Binance Coin (BNB) is an exchange token issued by Binance, and is also the utility token of the Binance Smart Chain. As Binance develops into the top three crypto exchanges in the world in terms of trading volume, along with the endless ecological applications on its smart chain, BNB has become the third largest cryptocurrency after Bitcoin and Ethereum. This article will have a detailed introduction of BNB’s history and the huge Binance ecosystem behind it.

What is BNB?

Binance Coin (BNB) was initially issued by Binance as an exchange token for the payment of transaction fees. As Binance gradually developed into a top exchange, the role of BNB was extended as well, including paying for BSC’s gas fee, purchasing Binance earn products, and even for offline payment and hotel booking. At the time of writing, BNB ranks 5th by market value, and becomes a backbone of the market which cannot be ignored.

The concept and application scenarios of BNB

Concept explanation

BNB was originally an ERC-20 token built on Ethereum, with a public offering on July 26, 2017, issued by Binance through an ICO. The initial circulating supply of BNB was 200 million, with 40% held by the team, 10% by angel investors, and the remaining 50% offered to the public at a price of 0.15 U.

In April 2019, Binance launched the Binance Chain (BC) to develop more decentralized infrastructure and to provide maximum resources and help as a major builder in the ecosystem. As a result, the BNB tokens were converted to BEP-2 tokens on BC at a 1:1 ratio and were used to pay for the on-chain transaction fees on BC and the later launched Binance Smart Chain (BSC).

In terms of total supply, BNB adopts an auto-burn mechanism that will burn BNB every quarter based on the price of BNB and the number generated by blocks on BSC until the total supply drops to 100 million. The burning is transparent and can be viewed on its official website or via the blockchain explorer. As of now, the total supply of BNB is about 161 million.

Current cumulative number of burned BNB. Source: https://www.bnbburn.info/

Application scenarios

With the growth of the Binance ecosystem, the application scenarios of BNB have covered a variety of areas.

Exchange token: The core application of BNB is used as an exchange token of Binance. Users can swap BNB for other tokens, buy BNB earn products, participate in Binance listings, stake BNB for lending and so on, all of these are the original purposes of BNB designed by Binance. Whether for spot trading or margin trading, at least a 25% fee reduction can be enjoyed via BNB while a 10% fee reduction for futures.

Eco-token of Binance Smart Chain: One of the main functions of BNB is that various Dapps and games on the chain need to trade or pay transaction fees through BNB.

Crypto payments: A list of crypto payment providers have accepted BNB, including Pundi X, Monetha, HTC EXODUS, Coin Payments, Coin Gate, Coinfy and NOWPayments.

Traveling: BNB can be used for booking hotels, air tickets and related products on travel platforms such as Travala, Trip.io and TravelbyBit.

Entertainment: BNB can be used for virtual land auction in Decentraland, in-game item purchase in Zombie Battleground, VIBE, Axie, Splinterlands and so on, as well as music copyright token purchase in Machi X.

Services: Mobile data exchange platform DENT, BitTorrent, crypto cashback shopping platform StormX, PureVPN, cloud and web server CenterServ and other service providers support BNB.

Finance: A list of investment and lending platforms are compatible with BNB payments, including ETHLend, LNDR, Nexo, NAGA, Moeda and so on. Users can lend or purchase financial products with BNB.

The investment value of BNB

BNB price, source: https://www.gateio.io/zh/price/bnb-bnb

Since BNB was offered at 0.15 U, it once peaked at 600 U, which was about 4000 times the offering price. Those who bought at the time of its initial offering and held firmly could receive amazing returns. Those who missed the ICO could also be well rewarded by buying at the right point before 2021 and selling after 2021.

The year 2021 witnessed the price surge of BNB which had a lot to do with the rise of Binance Smart Chain (BSC). BSC is compatible with smart contracts and EVM and BNB is paid as the gas fee for transactions and contracts on the BSC chain. BSC’s low gas fee and the efficient transaction had attracted a large number of Defi applications and blockchain games, and BNB, as the ecological token of BSC, also soared greatly in price.

The auto-burn mechanism of BNB determines its deflationary nature, and the supply of BNB will gradually decrease over time, which will increase the value of BNB continually in the future. Almost 40 million BNB tokens have been burned to date, with a total supply of about 161 million. The burning will continue until the total supply of BNB reaches 100 million.

Overall, as the exchange token of a top exchange, BNB outperforms others with a total market cap of $44.366 billion and ranks fifth among all cryptos. Investing in BNB is an effective means to hedge risk without the fear of going to zero, you can also purchase earn products with higher yields on Binance with BNB. Although it’s hardly possible for another BNB bull, it is still a reasonable option in the crypto market.

How to buy BNB?

The entrance for trading BNB on Gate.io

The circulation of BNB is mainly concentrated in the secondary market. To find the trading page of BNB on Gate.io, users can click [Prices] in the navigation bar on homepage and click [Trade] on the right after finding BNB. Or you can enter the page directly via the link: https://www.gateio.io/trade/BNB_USDT.

Trading page of BNB on Gate.io

On the trading page, users can set the desired buying price and amount of BNB.The total amount of USDT to be paid will be automatically calculated. After choosing to buy, the entrusted order will be added into the order book. When the lowest pending price of BNB reaches the buying price, the order will be filled and the corresponding amount of USDT will be converted to BNB.

The hot topics of BNB

BNB was investigated by SEC

On June 7, 2022, Bloomberg reported that the U.S. Securities and Exchange Commission (SEC) was investigating whether BNB was unregistered security when sold in 2017. BNB dropped 9% while its market cap evaporated $4.5 billion following the news. However, Binance insisted that it had been actively communicating with the U.S. government and regulatory authorities while complying with the latest regulatory policies. This incident did cause a brief panic, but fortunately, the market has returned to rationality since then. On the other hand, effective regulation allows cryptocurrencies to grow more healthily, which may be a good thing for investors.

Binance Smart Chain renamed to BNB chain

On February 15, 2022, Binance announced that it renamed its Binance Smart Chain to BNB Chain. The new BNB chain would also integrate the original Binance Chain (BC). The Binance team explained the reason for this rename was that the use of BNB has surpassed the Binance ecosystem, so the new name strengthened its connection with BNB while demonstrating the team’s philosophy of making BNB the core of its development.

Conclusion

Since the release of BNB, Binance has carried out a series of empowerments around it, including Binance IEO, earn products, liquidity mining, BNB Chain, transaction fee reduction and so on. All of these have attracted a large number of loyal users for Binance and further promoted the flourishing development of the entire ecosystem. As Binance co-founder Yi He said: “BNB carries the value flow of the entire ecosystem of Binance.”

The fifth ranking in total market cap reflects investors’ confidence in BNB, which comes from Binance’s endless ecological construction and the importance of BNB in the ecosystem. BNB has a bright future as long as the Binance team keeps developing.