Binance, a top crypto exchange, has transformed trading and introduced its own token, BNB.
This article is your guide to understanding BNB investment, from its inception to its applications and growth potential.
What is BNB?
So, what exactly is BNB? It's the native token of Binance that acts as a utility token on the exchange. Binance users can use BNB to pay for exclusive offers and lower trading fees.
It's not uncommon for crypto exchanges to have their own coins, with other centralized exchanges such as Kucoin and Crypto.com using $KCS and $CRO as their native coins. However, unlike others, BNB has secured and maintained a spot in the top 10 cryptocurrencies.
History of BNB
BNB was created in 2017 purely as a utility token, but as the Binance ecosystem expanded, so did the demand for BNB. Today, it's a leading cryptocurrency with huge trading volumes across different exchanges.
It was sold at an ICO to interested investors, with angel investors, the founding Binance team, and the general public buying into it. The token went for 15 cents in public, which was quite a steal compared to today's price ($216 at time of writing). After successfully selling 200 million tokens, Binance was ready to start putting BNB to good use.
What is Binance (BNB) Used For?
Binance Coin is majorly used on the Binance exchange to save money on the exchange's products. But, the coin has found use in several non-Binance-related ways too. Let's look at how BNB can be used within and outside the exchange.
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Transactions on Binance Exchange:
Binance traders can save up to 25% on spot trading fees when they pay for their fees with BNB. Although future and margin traders save less, they still save a significant portion of their fees when they use BNB too.
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Listing Fee:
Coins that want to get listed on Binance are required to pay a specific amount known as a listing fee. This fee is usually in BNB and enables Binance to put up the crypto for buying and selling on its exchange.
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Supported Merchants and Payment:
Some merchants accept payment in BNB, such as Alternative Airlines, ExpertOption, and Floki. You can pay for services and products on these platforms with BNB instead of regular cash.
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Trading:
Outside Binance, you can trade BNB through a number of pairs on other cryptocurrency exchanges and make a profit as you would do with other cryptos. Plus, BNB has a lot of liquidity, so trading won't be so difficult.
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NFTs:
BNB is used for purchasing most non-fungible tokens (NFTs) on Binance's NFT marketplace. In fact, some NFTs can only be purchased with BNB, so interested buyers have to buy BNB first.
Pros and Cons of Binance (BNB):
Pros:
1. Utility: BNB is the native token of the Binance exchange. It provides users with discounts on trading fees and a host of Binance products and services.
2 Powers Binance Smart Chain (BSC): BNB powers BSC. This blockchain platform aims to offer fast and low-cost transactions, attracting decentralized applications (DApps) and DeFi projects like PancakeSwap, 1inch, and BabyDogeCoin.
3. Regular Burn Events: Binance quarterly burns a portion of BNB tokens, reducing its total supply, which could benefit investors in the long run.
Cons:
1. Centralization: BNB is heavily reliant on Binance. This means the exchange has a huge say in whatever happens with the coin, defeating the purpose of decentralization in the first place.
2. Usage: BNB mainly benefits anyone who is involved with Binance. Outside its parent exchange, it does not find a lot of utility except in trading and on Binance Smart Chain.
What is BNB Burn?
BNB burning is a process conducted by Binance to reduce the total supply of Binance Coin (BNB) tokens over time. By this, the exchange hopes to create scarcity and increase the value of the remaining tokens. Binance announces a coin-burning event every quarter, where a specific number of BNB tokens will be permanently removed from circulation.
Another way Binance burns BNB is by buying back BNB from the open market. These purchased tokens are then sent to a "burn address" that is forever inaccessible. The details of each burn event are public knowledge, so anyone can check if the exchange truly burnt tokens or is playing mind games.
Should You Invest in Binance (BNB)?
If you want to invest in a growing ecosystem, then BNB is a good place to start. Some crypto experts even point to Binance Coin as the next Ethereum because it supports the second-largest crypto ecosystem in the world: the Binance Smart Chain.
BNB has also been around for some years, and with burn events happening four times a year, the coin will become scarcer.. Combine that with a growing demand for Binance products, and BNB might bring in good profits for your crypto portfolio in some years.
Where to Buy Binance (BNB)?
Obviously, the first place to buy BNB would be Binance. On Binance, you can get BNB for a slightly lower price because it's their native token. You can also buy BNB from Coinbase Wallet, Bybit, and BitPanda.
How to Buy BNB on Binance?
The first step to purchasing BNB on Binance is to create an account by providing your email address or phone number. Once you have an account, choose a payment method that suits your needs. It is recommended to buy a stablecoin such as USDT or BUSD before using it to buy BNB instead of directly purchasing it.
Depending on why you want to buy BNB, you have the option to send it to another wallet or exchange it for trading or investment. Alternatively, you can keep it in your Binance account. If you frequently use Binance, it is advisable to have some BNB available to participate in exclusive Binance events and pay lower fees for trading.
Please be aware that this article is not intended to provide financial advice. Always conduct your research and due diligence before investing in any cryptocurrency project.
