History of $BNB
$BNB was initially issued as an asset to function within the Binance Exchange. $BNB was launched through an Initial Coin Offering (or ICO) that took place from June 26th to July 3rd, 2017 - 11 days before the Binance Exchange opened for trading. The issue price was 1 $ETH for 2,700 $BNB or 1 $BTC for 20,000 $BNB. Although $BNB was launched through an ICO, $BNB does not provide users with a claim on Binance profits and does not represent an investment in Binance.
$BNB was originally issued as an ERC-20 token, running on the Ethereum network, with a total supply of 200 million coins. 100 million $BNB was offered in the ICO, but the current total supply is lower due to periodic burning events and a real-time burning mechanism.
Following the launch of BNB Beacon Chain (previously Binance Chain) in April 2019, $BNB became the native asset of BNB Beacon Chain. The ERC-20 BNB tokens were later swapped with BEP-2 BNB at a 1:1 ratio.
However, since BNB Beacon Chain doesn’t have enough flexibility – smart contracts in a system optimized for fast trading could significantly congest the network, Binance launched BNB Smart Chain (previously Binance Smart Chain) in September 2020, and $BNB is also used as the native token of BSC. Until February 2022, Binance announced that BNB Beacon Chain and BNB Smart Chain were merged into BNB Chain. Therefore, now $BNB is known as the exchange token for Binance and the native token for BNB Chain.
As an exchange token, $BNB has been used for the following functions:
- Exchange fee discount: since the launch of Binance, transaction fees on the exchange paid in $BNB have been subject to a discount. Initially, $BNB provided a 50% discount on transaction fees, but it was later reduced to 25% as per the original whitepaper.
- Unique participation rights: $BNB can be used for additional services on the exchange, such as participation rights to Launchpad events (IEOs) and tickets for community listing voting rights.
- Quote currency on Binance: $BNB has been used as an asset for trading cryptocurrencies on Binance. It has been one of the first quote assets on the exchange, alongside stablecoins (e.g., $USDT), $BTC, and $ETH.
- Third-party uses: $BNB can be used on multiple platforms and services that are independently run by global companies. Its third-party set of use cases ranges from booking websites to financial services.
As the chain native token, $BNB will run on BNB Chain in the same way as $ETH runs on Ethereum. This means, $BNB is used to
- pay most of the fees on BNB Chain
- pay "fees" to deploy smart contracts
- participate in on-chain governance
Binance is a centralized cryptocurrency exchange that launched on July 14, 2017. Binance was founded by Changpeng Zhao, a developer who had previously created high-frequency trading software. Binance was initially based in China, but later moved its headquarters out of China following the Chinese government's increasing regulation of cryptocurrency.
BNB Chain is comprised of BNB Beacon Chain, BNB Smart Chain (BSC), BNB Sidechain, and BNB ZkRolllup.
- Beacon Chain is a blockchain developed by Binance and its community that operates a decentralized exchange (DEX) for digital assets.
- BNB Smart Chain is an EVM-compatible layer 1 blockchain launched by Binance. It relies on a system of 21 active validators with Proof of Staked Authority (PoSA) consensus.
- BNB Sidechain is a framework for creating sidechains in the BSC (BNB Smart Chain) ecosystem. It is an infrastructure to help developers and node operators build and run their custom blockchains as their internal value system and for a massive number of users while still maintaining a close connection with the BSC.
- BNB ZkRolllup is the ZkRollup solution to scale BSC.