what is bnb (Binance Coin)?
Binance coin is a cryptocurrency issued by the crypto exchange platform, Binance Exchange, under the trademark BNB. Sounds familiar, right? Crypto enthusiasts must be familiar with BNB. BNB’s market cap currently stands at $42,889,568.053 or ranks fourth in the world of cryptocurrencies after Bitcoin (BTC), Ethereum (ETH), and Tether (USDT).
What makes this coin unique?
History of BNB
BNB was first launched on June 26 to July 3, 2017, on the Ethereum blockchain network. Even though it was first offered in an ICO, BNB does not claim to be an investment or trading product. The developer asserts that BNB is a medium of exchange used for payments, particularly on platforms within the scope of binance such as binance.com, Binance DEX, Binance Chain, as well as applications on top of the Binance Smart Chain.
During the ICO, as much as 10% or 20 million BNB was sold to angel investors, which is the name for investors who finance start-ups at the beginning of their establishment. As much as 40% or 80 million BNB is allocated to the team. The rest, which is 50% of the total supply of BNB or as much as 100 million coins, are released to the market.
The funds raised from this ICO are used to build the Binance platform and cover operational costs. As much as 30% of the total funds were also used to build a brand and market BNB. The strategy proved successful, and 11 days after its initial offering, Binance already had its own platform.
Limited Coin Supply
Now BNB is released in three formats. In addition to ERP-20 on the Ethereum blockchain, BNB is also published in BEP-2 and BEP-20 which are the “native” coins in the Binance chain and binance smart chain. However, the supply of BNB is limited to a maximum of 200 million coins.
What is the reason?
Binance, as the developer of BNB, periodically destroys the supply of BNB to ensure that there is not too much supply. Destruction or what is known as burning is done by Binance every three months by buying BNB worth 20% of the company’s profits. The purchased coins are then destroyed in the blockchain network so that the transaction is transparent. Because this action continues to be carried out regularly, currently the supply of BNB is only 153,432,897 in the world. This amount may continue to shrink to the point of causing a scarcity to keep its valuation valuable.
Use of BNB
Binance claims millions of BNB have been used to finance travel and buy virtual souvenirs. BNB can also be used in loans, as gifts, to create smart contracts, and other transactions. A total of 2 million BNB users use this coin to finance 127 billion trades. The total transaction with BNB to pay this trading fee alone has reached 40 million BNB or 20% of the total BNB supply. Trading that can be financed with BNB takes place on the Binance.com, Binance DEX, and Binance Chain platforms.
Paying trading fees with BNB is quite popular as Binance charges a discount for users who pay fees with BNB. The standard trading fee on Binance is 0.1% which can also be paid with your assets if you are not interested in pursuing fee discounts.
Besides being effectively used to pay trading fees, BNB is also the lifeblood of Binance DEX in the Binance chain. Also, thousands of applications in the Binance Smart Chain (BSC) rely on the BNB token.
Users also stock up on BNB to buy new coins launched via the Binance Launchpad platform. In order to accelerate its market capitalization, Binance is also making collaborations between platforms, smartphone applications, VISA debit cards in Monaco to Asia’s Premier High-End video streaming platform.
Binance Coin (BNB) may not be as famous as Bitcoin or Ethereum. But make no mistake, this crypto asset is said to have interesting prospects in the future along with its various utility functions. The BNB coin is an ERC-20 token that runs on the Ethereum blockchain and was launched in 2017 by Binance Exchange.
BNB is becoming increasingly popular as a trader’s crypto asset of choice. He reflected on the increase in the price of BNB which has continued to occur in recent times. Globally, its users continue to increase as more applications and digital tokens are issued on the binance Smart Chain blockchain. In terms of liquidity it is also high.
There are several advantages when traders and investors decide to choose BNB.
- In terms of transaction fees, BNB is much cheaper than crypto assets like BTC and ETH.
- Blockchain Smart Chain (BSC) has smart contract features that are almost equivalent to smart contracts on the Ethereum blockchain. Smart contracts are a programming tool for creating applications that run on the blockchain.
- BNB transaction processing is also faster than most crypto assets.
However, the prospect of BNB will still be very attractive because BNB has a coin burn feature that will make BNB supply limited when demand is stable or even up. This is different from ETH which does not have this feature, so this burn coin has the potential to push the price of BNB forward. Just so you know, this coin burn feature is carried out every quarter. Meanwhile, the last burn occurred last week, whereas many as 1 million BNB coins or the equivalent of the US $ 595.31 million were burned by Binance.