BNB is one of the largest cryptocurrencies. It began as an ERC-20 token, but when Binance launched its own blockchain, the BNB Chain (later BNB Smart Chain), it became a central part of the Binance Ecosystem.
Since its launch, BNB Coin has been a top 10 cryptocurrency by market cap.
History
BNB was initially launched in 2017 as an ERC-20 token on the Ethereum Blockchain. It took birth in an era when initial coin offerings (ICOs) were becoming instrumental in securing finance in crypto markets. BNB Coin too raised $15 million by offering 100 million BNBs at a price of $0.15. This raised amount was instrumental in financing the development of the BNB Chain.
BNB Coin became instrumental as a native token in the Binance ecosystem, first as a token that was used for exchange fees and rewards on the Binance Exchange, but later became the native token in the subsequent BNB Chain and its successors, the Binance Smart Chain and later, the BNB Smart Chain.
After BNB Chain was launched, Binance did a token swap to replace ERC-20 BNB Coins with BSC 20 tokens, which was the native token standard for the BNB Chain. BNB Coin’s ERC-20 versions still exist today in the Ethereum ecosystem as a major token.
Binance’s first chain was the BNB Chain (as a BEP-2 token), a non-smart-contract chain similar to Bitcoin. However, Binance later replaced it with a parallel chain, Binance Smart Chain, capable of deploying smart contracts for advanced DeFi and dApp functionality.
The parent company, Binance, later merged them together (similar to what happened in Ethereum later), creating the BNB Smart Chain and replacing the BEP-2 token standard with the BEP-20.
Technology
BNB Coin exists on multiple chains, such as BNB Smart Chain (native token as BEP-20 standard), Ethereum (as an ERC-20 token), Base (ERC-20), and several other blockchains.
Usage and Applications
BNB Coin is instrumental in crypto markets in multiple forms: as the native token for BSC and as a key crypto for investors and traders. It also helps users reduce their fees on the Binance Exchange.
Native Token
BNB Coin acts as the native token of the BNB Smart Chain, a mainstream blockchain known for its native support of a wide variety of cryptocurrencies and ultra-low fees. The fee on this chain is paid in BNB Coins.
BNB Coins on this chain exist in its BEP-20 token form, which was specially developed for it.
DeFi
According to DeFi Llama and several other DeFi analytics platforms, the BNB Chain accounts for a major share of the DeFi markets.
The huge market presence is owed to its market cap, which always remains in the top 10, mostly in the 3rd to 5th position.
Binance Exchange
BNB was created to act as a fee reducer for Binance users. Those who hold or stake BNB have to pay a lower fee on the Binance exchange. Since it is not consumed during trading or investing in the exchange, users can always sell it later, benefiting twice from the same purchase.
Pros
Highly Liquid
With around $100 billion in market cap and several billion dollars worth of daily trading, the BNB Coin offers a highly liquid trading experience, which means your slippage remains less than 1% in most trades.
Staking Benefits
BNB Coin is the easiest coin to stake. Any user with a Binance account can stake BNB on the exchange, which also offers one of the highest rates among safer staking platforms. Alternatively, several DeFi staking protocols offer high staking rewards for BNB Coin.
Native Token in BNB Chain
As a key pillar of the Binance Ecosystem, with use across Binance Exchange, BNB Smart Chain, and several key wallets, BNB remains in high demand.
Fully Diluted Supply
The BNB Coin has a total supply of 131.51 million tokens, of which 100 million were tokens from the initial ICO.
The coin has its total 100% supply in circulation which means there would be no price dilution due to supply shocks caused by token unlocks.
Cons
Relies on a Centralized Blockchain
The BNB Smart Chain remains highly centralized, with only 21 main validators and 45 candidate validators. Binance does this to keep BNB transaction fees lower than on most other blockchains. However, it also raises several security risks.
Frequently Asked Questions
1. Is BNB an ERC-20 token?
Natively, BNB Coin exists as a BEP-20 standard token on the BNB Smart Chain, but a significant portion of the total circulating supply also exists as an ERC-20 token in the Ethereum ecosystem.
2. What is BNB Coin’s native blockchain?
BNB Coin’s native blockchain is BNB Smart Chain, although it is often misquoted that Ethereum is its native chain. The misinformation arises because BNB Coin was first launched as an ERC-20 token in 2017. However, later, when Binance’s BNB Chain was created, a token swap was executed in 2021 to swap the old BNB Coins with their newer version.