Binance Coin (BNB) can be described as the native digital token of the Binance digital ecosystem. Starting its operation as a cryptocurrency exchange, Binance has grown to expand its offerings through the creation of Binance Coin.
Launched in 2017 through an initial coin offering (ICO), Binance Coin is today the major digital asset on the Binance platform as it serves different purposes, including a digital currency to pay charges for several activities on Binance Coin blockchain (Binance Chain and Binance Smart Chain) and a means of reducing fee on the exchange platform.
As of the time of writing this article, Binance Coin is the largest ERC-based token and ranked third with a market cap of $99 billion.
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Binance Coin History
Binance started its operation in 2017 and within a short time launched an ICO via which Binance Coin tokens are allocated and sold. Binance Coin was originally an ERC-20 token on the Ethereum blockchain before the launch of Binance Chain in 2019, which is a mainnet blockchain with Binance Coin as its coin.
After a while, a token swap took place to have a general change of ERC-20 Binance Coin tokens to Binance Chain-based Binance Coin. As a result, Binance Smart Chain started as Binance’s sister chain in 2020 alongside Binance Chain.
Binance Chain is the original blockchain of the Binance digital ecosystem. It was built with Binance being a decentralized exchange designed to run on Binance Chain. Meanwhile, the functions of this blockchain are limited, thereby birthing the need to have another blockchain.
Binance Smart Chain was launched as an advanced Binance blockchain aimed to offer a variety of features with its Ethereum Virtual Machine functions.
For better understanding, digital assets built on Binance Smart Chain are called BEP-20 tokens while those of Binance Chain are referred to as BEP-2 tokens.
Binance Coin Price
Binance Coin is volatile as its price do. However, some factors affect Binance Coin’s price, considering the extent of usage of the coin and the speculatory nature of the crypto market.
Binance utilizes most of the profits garnered from Binance Coin every quarter. This profit rollover is expected to continue until the maximum Binance Coin supply has a drop from the initial count of 200 million to 100 million.
In compliment, Binance curated an initiative, BNB Pioneer Burn Program, an idea geared at helping some Binance Coin holders who lost their Binance Coin due mistakenly under certain conditions. In some instances, Binance does send Binance Coin to its holders as a replacement for their loss, which will be subsequently be deducted from the next burn of Binance Coin.
Binance Coin is thriving with a huge market volume at an interesting price being led by only Bitcoin and Ethereum. Nevertheless, it is important to come to terms with the fact of the volatility and decentralized nature of this digital token. So, ensure to understand how the crypto market works before trading or investing in it.