What is Binance Coin (BNB)?
Binance Coin, also referred to as BNB, stands as a utility token at the core of the Binance ecosystem, the world’s largest and most influential cryptocurrency exchange. Initially designed to offer trading fee discounts on the Binance platform, Binance coin has since expanded its utility, becoming a significant player in the crypto sphere.
As the native token of the Binance exchange, BNB was originally launched on the Ethereum blockchain utilizing the ERC-20 token standard. However, it later migrated to Binance’s proprietary blockchain, known as BNB Chain. BNB serves multiple purposes, including but not limited to reducing trading fees, participating in token sales via the Binance Launchpad, and interacting with decentralized applications built on the BNB Chain.
Key features of BNB include:
- Trading Fee Discounts: BNB’s primary function includes offering users of the Binance exchange trading fee discounts when they choose to pay with BNB. This incentive is designed to encourage users to both hold and actively use BNB for their trading endeavors.
- Binance Launchpad: BNB frequently serves as a means to engage in token sales on the Binance Launchpad platform. Users have the opportunity to acquire newly issued tokens by utilizing BNB, offering a convenient avenue to explore and invest in emerging projects.
- BNB Chain: BNB functions as the native cryptocurrency of BNB Chain, a blockchain developed by Binance. BNB Chain facilitates smart contracts and decentralized applications, providing developers with the capability to construct applications at reduced fees compared to certain other blockchain networks.
How does Binance Coin work?
BNB operates as a crypto asset, similar to other digital currencies in the market, experiencing fluctuations in value based on user activity and trading. Individuals can store BNB in compatible wallets outside of crypto exchanges and directly transfer the coin to others for various purposes, including payments.
As for purchasing Binance coin, individuals have several options, including Binance’s own crypto exchange. However, it’s essential to conduct thorough research and adhere to relevant jurisdictional regulations.
On a technical level, Binance’s layer-1 blockchain merges to establish the BNB Chain (formerly known as the Binance Smart Chain and the Binance Chain). Binance designed this blockchain to optimize on-chain trading performance, serving as the foundation for Binance’s decentralized exchange (DEX), Binance DEX.
Transactions on the BNB Chain are powered by a blockchain gas token named BNB, representing “Build and Build” (formerly Binance Coin).
The BNB Chain comprises the BNB beacon chain and the BNB Smart Chain. The former focuses on BNB Chain governance, enabling BNB holders to participate in staking and voting. The latter acts as a consensus layer, compatible with the Ethereum Virtual Machine, and incorporates hubs for multi-chains.
