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Binance Coin (BNB) is the native coin of Binance, the world’s largest cryptocurrency exchange by volume as well as the native cryptocurrency of Binance Chain.
This guide explains what it is in more detail, how it works, what it’s used for and how it’s developing.
| Icon | Symbol | Initial release date | Algorithm type | Max. supply |
|---|---|---|---|---|
 | BNB | July 2017 | DPOS | ~ 150 million* |
Binance Coin (BNB) is two things: It’s the native cryptocurrency of the Binance cryptocurrency exchange, and it’s the native cryptocurrency of the Binance Chain blockchain.
As an added bonus, it’s also a cryptocurrency that can be spent in physical and online stores around the world.
Binance Coin has two groups of functions: It’s an exchange token, and it’s the native cryptocurrency of the Binance Chain blockchain.
As an exchange token, BNB provides the following functions:
How does the BNB trading fee discount work?
When you hold Binance Coin on the Binance exchange, you can opt to pay trading fees with BNB, regardless of which pair you are trading. When you do, you get a 25% discount on spot and margin fees, and 10% on futures fees, compared to the normal rate.
You can switch the “pay fees with BNB” option on or off in your Binance account settings at any time.
How does BNB unlock higher trading fee volume discounts?
Like many other exchanges, Binance offers discounts for higher-volume traders. But unlike other exchanges, these high-volume traders are also required to hold certain amounts of BNB in their accounts to unlock these discounts.
How does BNB work as a major trading pair?
You can trade Binance Coin against all other listed cryptocurrencies on the Binance exchange. This is similar to how Bitcoin (BTC) and Ethereum (ETH) are major trading coins on most exchanges, making it a versatile cryptocurrency for Binance users that wish to trade.
As the native token of Binance Chain, BNB can be used in the following ways:
Binance Chain is a blockchain launched by Binance in April 2019. Its most distinctive feature is how tightly integrated it is with the Binance DEX and its focus on financial applications.
In order to improve performance, Binance Chain does not support smart contracts.
Binance Chain also has its own token standard. Similar to the way Ethereum has the ERC20 token standard, Binance Chain has a token standard called BEP2.
The point of these standards is to ensure compatibility across an entire multi-token blockchain ecosystem.
Binance Chain is based on a delegated proof of stake (DPOS) consensus mechanism.
In 2020, Binance launched their new blockchain — known as a parallel blockchain — intended to complement the existing Binance Chain infrastructure.
The new protocol, named the Binance Smart Chain (BSC) was developed in response to the growing need for fast, scalable solutions to support decentralised finance applications. As the Binance Chain was not compatible with smart contracts, the BSC was a necessity for Binance to continue their foray into the DeFi ecosystem.
The BSC is EVM (Ethereum Virtual Machine) compatible, meaning that it has cross-chain capabilities, and uses a new type of BNB token, known as a BEP-20 standard. The network uses a proof-of-stake system that supports 21 independent validators running a node.
The rise to prominence of the Binance Smart Chain has largely rendered aspects of the Binance Chain’s BEP-2 coins redundant. The two blockchains work simultaneously, though most new developments are done with the BSC in mind.
The Binance Smart Chain supports a huge number of platforms, including popular decentralised exchanges such as PancakeSwap, 1inch and Venus.
Why is BNB needed to pay gas fees?
Sending transactions or performing other functions on the two Binance blockchains will incur a small gas fee. These fees are paid to the validators who operate nodes, find blocks and process transactions on the Binance Smart/Chain.
These gas fees are required for two reasons.
On most blockchains, these fees must be paid with the blockchain’s native token. But in the case of Binance Chain, these fees can be paid with any valuable cryptocurrency.
But, just like on the Binance exchange, paying your Binance Smart Chain gas fees with BNB instead of another cryptocurrency will net you a 25% discount. This functionality comes thanks to the intrinsic connection between Binance Chain and Binance DEX.
Binance DEX is the decentralised exchange (DEX for short) arm of Binance.
DEXs differentiate themselves from typical exchange platforms by allowing transactions without ever holding user funds.
On a typical exchange, you deposit funds and then use those for trading. On a DEX, you don’t deposit funds and instead just trade directly with other people from your own wallet.
DEXs are generally built directly onto a blockchain, often taking the form of a computer program rather than a concrete legal entity.
But in contrast to most DEXs, which are applications built on top of a blockchain, Binance DEX is baked into the Binance blockchains itself as one of the core functions.
This brings several benefits:
These benefits can give developers on Binance Smart Chain a leg-up on the development of decentralised finance (DeFi) apps.
Binance Coin is naturally an integral part of the DEX. In addition to giving the same trading fee discounts as you’ll find on the centralised exchange, it also acts as one of the few major trading coins available on the DEX – and by extension, the entire Binance blockchain system.
The introduction of the Binance Smart Chain has added extra functionality to the Binance DEX, and has supported the integration of a number of new applications.
At the time of its creation, the total circulating supply of BNB was 200 million. The circulating supply of BNB has been reduced at a rate of 20 million per year over the course of five years, through quarterly “burns” where Binance destroys a portion of its own tokens.
These burns are expected to completed in 2022, after which the total circulating supply will be 100 million BNB.
This assertive deflationary schedule and relatively limited total supply may account for some of Binance Coin’s price action over the years.
Although it’s a relative late-comer to the cryptocurrency space, since it hit the market in mid-2017, Binance Coin has enjoyed a similar price trajectory as heavy hitters like Bitcoin and Ether.
It was initially released at prices of US$0.10 each. Almost exactly two years later, it hit a price of $38 – equivalent to a tidy 38,000% price rise.
Like most other cryptocurrencies it is quite volatile, and has gone through rather extreme peaks and troughs. However, after the cryptocurrency price lull in 2018-19, it has recovered substantially, reaching a new high in May 2021 of $677 USD.
Like other cryptocurrencies, Binance Coin is held in cryptocurrency wallets.
Binance Coin (BNB) can be held on BEP20-compatible wallets. Due to the BSC’s integration with EVM, BEP-20 Binance tokens can be held on Ethereum-based wallets (such as Metamask), though this typically requires come configuration.
Popular options include the following:
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