Binance Coin (BNB)

What Is Binance Coin (BNB)?

Binance Coin (BNB) is the native cryptocurrency of the Binance exchange platform. Originally launched as an ERC-20 token in 2017, BNB has since been moved to its own mainnet.

The official Binance Coin whitepaper lists four main uses for BNB, including but not limited to; exchange fees, withdrawal fees, listing fees, and other fees. Since its launch, the use for BNB has expanded to pay for a variety of goods and services, and it can also be traded on cryptocurrency exchanges for other cryptocurrencies or for fiat currencies such as the US dollar or the euro.

How Does Binance Coin (BNB) Work?

Binance Coin, ticker $BNB, is a utility token built upon the Binance network – surprising! When a user pays fees using BNB on the network, they receive a discount compared to if they had paid using another cryptocurrency, incentivizing the use of BNB.

BNB can also be used to pay for goods and services on the Binance platform and on third-party platforms that accept it as a form of payment such as Nexo which allows users to take a loan out in BNB and Loom which allows users to book accommodations with BNB.

BNB lives on the Binance Smart Chain (BSC), an improved version of the original Binance Chain which added smart contract functionality in 2020. BSC introduced the BEP-20 standard, which is used by a wide array of tokens.

Binance Coin (BNB) Tokenomics

BNB has a “strict” limit of 200M tokens, never to be increased.^[1]BNB Whitepaper – Binance Coin (BNB), Page 7 These tokens were distributed as follows during its ICO; 50% of tokens (100M) for the ICO, 40% (80M) to the founding team, and 10% (20M) to angel investors.^[2]BNB Whitepaper – Allocation, Page 8 The founding team receives 20% of their 80M tokens through a 4-year plan – 16M at ICO and 16M for 4 years following the ICO.

Binance Coin is subject to an auto-burning system that will eventually reduce the total supply to 100M. Binance uses 20% of its quarterly profits to buy back and burn BNB.

Users can also stake BNB to receive interest on their tokens and vote on network changes. The BNB Beacon Chain is where governance of the network takes place and proposals are submitted. Voting power is decided based on the size of a user’s stake of BNB.

Is Binance Coin (BNB) A Safe Investment?

The safety of an investment in Binance Coin (BNB) depends on several factors, including the overall stability of the cryptocurrency market and the performance of the Binance exchange platform. As with any investment, it’s important to consider the potential risks and rewards before deciding. Investing in BNB or any other cryptocurrency carries a high degree of risk, and it’s possible that you could lose some or all of your investment.

Even the biggest exchanges such as FTX are victims of bankruptcy and other factors which may put your funds at risk. Therefore, it is vital to thoroughly research any investment, cryptocurrency or not, prior to making a decision and only investing what you can afford to lose.

Is BNB A Good Long-Term Investment?

The long-term potential of Binance Coin (BNB) as an investment will depend on a number of factors, including the overall performance of the Binance exchange, which depends on the overall health of the cryptocurrency markets. BNB is a well-established token with a well-established exchange, with a strong track record, and a large and active user base, which can provide investors with confidence in the long-term prospects of the token.

Binance Coin (BNB) Frequently Asked Questions

Is Binance Coin A Stablecoin?

Binance Coin (BNB) is not a stablecoin, although there is a Binance USD stablecoin (BUSD) which is pegged 1:1 with the US Dollar.

What If I Lose My BNB?

In eligible cases such as certain lost token scenarios or “honest mistakes”, Binance may reimburse the user for their lost coins. They do this alongside their burning mechanism, where they will count the lost coins as burnt and credit the user BNB.^[3]Binance – Binance Introduces the BNB Pioneer Burn Program, Adjusts BNB Token Burn Mechanics