What is Binance coin?
Binance coin (BNB) is a cryptocurrency created by one of the leading decentralised cryptocurrency exchanges, Binance. BNB acts as an alternative payment method for trades on the Binance exchange.
BNB was initially created as an ERC-20 token on the Ethereum blockchain. Binance Coin (BNB) was launched 11 days before the opening of the Binance Exchange. BNB was released in an Initial Coin Offering, capitalising 100 million tokens out of 200 million. The ICO was completed on July 21, 2017. All BNB tokens were sold out in 20 days, earning approximately $15 million.
After this initial success, Binance exchange evolved and created their own blockchain with BNB as the native currency. BNB can be used to pay trading and withdrawal fees on the Binance exchange. Moreover, you can also trade BNB for other cryptocurrencies.
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Quarterly burn events
To encourage the increase of value for BNB, Binance performs quarterly ‘burns’. To do this, Binance uses 20% of its profits to repurchase and permanently destroy Binance coins. The number of coins ‘burnt’ is calculated from the overall quarterly trading volume of the Binance exchange. This coin burning process is set to continue until 50% of the total supply has been destroyed, amounting to 100 million coins.
Trading Fees
The Binance exchange charges a standard 0.1% trading fee, and you can pay the trading fees using the crypto asset you are trading or BNB. However, if you pay using BNB, you become eligible for special discounts of up to 25% when doing spot, margin or futures trading.
Payment Method
Binance coin was first designed to give discounted trading fees on the Binance exchange, but as it has gained traction, more and more vendors are accepting BNB as their preferred payment. You can now use your BNB to pay for online services, play the lottery, or book your travel accommodation. You can even spend your BNB using your very own Binance Visa card.
