What is Binance Coin (BNB)?

Binance Coin (BNB) was created under the ERC20 standard in 2017 as a utility token of the Binance crypto exchange that allowed traders to quickly conduct transactions and save on commissions. Soon, BNB got its own blockchain. Besides transactions, it is used to store assets, as a means of payment for goods/services, fees for smart contracts, and investments. Also, it is a staking cryptocurrency.

What are the advantages of BNB?

BNB coins provide their owners with a number of advantages. For example, the token easily pairs with all the coins on the Binance platform. In addition, it communicates with the user in many languages. The technology of the platform allows the exchange to carry out trading operations with the highest speed and excellent results, processing up to one and a half million transactions per second.

Besides paying fees on the platform, the coin has found many other applications, which will be discussed later. At the same time, the price of the coin greatly depends on the success and failure of the platform. It has no real assets that support its value, which is inherent for all cryptos.

How did BNB appear?

The success of the Binance exchange largely dictated the need for its own native token, which performs service functions and ensures the smooth operation of the exchange ecosystems. Actually, this is how the BNB coin was born. The coin appeared on August 7, 2017, following the ICO that collected an amount equal to $15 million in cryptocurrency equivalent.

The creator of Binance and BNB, 41-year-old Chinese Changpeng Zhao, is an extraordinary person. In a phenomenally short period of time, even for the cryptocurrency industry, he created his own exchange, brought it to the forefront, and became ultra-rich and famous.

How does it work?

The BNB token operates on a deflationary mechanism. The system regularly burns tokens in order to maintain supply at the original level. The platform itself does not control the burning of coins. Everything happens automatically, in accordance with a previously defined algorithm. Each BNB burn serves as a trigger for the price to rise.

Initially, coins were issued on the Ethereum blockchain (ERC-20 standard). Gradually, BNB tokens are moved to their own blockchain – BNB Chain (almost all tokens of the ERC-20 standard have already been burned and exchanged for cryptos of the new standard).

What is BNB burning?

It is impossible to mine a BNB coin. The developers themselves mined it (that is, it was premined 100%). Most of the coins were sold during the ICO. Another small part was given to investors. This brings us to one interesting feature associated with the coin: every quarter, the creators of the exchange arrange a natural “auto-da-fé” for their own coins, that is, they buy them on the market, spending up to 20% of the profit on this, and “burn” the coins in the “digital flame” (destroy the smart contracts of the Ethereum network). In total, it is expected that the entire limit of coins sold during the initial placement will be burned.

This allows the founder to fight the depreciation of the coins. This practice began with the transition of the BNB cryptocurrency to its own blockchain. Since then, the creator of the exchange has set out to halve the number of coins issued, which is why the BNB coin is growing in price. As a result, the remaining coins will be used as “gas” for the life of the Binance system.

What is the BNB used for?

The coins itself has multiple forms of utility, essentially being the gas that powers the ecosystem. The most well-known use cases include:

• On the Binance platform, BNB may be used to cover any fees.
• One can trade with the coin to earn profit. Futures trading in pairs with BNB is available on top exchanges.
• Professional investors consider BNB as a long-term investment.
• BNB is accepted as a payment method across the web. Holders of the coin can use it to pay for goods, services, flights, hotels, entertainment, and much more.
• Users can use BNB to cover crypto debit and credit card expenses.
• One can also use BNB as collateral on crypto lending platforms to get a loan.

Conclusion 

As far as trading platforms go, Binance is in the lead. Within the Binance ecosystem, BNB is the native cryptocurrency. It is among the foundational projects, alongside Ethereum and Bitcoin. The founder is working hard to get appropriate licenses for the Binance platform to work in as many countries as possible. This in turn will greatly affect the use and value of the coin. 

BNB on CoinDepo

The CoinDepo platform supports BNB as one of the main cryptocurrencies. With CoinDepo, you can safely store your BNB in Compound Interest Accounts and earn from 12% to 18% per annum + compound interest, depending on the type of interest account you choose. Today, without exaggeration, this is the best offer on the market.

You can also borrow other major cryptocurrencies and stablecoins from CoinDepo against your BNB portfolio without opening a collateral account, which is a unique service that has no analogs in the world of digital assets.