Binance Coin is the native token of the major cryptocurrency exchange Binance. Initially used to secure its funding, the coin now supports the operation of the Binance ecosystem.
What Is Binance Coin
Binance Coin (BNB) was launched in China in August 2017. The platform itself experienced a significant rise in popularity over the past months together with the BNB coin. Just like other cryptocurrency exchanges, Binance will match your orders to buy or sell cryptocurrencies with those of other users on its platform in exchange for the relevant fees. As the major characteristics which distinguish one exchange from another are related to the matching engine capacity, fees and the liquidity volume, Binance uses the BNB coin to make the platform more attractive for those who hold it.
|Market Cap||Volume 24h||Circulating Supply||Maximum Supply|
|$34,617,203,554||$58796224000||151703886.00000000 BNB||151703886.00000000 BNB|
Thus, the most important function of the BNB coin is to act as the fuel which powers the services the Binance exchange provides to its customers. First of all, the users on the platform can use it to pay for trading fees at various discounts. In order to be eligible for them, it is sufficient to hold BNB coins in one’s wallet with the exchange. The amount of discount is supposed to decrease over the years, ranging from 50% in the first year of the coin use, followed by 25% in the second and 12.5% in the third year. Even when the discount gets to zero in the fifth year, the coin will continue to be used as a way to manage the fee payment on the Binance platform.
Decreasing discount brings the risk of bringing down the value of the Binance coins. In order to prevent this depreciation and maintain a stable price for the BNB, its creators committed to periodically destroying (or “burning”) some of these coins in order to reduce their total supply until 50% of the total BNB supply (100 million) is burned.
As of September 2018 there are 95 million BNB in circulation. At the same time, the coin’s market capitalization stands at USD 915 million, with the historically highest value being just above USD 2 billion dollars. While Binance coin is closely related to the exchange it runs on, it is being traded on competing exchanges such as CoinSwitch, Lbank, and others.
In addition to facilitating its native network operation, the BNB coin can be used for investing in initial coin offerings (ICOs) which are part of the Binance’s Launchpad program. Upon an ICO’s end, new coins will be instantly listed on Binance to speed up the linking between the platform and ICOs. Moreover, Uplive, a mobile livestreaming platform, supports BNB to buy virtual gifts.
In April 2019, Binance launched the Binance Chain as the public blockchain which is hoped to utilize the platform’s coin to assist with the management of assets on it. Following this, Binance Coin was moved from the Ethereum blockchain to the Binance Chain.