BNB stands for Binance Coin. It is the native token of the Binance cryptocurrency platform. The token is mainly used by users for paying cryptocurrency trading fees on the cryptocurrency exchange. It is a deflationary digital currency. There are around 200 million BNB coins in circulation but Binance will employ a buyback of coins and reduce the number of coins to 100 million.
BNB-The currency of Binance
BNB tokens are somewhat similar to how ether works in the Ethereum blockchain. However, BNB coins are ERC 20 Standard and were developed and launched on the Ethereum mainchain only. BNB tokens were launched after the BNB ICO. Investors purchased BNB tokens against Ethereum. This fund was raised by the company to meet the expenses of Binance cryptocurrency platform.
Binance is the world’s biggest cryptocurrency exchange with a market share of almost 30 percent. In the whitepaper, Binance had provided a detailed explanation of its further plans for BNB tokens.
Binance Coin is a deflationary currency
There were 200 million BNB tokens generated by the Binance team. 50% went to the ICO, 40% to the team and the remaining 10% to investors. BNB tokens would be used by users to pay for services across Binance platforms. Use of BNB tokens was incentivized by providing a discounted fee structure. This discounted fee structure would exist for five years until 2022. Users who use BNB tokens for paying charges on Binance will receive a 50% discount on the fees. This discount would drop to 25% in the next year. It would halve to 12 and then 6.75% in the coming years. Finally, the discount would drop to zero.
The main aim of incentivizing the use of BNB tokens was to raise more capital in the ICO. Also, BNB is a deflationary digital currency whose supply has to reduce from the current 200 million to 100 million within the next few years. Binance would burn the digital tokens that come back to it through payment fees.
The repurchasing plan states that every quarter the company will use 20% of its profits to buy back BNB coins from the open market. This would continue until 50% of the total BNB coins in circulation have not been destroyed. The Binance team will also vest 20% of their reserved holdings every year for the next five years.
Binance Coin has experienced different price increases and decreases. We know the cryptocurrency industry is definitely very volatile. However, we have seen BNB has been in a bear trend against Bitcoin since mid-2019. The main question is whether it will be possible for the virtual currency to recover the bullish trend.
Binance Coin Use Cases
The Binance Coin has a wide range of use cases. It can be used in the Binance cryptocurrency exchange or in many other platforms. When a digital currency is created, the goal is for it to expand and become known. If it expands, it also increases its utility by offering users a wide range of new solutions.
Binance Coin was released to the market to take the Binance ecosystem to the next level. Nowadays, there are several things that can be done with the Binance Coin on Binance. Users can pay trading fees using BNB coins. Moreover, they can also use the digital asset to participate in promotions.
The Binance Chain is also powered by the Binance Coin. This makes it easier for users to use this network. It allows the network to fuel transactions on a daily basis. Compared to other blockchain networks, the Binance ecosystem is very efficient in the way it manages data.
You can also use Binance Coin to pay for goods and services. It is currently accepted in a wide range of shops and stores all over the world. Moreover, several online shops are also using this virtual currency to process payments. Travala, for example, is one of the companies that is working on top of the Binance Chain and using the BNB cryptocurrency.
- It can be used to pay for goods and services
- BNB works as the native asset for the Binance Chain
- It also powers the Binance cryptocurrency debit card
- The virtual currency can be used to pay for fees in the Binance exchange
- Users can also have discounts on Binance
Binance Coin was created in order to make more efficient the entire Binance ecosystem. Users can find on BNB a wide range of use cases that would allow them to enjoy this virtual currency. At the moment, the Binance exchange is allowing users to handle BNB and to use it for a wide range of things.