BNB stands out among the top ten most capitalized cryptocurrencies as it is the one backed by a major crypto exchange, Binance. In an article we’ll go over how BNB works, why its parent company’s team burns some of the coins on a monthly basis, and whether it is worth buying this cryptocurrency.
What is BNB
Binance Coin (BNB) is the native currency of the major crypto exchange Binance’s ecosystem. Initially, BNB was supposed to be used only inside Binance, but later became more universal.
It has a fixed total supply of 200 000 000 BNB. Half of the supply was sold during the ICO, which took place from June 26 to July 3, 2017. The initial token’s price was 1 ETH per 2,700 BNB or 1 BTC per 20,000 BNB.
How you can use the coin
🔸 To pay commissions on centralized and decentralized Binance’s trading platforms;
🔸 To pay fees on the BNB Chain;
🔸 To participate in token sales on Binance's platform for launching crypto startups, Binance Launchpad;
🔸 To earn money as the liquidity supplier on the Binance Liquid Swap platform;
🔸 To trade;
🔸 To just spend both online and offline.
Advantages BNB owners can get while working on Binance
🔹 -25% on commissions for spot and margin trading;
🔹 -10% on futures trading fees.
BNB on the market
BNB is an indispensable participant in the top 10 most capitalized cryptocurrencies. The token demand is due to the Binance popularity, as well as to the tremendous possibilities of using the coin inside and outside the crypto exchange.
BNB in the top 10 most capitalized cryptocurrencies. Source: CoinMarketCap.
The coin largely relies on market movements. For instance, BNB local lows, just like in the case of market’s flagship cryptocurrency, bitcoin (BTC), took place in the spring and autumn of 2021.
BNB's all time high in $690, according to CoinMarketCap, took place on May 10, 2021. As of November 17, 2022, the coin trades more than twice cheaper and costs $269.
BNB chart. Source: TradingView.
BNB is sensitive to Binance's top managers’ decisions. For instance, it grows on the prospective company’s deals and partnerships. The recent example is BNB’s positive movement after Binance’s investment in Twitter, which took place in October 2022. Crypto exchange plans to use social media as the sandbox for web3 development (an idea for a third iteration of the World Wide Web).
In the top 10 BNB holders, the lead positions belong to Binance itself. Over 20% of the token emission is in a hot wallet, which is used to conduct transactions on a crypto exchange.
Top BNB holders. Source: bscscan.com.
The fourth place in the BNB top wallets is occupied by an unidentified vault. It can be assumed that its owner is the biggest private investor of the cryptocurrency. It has over 4% of the token total supply.
🔥 BNB burnings
BNB operates on a deflationary model based on the token burning mechanism. The process gradually reduces the number of tokens available on the market. A decrease in supply against the cryptocurrency's increasing demand supports its rate.
The crypto exchange team plans to burn half of the total supply that was established at 200,000,000 BNB. The process will be stopped at the moment when the amount of coins drops below 100,000,000 BNB.
An automated quarterly burn program was rolled out in December 2021. Prior to this, since 2017, the Binance team managed the process manually.
As part of the quarterly burn, the crypto exchange also destroys tokens under the BNB Pioneer Burn program. It was launched in September 2020 to help users recover coins that were lost while interacting with the BNB Chain blockchain.
The system calculates the amount of BNB to burn automatically, according to the amount of blocks created during the quarter. All calculations go with the formula B=Nx1000/P+K, which means:
B – amount of BNB to burn.
N – the total number of blocks produced on the BNB Chain during the calendar quarter.
P – an average price of BNB against the US dollar.
K – price anchor, initially set at 1000.
During the last one burning that took place on October 13th, 2022, the system destroyed 2 065 152,42 BNB. The next event, the 22nd, is set for the 4th quarter of 2022. You can follow the BNB burnings via the link.
🔗 BNB standards: ERC-20, BEP-2, and BEP-20
In order to understand the BNB standards, we have to evoke the Binance blockchain evolution process. The company's main blockchain network, called Binance Chain, was launched on April 18, 2019. In September 2020, Binance launched its Ethereum Virtual Machine (EVM) compatible with Binance Smart Chain (BSC). It continued to work in parallel with the Binance Chain.
In February 2022, the developers carried out a rebranding, that turned BNB Chain into a unified ecosystem that includes:
⛓ BNB Beacon Chain (former Binance Chain).
⛓ BNB Smart Chain (former Binance Smart Chain (BSC)).
BNB was originally an ERC-20 Ethereum token. Amid the launch of the BNB Beacon Chain main network, BNB ERC-20 tokens were replaced with BEP-2 standard coins. After the BNB Smart Chain launch, developers rolled out the third BNB standard, called BEP-20.
BNB storage specifics also depend on coin standards. If you register BNB wallet for the first time, use our simple instructions on how to create a BNB (BEP-20) wallet.
Since the beginning of 2022, BNB has lost 37.77% of its price. For comparison, the nearest cryptocurrency’s neighbors inside the top 5 capitalization, Bitcoin and Ethereum, lost 58.38% and 59.77% respectively over the same period of time.
Forbes analysts put BNB in the top 10 best cryptocurrencies to invest in 2022. Experts paid attention to the cryptocurrency’s success in the past and its potential for growth against the Binance development background. According to the market experts, BNB could reach $1,800 by 2030.
Binance cryptocurrency's future largely relies on its parent company’s evolution. That’s why BNB investors should keep an eye on company news. You can subscribe to Binance’s Twitter and to one of its founder Changpeng Zhao. For instance, the crypto community learned about the Central Bank of Kazakhstan’s plan to test the BNB Chain for its own central bank digital currency (CBDC) from CZ’s twitter.
How to buy BNB
There are multiple platforms to buy BNB: you even don't need to have the Binance account. Unfortunately, not all of them offer profitable rates without hidden fees and other pitfalls. Itez is one of the best choices for buying BNB. The time-tested service guarantees transparent prices, low fees, and a favorable exchange rate.
Itez has a European license to operate as a virtual currency exchange platform, a PCI DSS security certificate, and permission to store virtual currencies. You can buy cryptocurrency in itez with a bank card and for a local fiat.
How to get Binance crypto for free
There are multiple ways to get BNB for free. The number one option is to participate in Binance contests. For instance, one took place in April 2022, when the crypto exchange launched a $100,000 BNB giveaway. The money was taken by participants who had the best investment portfolio. You can track contests on Binance.com in the announcements section.
You can also get BNB for free through faucets, services that pay in crypto for simple actions, such as completing captchas. Here are a couple of them:
🔹 Binance Smart Chain Faucet;
Another option is to participate in airdrops and contests with a prize fund in other cryptocurrencies and then convert the prize to BNB. You can buy Binance coins at the best price on Itez.
What can you buy with BNB
There are many ways to spend BNB, including traveling, entertainment, goods and services. For example, cryptocurrency is accepted by the Travala booking service. You can also buy the virtual land in the Decentraland metaverse with BNB or pay for a VPN. A list of services that accept Binance cryptocurrency can be found here.
You can also pay for goods and services with BNB using a Visa Binance Card. The cardholders receive up to 8% cashback in Binance cryptocurrency. Here's how it works:
🔗 The card is linked to the user's exchange account;
💳 At payment time, the system automatically converts the cryptocurrency from the account to local fiat.
You can pay with the Binance Card in more than 60 million stores that accept Visa.
Another way to pay with BNB is through the contactless payment system, Binance Pay. You can use it, for instance, to purchase CryptoRefills crypto gift cards and use them as a payment tool in multiple stores, including IKEA and Adidas.
BNB is one of the most promising cryptocurrencies. Its growth largely relies on the parent company’s evolution. Binance regularly warms-up audience attention to the coin through hype deals, creating its own payment tools, participating in government projects, and developing its ecosystem. The parent company’s activity and success are pros in favor of buying BNB.
Cryptocurrency repeats market movements. It can be assumed that we’ll see BNB during the next crypto bull run. A new rally may begin after the next Bitcoin halving (decrease in mining speed), which is expected to take place in 2024. Usually, halving due to the formation of a shortage of cryptocurrencies in the market pushes the BTC rate to new absolute highs. Bitcoin, in its turn, pushes the entire crypto market, including BNB.
As for now, the Binance cryptocurrency is far from the all-time highs that can be reached during the next bull run. Therefore, the advantages of BNB should make investors consider the coin. And you can make investments in Binance cryptocurrency even more profitable with Itez.
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This article is not an investment recommendation. The financial transactions mentioned in the article are not a guide to action. Itez is not responsible for possible risks. The user should independently conduct an analysis on the basis of which it will be possible to draw conclusions and make decisions about making any operations with cryptocurrency.