What is BNB?

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BNB is the native cryptocurrency of both Binance Chain and Binance Smart Chain, and it powers the entire Binance ecosystem. It has multiple important functions:

The Origin of Binance Coin (BNB)

BNB was first launched through an Initial Coin Offering (ICO) that took place from June 26 to July 3, 2017. This event concluded just 11 days before the Binance exchange trading service officially opened. The initial offering price was set at 1 ETH for 2,700 BNB or 1 BTC for 20,000 BNB.

It is crucial to understand that although BNB was launched via an ICO, it does not grant holders any ownership rights or a share of Binance's profits. Therefore, BNB is not considered an investment security in the company.

Originally, BNB was created as an ERC-20 token on the Ethereum network, with a total supply of 200 million tokens. Half of this supply, 100 million BNB, was sold during the ICO. However, the circulating supply today is lower due to a periodic practice known as a "token burn," where Binance uses its treasury to permanently destroy a portion of the tokens. 👉 Learn more about advanced tokenomics strategies

Although it started on Ethereum, the original ERC-20 BNB tokens were eventually swapped for BEP-2 BNB tokens at a 1:1 ratio. This BEP-2 version became the native currency of Binance Chain following the launch of its mainnet on April 18, 2019.

A significant evolution occurred in September 2020 with the launch of the Binance Smart Chain (BSC). This new blockchain operates in parallel to the original Binance Chain. As a result, BNB now exists in three primary forms:

What is BNB Used For?

As highlighted earlier, BNB has a wide array of uses both within the expansive Binance ecosystem and beyond. Your use cases for BNB are versatile. You can spend it on travel expenses, purchase virtual gifts, and much more. Millions of BNB have already been used by people to pay for travel, buy goods and services, lend assets, earn rewards, create smart contracts, and facilitate countless other transactions.

A primary use case is covering transaction fees. On the Binance trading platform alone, approximately two million users have opted to pay their trading fees using BNB, resulting in over 40 million BNB spent across 127 billion trades. Let's explore how using BNB for fees can be advantageous.

When you trade cryptocurrencies on the Binance exchange, a standard trading fee of 0.1% is applied to each transaction (your exact fee tier is determined by your 30-day trading volume and the amount of BNB you hold). You have a choice: you can pay this fee using the cryptocurrency you are trading, or you can pay it with BNB. Choosing to pay with BNB grants you a significant discount.

Therefore, if you are an active trader on Binance, holding and using BNB to cover your fees is a strategic consideration. It's important to note that the trading fee discount follows a specific schedule, so it's best to consult the current Spot Trading Fee Schedule for precise details. Note that Binance Futures operates under a slightly different Fee Schedule.

Beyond trading fee discounts, BNB is also the essential fuel for the Binance DEX (on Binance Chain) and for the hundreds of applications built on the Binance Smart Chain (BSC). This means your BNB has utility far beyond the main exchange. In fact, over 180 cryptocurrencies have been created on BSC, and millions of users have spent BNB as a utility token to interact with the vast array of DApps and services on the network.

Where Can You Buy BNB?

The majority of BNB trading occurs on the secondary market. This means you can easily buy and sell BNB on Binance.com as well as on numerous other major cryptocurrency exchanges.

Frequently Asked Questions

What does BNB stand for?
BNB originally stood for "Binance Coin." However, as its utility expanded far beyond a simple coin for one exchange, Binance has rebranded it to "Build and Build" to reflect its role in powering the entire blockchain ecosystem.

Is BNB a good investment?
BNB is primarily a utility token designed for use within its native ecosystems. Its value is influenced by its utility, adoption rate, and market demand for its various use cases, such as paying fees and participating in projects. Like any cryptocurrency, its price is volatile, and you should conduct thorough research.

How does the BNB burn work?
Binance conducts quarterly "burns," where it permanently destroys a portion of the BNB tokens held in its treasury. This process is designed to reduce the total supply of BNB over time, which can potentially impact its value based on the principles of supply and demand.

What is the difference between BEP-2 and BEP-20?
BEP-2 is the token standard for the original Binance Chain, which is optimized for fast, high-volume trading. BEP-20 is the token standard for the Binance Smart Chain, which is compatible with the Ethereum Virtual Machine (EVM) and is designed for running smart contracts and decentralized applications.

Can I use BNB on other blockchains?
Yes, through a process called "bridging," you can move your BNB between different blockchain networks. For instance, you can bridge BNB from the BNB Smart Chain (BEP-20) to networks like Ethereum or Polygon. Always ensure you are using official and secure bridge protocols.

Do I need BNB to transact on BSC?
Yes, you need a small amount of BNB in your wallet to pay for transaction fees (often called "gas fees") whenever you interact with smart contracts, swap tokens on decentralized exchanges, or perform any other operation on the BNB Smart Chain. 👉 Explore more strategies for managing blockchain fees