BNB has launched just over three years ago. It first hit the cryptocurrency market through an initial coin offering (ICO), which took place from June 26 to July 3, 2017. BNB was immediately used as a means of paying transaction fees on the new cryptocurrency exchange Binance.com, launched 11 days after the ICO.
BNB transaction fee payments involve a significant discount for users. The initial token price at the time of the ICO was 1 ETH for 2,700 BNB or 1 BTC for 20,000 BNB, which at the time was about $0.15 per BNB.
In this article, we will trace BNB’s path to the top, talk about its practical value and use cases, and compare BNB to other leading cryptocurrencies.
BNB and its path to the top
At the time of writing, BNB is third in terms of market capitalization, which has reached over $42 billion. Ethereum is in second place, and bitcoin is in the first place. To reach the position of ETH, BNB needs to increase its market capitalization fivefold; to reach BTC, it must grow twentyfold. BNB has a long way ahead of it, but let’s trace the part already passed.
From paying trading commissions on Binance to sending tokens to BSC, the number of transactions in BNB is constantly growing. There were 84 million transactions in March 2021 alone, and the upward trend looks set to continue. How did BNB reach its current level, not even being in the top 5 two months ago?
The usual utility token has evolved into something much more sophisticated. BNB’s original purpose – to serve as a means of payment for reduced trading commissions on Binance – turned out to be just the beginning.
Today, we are dealing with a token with its blockchain and a multitude of uses. The use of BNB is not limited to the Binance ecosystem. Originally deployed on Ethereum as an ERC-20 token, BNB has since managed to move to its new “home”: Binance Chain. Here, as well as in the recently launched Binance Smart Chain, it is used as a native network token.
Millions of Binance.com users use BNB to pay trade and transfer fees, earning passive income from BNB storage as well. BNB is also available for use as collateral for cryptocurrency loans. Users hold BNB for a variety of purposes, and many are likely to make the most of BNB.
Both Binance Chain and Binance Smart Chain have proven extremely popular with developers and users alike. And as the ecosystem of decentralized applications evolves, more and more scenarios for using BNB are emerging.
The large, innovative, and diverse BSC and Defi communities have proven to be major supporters of the token. These external players are becoming important players – merchant payment companies, tour booking platforms, in-game rewards, and virtual gift providers. They all continue to find interesting uses for the token and attract new audiences for BNB.
Binance Chain and Binance Smart Chain.
Both BC and BSC use BNB as a transaction payment gas. BSC has upgraded BNB to a token for staking in the new Proof of Staked Authority (PSA) consensus, working with validators and delegates.
BNB allows hundreds of projects to run on Binance Smart Chain. It can be used in Defi, liquidity pools, trading on DEX, or as payment on NFT trading floors.
Currently, when you use BNB to pay trade commissions on Binance.com and Binance DEX, you are offered a 25% discount (the discount decreases over time). If you’re a trader, use trading bots, or have a cryptocurrency business, you can save thousands of dollars on commissions by using BNB.
At Binance Earn you can use BNB to buy several individual products such as Staking, Launchpool, BNB Vault, or Liquid Swap. These products offer high returns and are a great source of passive income.
The Binance Card is a Visa debit card that allows you to use BNB to pay for purchases, bills, mortgages, and more. You can pay with BNB at more than 40 million merchants worldwide. Get your card today!
Binance Crypto Loans
Arm yourself with BNB as collateral and get quick access to easy-to-use cryptocurrency loans with no hidden fees or costs. You can borrow BTC, ETH, BUSD, USDT and other currencies for 7 to 180 days.
Hundreds of offline and online stores accept BNB as payment for goods or services. You can pay directly from your wallet, your Binance account or your Binance card.
Many gaming sites allow you to use BNB to pay for lottery tickets, participate in sports lotteries or use BNB as a gaming token for live roulette or slot machines.
With BNB you can buy just about anything, including physical real estate. Have you always wanted to buy your dream home for cryptocurrency? Now you can do so with BNB.
BNB and its economic potential
Now that we know where and how to use BNB, let’s look at the perspective of the token. It is important to understand the economic potential of BNB as a utility token. Unlike security tokens (securitized), utility tokens (serviced) do not represent stock in the company or organization that issued them.
Third parties who conduct transactions and accept BNBs affect the value of the token to its users. Owning BNB does not mean owning a stake in Binance. When buying BNB, it is important to understand that you are not actually investing in Binance.
Simply put, the value of a utility token depends on its rarity, sustainability, various uses and other factors.
“In the long term, we hope that BNB will become a native token for many application-specific blockchains. BNB has never been seen as a replacement for Bitcoin or Ethereum. To become a truly massive application, BNB must support billions of transactions per day.
With the BNB Burning Plan, Binance is preventing future inflation of BNB-denominated goods and services caused by increased BNB supply. BNB burns reduce the circulating supply, making BNB more scarce. Through this plan, Binance has burned a total of 29,467,175 BNB held in Binance’s treasury since its inception in 2017.
The scheduled burn makes it easy to check the circulating and maximum future BNB stock, as well as subsequent BNB burns. Deficit value-added assets tend to increase in price over time if demand increases and supply remains tight. Due to the wide variety of BNB use scenarios, limited supply, and massive community support, additional increases in the BNB price can occur.
In other words, changes in the value of BNB are mainly due to two factors: changes in supply due to token burning and changes in demand due to increased use and acceptance of BNB.
The community behind BSC as a driving force
As we said earlier, perhaps the most important factor affecting the price of a service token is its usage. We can hardly call something a service token if there is no place to use it. The above list of uses clearly shows that the utility of a token is enormous and growing. With the recent launch of BSC in September 2020 and its huge growth as the number of BSC users increases, the use of BNB is also guaranteed to grow.
2021 will be another active year of innovation for the blockchain technology behind BSC. With plans for a financial crosschain infrastructure, there will be more opportunities to bridge the gap between DeFi and CeFi (centralized financing). This development lays the groundwork for the growth of an even more diverse BNB community and its adoption.