclusion
In general, exchange tokens tend to fare well. They have good use cases and power their respective exchanges. BNB tends to stick with head and shoulders above the rest.
One of its main use cases is the 25% discount on Spot trading transactions. It powers the complete Binance ecosystem.
According to CoinGecko, the current market price for the BNB coin is $279.32. The market cap is $45.5 billion. There are 163 million BNB coins in circulation out of the 165 million max supply.
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Disclaimer
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