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Binance Coin, or BNB, is a native token of the Binance ecosystem and powers the BNB chain ecosystem.

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Binance Coin, now known as BNB coin, began as an ERC-20 standard token built on the 

. It’s a native token of the Binance ecosystem that powers the BNB Chain ecosystem.

 (ICO) as an asset for users of the new exchange to pay fewer trading fees. Within a year, it gave its early investors a whopping 

. Fueled by this blazing performance, Binance Coin's popularity rose quickly to make it a favorite in the crypto market.

This article will cover what BNB coin is, its uses and applications, and if the coin is worth your investment.

BNB coin plays an essential role in the Binance ecosystem by powering operations. Among other things, the coin was designed to pay listing, exchange and trading fees, and any other expenses users incur on the Binance cryptocurrency exchange.

Initially, Binance Coin had a total supply of 200 million tokens. During the Binance ICO, half of the coins (100 million) were allocated to the public, 80 million were set aside for Binance branding, and the remaining 20 million were allotted to angel investors.

Binance Coin was originally issued as an ERC-20 token on the Ethereum blockchain. In 2019, Binance launched its Binance Chain blockchain, now known as BNB Beacon Chain. The 

 BNB coin was introduced as this chain's native token, and users of the old 

–compliant BNB token swapped it for the new token at a 1:1 ratio.

In 2021, the Ethereum blockchain network grappled with congestion from a high volume of traffic, and its gas fees for transactions spiked rapidly. Because of the blockchain’s slow speed, developers faced transaction issues.

Consequently, they switched to the BNB Beacon Chain because of its fast transaction processing and cheaper gas fees. Use of the BNB Beacon Chain increased, and BNB coin gained in popularity.

Since then, Binance’s role has expanded beyond being just a digital asset exchange, and BNB remains an integral part of the Binance ecosystem.

BNB coin fuels transactions on two parallel-running blockchains in the BNB Chain: The BNB Beacon Chain and the Binance Smart Chain (BSC). BNB Beacon Chain is Binance’s first blockchain, focused on staking and governance for BNB holders. BSC is an 

 (EVM)–compatible blockchain that serves as an alternative to the Ethereum network and facilitates the formation of 

 known as proof of staked authority (PoSA) for validating transactions and governing its network. The system combines delegated proof of stake (DPoS) and proof of authority (PoA) consensus algorithms. This means the BNB coin is used in both the Binance Chain and the BSC Chain for transactions and staking, among other actions.

To combat devaluation, Binance runs a BNB Pioneer Burn Program that purchases back-token supplies every quarter and burns BNB. This interval burning seeks to reduce the number of tokens in circulation, and stabilize the token’s price. Binance aims to eventually eliminate half of its circulating BNB tokens (200 million total), which is estimated to take 27 years. The last quarterly BNB burning event took place in October 2022 and burned 2,065,152 BNB tokens, which amounted to $547 million. Unfortunately, this massive burn didn’t significantly impact the BNB coin price; instead, it moved downward in tandem with the broader crypto market.

According to Binance CEO Changpeng Zhao, aka CZ, it will take another five to eight years (instead of 27) to burn the foretold 50% of the supply, thanks to the new auto-burn mechanism.

The use cases for BNB coins continually increase as the BNB Chain expands. Currently, the coin is used to:

For a limited time, when you use BNB coins to pay trading fees in the Binance ecosystem, you’ll receive a significant 25% discount. This is a 

 promotion that’s valid through July 13, 2023.

Apart from the virtual coin’s use in the Binance ecosystem, traders can use BNB for an array of real-world benefits, such as:

Binance has recently partnered with VISA for its Binance 

, which works similar to a debit card. You have to fund the card with BNB coins to make payments (wherever VISA cards are accepted).

Potential Catalysts for Binance Coin Price Increase

Binance’s $500 Million Investment Into Elon Musk’s Twitter Purchase

 to aid Elon Musk in his purchase of Twitter.

CZ stated in an email to crypto-news publisher Decrypt, “We aim to play a role in bringing social media and web3 together in order to broaden the use and adoption of crypto and blockchain technology.” 

When asked about the potential use cases for crypto on Twitter, CZ mentioned that a paid subscription model could be achieved easily. Binance has also confirmed they’re in the midst of creating an internal team to utilize blockchain and crypto to help Twitter fight bot accounts.

This development led to significant speculation about the use cases of crypto on Twitter. The price of BNB coin was impacted by the speculation, rising to a high of $335.14 on October 31, 2022.

Binance announced the launch of a new perpetual contract known as the 

 on November 2, 2022. The index tracks the prices of BNB, 

 (DOGE) and Mask Network (MASK), while allowing up to 25x leverage.

The announcement triggered further speculation, this time about BNB, DOGE and MASK being used for Twitter payments, adding to BNB’s use cases.

Binance Coin Price Prediction: Is BNB a Good Investment?

At the time of its launch, Binance Coin had 200 million tokens in its supply. It currently has a circulating supply of slightly below 160 million BNB coins, and a maximum supply of 200 million BNB coins. The current circulating coin collection is less than the initial supply because of Binance's token burning policy.

and is currently trading at $334.92, as of this writing. BNB coin is the fourth largest cryptocurrency in the world, and its market cap stands at more than $50 billion.

BNB’s price has experienced a maximum drawdown of 51% from May 10, 2021, when the all-time high of $690.93 was achieved. Nonetheless, BNB has been showing steady recovery, with a 64% price increase since June 2022, when it was trading at $196.96.

While the BNB coin generally has a good reputation in the market, a hack on the BNB Chain occurred on October 6, 2022, resulting in the perpetrator making off with $110 million. The chain had to temporarily halt the network, suspending deposits and withdrawals. Fortunately, the issue was handled almost immediately and contained well, preventing the entire chain from collapsing. There was also no significant impact on the BNB price — just a slight decrease in tandem with the broader market. However, the hack has sparked concerns about the network’s centralization issues.

 released by crypto-risk-monitoring firm Solidus Labs found that approximately 12% of all BEP-20 tokens are tied to scams. Since these tokens reside within the BNB ecosystem, there’s a chance the BNB coin will be subjected to spillover effects, which should be taken into account.

BNB’s price briefly broke the $330 support on October 31, 2022. If the price can stay above $330 for a prolonged period, then it can be expected to rally to the next resistance of $380.

Take note that the BNB coin is a high-risk, high-reward investment, so do your due diligence before investing your hard-earned money.

Binance Coin (BNB) can be bought and sold on many crypto exchanges, as it’s a popular coin in the market. With Bybit, you’ll be able to trade BNB either as a derivative or spot —plus, you can stake and earn BNB.

To purchase BNB coins from Bybit, you’ll first need an account with Bybit and relevant documents for KYC verification.

You can sign up with your email ID to create a new account on the Bybit trading platform. If you already have an account, then please sign in.

After you’ve signed in, you need to purchase USDT coins using one of the three methods listed below:

Once you’ve bought your USDT, you’ll be able to trade BNB as a derivative. First, head to the Derivatives section and look for 

. Click on it and you’ll be directed to the trading terminal.

You can also earn BNB staking rewards by 

 with USDT. You’ll be able to earn USDT when its price rises, and earn BNB when its price falls. Either way, you’re earning!

BNB coin has come a long way since its launch as an ICO in 2017. Despite the recent hack and market downturn, its performance has been quite impressive. Binance constantly works on consolidating its market share in the crypto industry and making new innovations. With its investment in Twitter, one can look forward to new use cases for the BNB coin, making it a promising cryptocurrency among many.

What Is Binance Coin (BNB) and Is It Worth Your Investment?

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