Binance Coin (BNB) emerged as a groundbreaking cryptocurrency, introduced by the Binance team. By September 2024, Binance had solidified its position as the largest crypto exchange globally, boasting a daily trading volume exceeding $10 billion. The platform pioneered a unique business model for its native token, offering users various bonuses and privileges. This innovative approach was later adopted by numerous major crypto exchanges, yet Binance Coin maintained its leadership as the largest exchange-traded cryptocurrency in the market.
The Formative Years: 2017 to 2021
Binance Coin was initially launched in July 2017 as an ERC-20 token on the Ethereum blockchain by Binance, which was a relatively unknown exchange at the time. The timing proved impeccable, coinciding with the first major cryptocurrency rally that began in March 2017.
During this phase, the price of BNB surged from $0.10 to $22.3, marking an impressive 223-fold increase. However, the broader cryptocurrency market experienced a significant correction in January 2018, causing the value of Binance Coin to drop by more than half in just one month, settling at $8.09. Following this decline, the BNB rate began to recover, reaching $17.07 by August 2018, only to enter another correction phase that brought its value down to $4.65 by December.
In 2019, Binance Coin stood out as one of the few cryptocurrencies that demonstrated remarkable growth, achieving a new all-time high (ATH) of $37.17 in June. This surge was largely driven by the launch of its proprietary BNB Chain network, which facilitated the migration of BNB tokens from the Ethereum network. Binance also introduced the BEP-2 standard for token issuance on its blockchain, further enhancing its ecosystem.
After reaching this peak, the BNB cryptocurrency rate began to decline, continuing until March 2020. The onset of the COVID-19 pandemic, officially announced by the World Health Organization (WHO), triggered a brief crash in both stock and cryptocurrency markets. BNB hit a local low of $9.36 during this period, but this downturn was short-lived, soon giving way to a new growth phase.
By February 2021, Binance Coin had reached a new ATH of $294.6. Prior to this, in September 2020, Binance launched another blockchain network called BNB Smart Chain. This new blockchain operated on principles similar to Ethereum and was compatible with its virtual machine (EVM), simplifying the development and integration of decentralized applications (DApps) across both networks. While BNB Smart Chain shared Ethereum's address format and utilized a similar token standard (BEP-20, identical to ERC-20), its key differentiator was the use of the Proof-of-Stake (PoS) consensus mechanism instead of Proof-of-Work (PoW).
The introduction of BNB Smart Chain marked a pivotal moment for Binance Coin, positioning it as a primary competitor to Ethereum. Its appeal grew rapidly due to faster and cheaper transactions, attracting a substantial user base. By September 2024, BNB Smart Chain led in the number of unique addresses created on the blockchain, surpassing Ethereum.
Almost immediately after its launch, the total value locked (TVL) in decentralized protocols on BNB Smart Chain began to soar. In January 2021, TVL stood at a modest $161 million, but by May of the same year, it had skyrocketed to a record $22.35 billion—an increase of over 130 times. Concurrently, the BNB exchange rate achieved a new historical high, reaching $634. Following a prolonged correction that lasted until November 2021, the price of Binance Coin surged to another ATH of $654, fueled by a broader crypto market rally.
Market Correction and Renewed Growth: 2021 to 2024
After the major crypto market downturn in November 2021, the BNB cryptocurrency rate experienced a gradual decline, bottoming out at $206 in October 2023. This represented a drop of more than three times from its previous ATH.
October 2023 heralded the start of another growth phase for the crypto market, driven by positive investor sentiment surrounding the approval of Bitcoin exchange-traded funds (ETFs), which materialized in January 2024. This development marked a new chapter in the evolution of the crypto market. Notably, Binance Coin reached a fresh all-time high during this period, outperforming even market leaders like Bitcoin and Ethereum.
In January 2024, Binance Coin achieved an ATH of $720, cementing its status as one of the fastest-growing cryptocurrencies of the year, alongside Solana and TON. Although it occasionally ceded its position to Solana, as of September 2024, BNB ranked fourth among all cryptocurrencies by capitalization, trailing only BTC, ETH, and USDT. Its market capitalization stood at $74 billion, with an exchange rate of $507.
The Current Landscape and Future Prospects
As of September 2024, BNB Smart Chain ranks among the top four largest ecosystems in the decentralized finance (DeFi) market by total value locked (TVL), which stands at $4.1 billion. Binance Coin boasts one of the most developed and rapidly evolving ecosystems, continuously attracting new projects and innovations.
A testament to its growing influence, Lido Finance, a leading Ethereum-based liquid staking protocol, announced support for the BNB Chain network in August 2024. This integration allows users to transfer their LRT tokens (wstETH) via a dedicated cross-chain bridge, enhancing interoperability and functionality.
For those interested in tracking current exchange rates, you can explore real-time market data to stay updated on the latest movements.
Frequently Asked Questions
What is Binance Coin (BNB)?
Binance Coin is the native cryptocurrency of the Binance ecosystem, initially launched on the Ethereum blockchain and later migrated to its own BNB Chain. It is used for various utilities within the Binance platform, including transaction fee discounts and participation in token sales.
How does BNB Smart Chain differ from Ethereum?
BNB Smart Chain operates on a Proof-of-Stake consensus mechanism, offering faster and cheaper transactions compared to Ethereum's Proof-of-Work model. It is compatible with Ethereum's virtual machine, allowing seamless migration of decentralized applications.
What factors influence the price of BNB?
Key factors include overall market trends, adoption rates of BNB Smart Chain, regulatory developments, and innovations within the Binance ecosystem. Major announcements, such as new partnerships or technological upgrades, also play a significant role.
Can BNB be used for staking?
Yes, BNB can be staked on various platforms within the BNB Smart Chain ecosystem, allowing users to earn rewards through participating in network security and governance.
What is the total supply of BNB?
BNB has a limited supply, with periodic burns conducted by Binance to reduce the total circulating amount, ultimately aiming to cut the supply by half from its original issuance.
How secure is the BNB Smart Chain?
The network employs a Proof-of-Stake consensus mechanism, which is energy-efficient and secured by validators who stake BNB to participate in block production and transaction validation.