Binance Coin (BNB) is a token native to the Binance exchange. It was created all the way back in 2017. However, the currency became one of the most popular ones in a matter of months — and we are here to tell you exactly why.
BNB: A short guide
BNB’s investment profile is driven by multiple factors. Binance coin initially ran on the Ethereum blockchain with ERC 20 standard; it’s Binance Smart Chain and BEP-20 respectively now and has a strict maximum of 200 million BNB tokens. But first let’s talk about its chain, which has recently emerged as a leading player in the market, a little more.
While Ethereum transaction fees keep hitting record highs, BSC ones keep getting lower and lower. As a result, more and more developers have been able to launch more products since low gas fees continue to attract more and more users from all over the world.
Another reason why BSC continues to stay on top of the game is its transaction speeds. BSC remains one of the fastest smart contract platforms. More than 230 transactions go through every second compared to Ethereum’s 14, making it at least 15 times faster.
What is BNB used for?
The BNB coin was created to serve as a utility token within the Binance exchange. But with time, it spread like wildfire, and the list of its practical uses is still growing. Here are some of the more important ones:
- Paying gas fees. According to the official Binance whitepaper, this includes exchanging, withdrawing, listing and any other fees you could possibly think of.
- You are also able to pay for goods and services through numerous features offered by the Binance exchange.
- Cashing out fiat money by selling BNB.
- Keeping savings in Binance coin via numerous applications on a wide number of platforms.
- Investing and, of course, trading.
- Launching DApps and other types of platforms.
The auto-burn mechanism
The total supply of BNB has decreased since the launch in 2017 due to its auto-burn mechanism that automatically adjusts the amount of BNB to be burned based on the BNB price and the number of blocks generated on BSC during each quarter. This offers greater transparency and predictability to the BNB community.
According to Changpeng Zhao (CZ), co-founder and CEO of Binance, the implementation of the BNB Auto-Burn was a natural next step in BNB’s journey.
The mechanism is supposed to stop when the circulating amount will reach 100 million.
Staking has become one of the most popular methods to earn money with BNB since users are able to stake tokens and earn rewards on them each year rather than just holding the tokens in the wallet.
Binance offers several ways to stake your cryptocurrency. This feature on Binance exchange allows you to earn rewards for staking a specific cryptocurrency for a specific duration. For instance, a coin such as BEL might offer a 15 day staking period with an annualized interest rate of, say, 18%.
According to their official website, Binance also allows users to lock BNB and earn an APY by going to the BNB vault section of the exchange. The APY is determined by the existing earning opportunities on the platform. At its core, the Binance Vault operates more like a yield optimizer that takes funds and invests them in places that offer a guaranteed yield.
Trading and airdropping BNB
Then there is trading. BNB is extremely volatile. Its price has increased by more than 500,000% since its initial launch. The auto-burn feature provides holders with guaranteed earnings.
You can also participate in airdropping, which brands do in order to promote themselves. Airdropping has become a great lucrative opportunity to earn crypto, so anyone who is still not sure how to earn BNB coin should give this a try. Make sure to do your research first!
Binance remains the largest exchange in the world in terms of daily trading volume of cryptocurrencies. And its native token, BNB, is not just a coin — it’s a world of ecosystems and platforms. That includes its own decentralized BNB Trust wallet, Pancake Swap exchange and many investors, such as AAVE and Ontology.
Long-term investment prospects for the BNB token remain bullish thanks to continued strong market demand for Binance to lead it. The overall utility of the BNB token also continues to grow rapidly, with new Binance features. It would be silly to expect this cryptocurrency to fail any time soon. You should definitely consider becoming a part of the BNB world.