What is Binance Coin (BNB): Binance’s large-cap digital currency

Originally on the Ethereum network, BNB now underpins Binance’s powerful virtual ecosystem


With Binance’s rebranding exercise in February 2022, the leading global exchange has sought to streamline its blockchain ecosystem, aligning its services more closely with the large-cap Binance Coin cryptocurrency. As such, now is as good a time as any to delve into the background of the BNB coin.

What is Binance Coin (BNB), and what is Binance Coin used for? You can read Currency.com’s comprehensive guide to the BNB Chain here, where you can learn about both the good and the bad of Binance’s blockchain offering. Continue below for all things BNB coin.

BNB coin: a brief history

Binance Coin (BNB) was first distributed through an initial coin offering (ICO) on Ethereum in July 2017. Half of the 200 million allocation went up for public sale, while an unusually large portion of 50% was kept aside for the founding team and angel investors, albeit vested over a four-year period. The ICO raised $15m.

In April 2019, Binance Coin migrated from Ethereum to the Binance Chain under the newly designed BEP2 standard. The distinction between the Binance Chain and the BNB Chain (previously Binance Smart Chain) is important. The Binance Chain is more akin to Bitcoin, in that it does not support smart contracts. Rather, it is primarily used as a decentralised exchange (DEX) for the trading of cryptocurrencies. 

BNB Chain, on the other hand, is Binance’s smart contract platform, where developers can deploy their own digital assets. To enhance the cross-chain compatibility of the Binance Chain, the BEP3 protocol was implemented in 2020, thus expanding the utility of the Binance Chain DEX.

BNB coin: main uses

So how does Binance Coin work? The utility of BNB has evolved over the years. When it first launched on Ethereum in 2017, it acted similarly to other exchange tokens, giving holders discounts on trading fees, a feature which still exists today. BNB is also used to pay exchange fees

Information on trading discounts for BNB holders – Photo: binance.com
Trading discounts are available to BNB holders – Photo: binance.com

The Binance Coin cryptocurrency acts as a governance token, in which holders can propose and vote on changes to Binance’s virtual ecosystem. Governance proposals primarily relate to BNB’s burn rate, which will be discussed in greater detail below.

With the Binance Launchpool, users can stake BNB to help secure the network. Annual percentage yield (APY) is determined by the size and duration of the stake. The Binance Launchpad, on the other hand, allows users to commit BNB to new token projects, allowing retail investors to support early-stage cryptocurrency projects.

As an exchange of value, Binance Coin (BNB) is supported by a range of online merchants, notably in the play-to-earn gaming space with Decentraland and Axie Infinity. The smartphone company HTC, NOWPayments and Travala.com are other digital merchants that have integrated BNB. 

The introduction of Binance Pay in 2021 gave BNB enhanced utility at the bricks-and-mortar level, although user uptake has not been particularly high since the launch. Alternatively, through the Binance Visa Card, BNB can be used just like fiat. Certain online financial lending platforms including ETHLend and Nexo also support payments with BNB.

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BNB coin’s big burn

As a part of Binance’s commitment to remove 100 million BNB from circulation, the organisation completed its first BNB auto-burn in January 2022, removing 1,684,387 BNB coins (with a value of $906.76m) from circulation.

This was the first BNB coin burn performed automatically, but the 18th quarterly burn in total. That is not the only burning mechanism Binance has in place. BEP95 is BNB’s real-time burning protocol, in which a portion of the gas fees generated through BNB transactions goes towards removing BNB from circulation. So far, 94,102 BNB have been burned via the BEP95 protocol.

Graph of latest burning rate – Photo: binance.com
Burning will cease once circulation drops to 100 million – Photo: binance.com

Binance’s co-founder and chief executive, Changpeng Zhao or simply ‘CZ’, said in a blog post: “The implementation of the BNB Auto-Burn is a natural next step in BNB’s journey and will help the BNB community grow through providing greater autonomy, transparency and predictability.”

You might be wondering why burning BNB tokens is an important process. The answer lies in BNB’s deflationary tokenomics. Unlike Bitcoin (BTC) or Ether (ETH), BNB is fully diluted, meaning that no more BNB coins will ever be minted. Burning is simply another way to control the circulating volume of BNB, ensuring that its value remains competitive for investors. In total, Binance intends to slash BNB’s circulation by half.

BNB statistics: a deeper look

BNB is one of the largest cryptocurrencies in the world by market capitalisation. Its current valuation of $33.22bn puts it behind only BTC, ETH, USD Coin (USDC) and Tether (USDT). The fully diluted coin is valued at $203.92 as of 15 June 2022, with a circulation of 163,276,974. A 24-hour trading volume of $1.635bn equalled more than 4.9% of the coin’s market cap.

Unsurprisingly, Binance is the premier centralised exchange (CEX) for trading BNB. Trading pairs cover the gamut of popular and lesser-known cryptocurrencies. Some of the most popular pairs include USDT, BTC, BUSD, USD, ETH and LUNA. Binance maintains high liquidity across these trading pairs.

Traders in the US should be aware that due to regulatory restrictions, a separate Binance.US platform must be used. UK traders are also restricted from the Binance trading platform, but that may change within the next year.

Here at Currency.com, we offer the BNB/USD and BNB/BTC trading pairs. Other major exchanges holding BNB liquidity include FTX, Gate.io and KuCoin.


The Binance Coin cryptocurrency is fully diluted at 163,276,974. As a deflationary cryptocurrency, BNB’s circulation is set to be reduced to 100 million.

Changpeng Zhao, who goes by the name CZ, is the founder and chief executive of Binance.

Binance Coin is secured through a network of 11 validation nodes. Though secure, this is a highly centralised validation network.

Further reading

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com Bel LLC or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
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