What is BNB?

BNB, also known as Binance Coin, is the native crypto token of the Binance cryptocurrency exchange and associated blockchains such as Binance Chain and Binance Smart Chain.

A brief history of BNB

BNB was initially created as an ERC20 token on the Ethereum network in July 2017, when Binance launched its initial coin offering for the exchange it had built. The crypto token has since moved to Binance Chain as the latter’s native token in 2019. A parallel smart contract blockchain called Binance Smart Chain was created in 2020, also using BNB as its base token.

How BNB works

Binance created BNB with a 200 million BNB token supply, a figure that decreases over time due to quarterly token burns based on the company’s revenues and profits. The company said that this burning mechanism encourages token supply scarcity for the tokens. As it transitioned from an ERC20 token to the native asset on the Binance Smart Chain, BNB also became the basis of payment for the use of the blockchain to make smart contracts and the payment of fees for transactions. Recently, Binance introduced an auto-burn mechanism for its crypto token. Moving away from a quarterly burn schedule.

What is BNB used for?

Binance Coin started as an exchange token, through which people can pay fees for transactions on the Binance exchange, among other activities in the company’s other platforms. Since its transition to being the native token of the Binance Smart Chain, BNB was also used as payment for network fees on the blockchain, similar to ETH for the Ethereum platform.