Binance Coin
What is BNB and why is it so popular. Let's examine this further...
BNB is the fifth largest cryptocurrency by market capitalisation. Despite the 2022 crypto winter, BNB has shown to be robust in the altcoin markets. In this post, we dive deeper into this versatile token to learn more about the humble beginning of the BNB coin and what keeps it rolling.
Key takeaways
The Binance Coin, abbreviated BNB, is the cryptocurrency issued by the Binance Exchange and operates on the Binance Chain.
It was first introduced as a utility token for reduced trading fees on the exchange. The currency is presently used for various activities, including travel reservations, online services, and financial transactions.
BNB has risen to become the fifth most valuable coin, having a market capitalisation of $43 billion at the time of writing.
One-fifth of Binance's income is used to repurchase and burn BNB tokens each quarter.
What is BNB?
Binance Coin (BNB) is the cryptocurrency that powers the Binance decentralised exchange (DEX). Binance Exchange is the world's largest cryptocurrency exchange in terms of trading volume. According to the whitepaper, Binance is an abbreviation for ‘Binary Finance’ and provides numerous DeFi services on a user-friendly interface. Users may use the exchange's support services to earn interest or trade cryptocurrencies.
How it began?
Changpeng Zhao, commonly known as CZ in the crypto community, launched Binance in 2017. He is a veteran of both the worlds of traditional Wall Street finance and cryptocurrency and is the founder and CEO of BijieTech, a company that supplies exchange operators with cloud-based exchange solutions. CZ formerly served as the co-founder and CTO of OKCoin and the co-founder of Fusion Systems. Binance funded its initial operation through an ICO, a crowdfunding mechanism where financers received BNB tokens. The team conducted the ICO in three phases from July 1-21, 2017, where, 10% of the total BNB tokens were distributed to initial financers 40% to founders 50% to the various participants through the ICO process.
How is it going?
BNB was first launched on Ethereum, but it was later moved to the Binance Chain, which is optimised for ultra-fast trade. However, because of the inherent limits of blockchain technologies, the chain cannot implement smart contracts. Scalability suffered as a result. To solve this, engineers created the Binance Smart Chain, a new blockchain capable of producing high-performance decentralised apps (dApps). The Binance Smart Chain operates alongside the Binance Chain but supports smart contracts and is Ethereum compatible. The goal was to keep Binance Chain's speed while integrating smart contracts into its ecosystem.
The crypto sector is growing at a breakneck rate. To keep up, Binance Chain and Binance Smart Chain (BSC) merged to become BNB Chain in February 2022 with the aim of providing a more streamlined experience. The objective was to get Metaverse-ready and to allow MetaFi, a Metaverse-DeFi hybrid.
As of July 2022, the BNB Chain was processing close to 4 million daily transactions, triple the amount of Ethereum's all-time high in everyday transactions, but down from a record 16 million plus daily transactions reached on November 25, 2021.
The BNB (previously known as Binance Coin) was eventually rebranded "Build and Build (BNB)." BNB serves as a governance token in addition to powering transactions on the BNB Chain. Owners of BNB have the right to express themselves and are expected to participate in the decentralised governance of the BNB Chain.
BNB coin burning
In contrast to many other protocols, new BNBs are not continuously minted. On the contrary, the number of BNB declines with time as the Binance team burns coins regularly. Cryptocurrency burning is when a fraction of a token is transferred to a wallet with no private key, meaning the tokens are gone for good. Tokens are typically burned to limit supply and boost market value.
There were 200 million BNB tokens at genesis. Notably, Binance uses 20% of profits to repurchase BNB from holders and burn each quarter. This continues until the network repurchases 50% of all BNBs. Eventually, 100 million BNBs will remain in circulation.
Highlights from the most recent burn:
The 20th scheduled quarterly burn was completed on July 13, 2022.
Over 1.9 million BNB tokens worth roughly $405 million were burned
The circulating supply of BNB has decreased to 163 million tokens
How are BNB coins used?
BNB was launched as a utility token for lower trading costs in 2017. However, its applications have now spread to various systems and platforms. It is used to pay transaction fees on Binance.com, Binance DEX, and Binance Chain. Few more uses for BNB are as under:
Make credit card payments
Make travel reservations (on select websites)
Purchase virtual presents
Make financial investments
Provide loans and transfers
Make a charitable contribution
In the short term, we examine the daily chart of the BNB coin and discover the following immediate levels at press time,
CMP: 260.8
Pivot: 242.4
Immediate support: 160.6
Immediate resistance: 301.3
Price action: BNB remains in a downtrend, as indicated by the top trendline. In the short term, there are no signs of a trend reversal. If a bullish candle passes the trend line and is followed by another bullish candle that closes with a higher high, the price will rise until it reaches resistance at 301.3. On the other hand, if the charts show a breakdown with a bearish candle on the lower trendline followed by another bearish candle, the price will fall until it reaches the support level of 160.6.
Remember that cryptocurrencies are very volatile investments and that previous performance is never a guarantee of future outcomes. Any investment decision should be based on risk tolerance, market knowledge, portfolio diversification, and how comfortable you are with losing money. A BNB coin forecast is based on previous data and does not reflect all market situations. Never put more money into something than you can afford to lose.
Where to buy BNB?
BNB is available for trade at multiple cryptocurrency exchanges, including Binance Exchange and Scallop Exchange.
Disclaimer The content on this website is for informational purposes only. You should not construe any such information as financial or other advice. Please do your research before making an investment decision.
Last updated
