Binance Coin (BNB) is a cryptocurrency created by the popular crypto exchange Binance. BNB operates on the Binance Chain blockchain and was launched in July 2017, with its ICO completed in July 2017.
Since its creation, BNB has become an integral part of the Binance ecosystem. It has various use cases and provides many benefits for Binance users when utilized on the exchange platform.
Some of the major utilities and use cases of BNB include:
1 Paying for Fees on Binance Exchange
One of the primary use cases for BNB is to pay for the various fees on the Binance exchange platform.
Binance users who choose to pay for fees in BNB receive discounts on trading fees, withdrawal fees, listing fees and other charges on the platform. Currently, using BNB provides a 25% discount on fees, reducing costs substantially for active traders.
The discount started at 50% in the first year, and halves every year after until it reaches zero in the fifth year. Even without a discount, paying fees in BNB also saves on transaction costs for traders.
This gives BNB fundamental utility and value, as millions of Binance users benefit from lower trading costs by using BNB. The demand creates natural buy pressure for the cryptocurrency.
2 Participating in ICOs on Binance Launchpad
Binance also has its own ICO platform called Binance Launchpad.
Launchpad hosts token sales of various blockchain projects. However, participants can only purchase new token offerings on Launchpad by using BNB.
This gives BNB holders the exclusive ability to access new and potentially lucrative crypto investments through Launchpad. Demand for these offerings is usually extremely high, so using BNB provides a major advantage.
3 Staking BNB
BNB can be staked on the Binance Chain to earn rewards. Users can stake their BNB holdings to validate transactions on Binance Chain and receive staking rewards in return.
Unlike proof-of-work mining, this allows BNB holders to earn passive income just by holding their coins in a supported wallet.
In addition to transaction fees, staking rewards give BNB fundamental value. The annualized reward rate for BNB staking currently varies between 1% and 15% APY based on the total amount staked on the network.
4 Voting Rights and Discounts
BNB also gives holders voting rights and can be used to influence decisions on the Binance exchange.
Users can vote on new listings, delistings, Binance Chain upgrades and more based on their BNB balance. Additionally, reaching certain BNB balance levels unlocks increased discounts on trading fees up to 45%.
5 Payment for Travel Expenses
An interesting real-world application is using BNB to pay for travel expenses. Since 2021, Binance has allowed clients to book 1 million+ hotels worldwide using BNB tokens through their TravelbyBit platform.
BNB can unlock discounts on accommodations, flights, and other travel expenses when paying with BNB. As more merchants adopt BNB payments, this gives the coin utility as a true medium of exchange.
“I've watched the evolution and growth of BNB closely over the past 5 years. What started simply as a token for fee reductions has transformed into so much more. BNB now forms the backbone of the Binance ecosystem. It empowers users and provides advanced functionality that promotes further adoption.”
- Changpeng Zhao (CZ), Founder and CEO of Binance
While BNB started out mainly as a way to pay for fees on Binance, new use cases have expanded its utility and value. As the Binance ecosystem grows, BNB integration is expanding as well.
Some other upcoming uses for BNB include NFT marketplaces, metaverse payments and more. BNB’s integration into Binance’s adjacent platforms like Academy and Research gives the asset utility beyond just trading on the exchange.
Here are some other key benefits and applications of BNB:
- Fast and low-cost payments, thanks to Binance Chain
- Ability to be converted into fiat currencies on Binance’s peer-to-peer platform
- Supporting payments of 200+ cryptocurrencies on Binance Pay
- Facilitating remittances and money transfers though Binance Charity
BNB has one of the largest market capitalizations of any cryptocurrency, currently over $50 billion. An aggregate of nearly 1 million BNB are used daily to pay fees and access other features on Binance.
The Binance ecosystem is the largest player in the crypto industry. With so many users and services under one roof, BNB has fundamental drivers of growth.
As Binance continues expanding, the utility, adoption and value of BNB will likely keep increasing. While risks remain, BNB has solidified itself as a core cryptocurrency used by millions every day.
How does the burning of BNB impact its price?
The burning of BNB refers to when Binance publicly destroys a portion of BNB tokens each quarter. This decreases the overall BNB supply.
The burning initiative was launched in 2017. It aimed to destroy 50% of the total BNB supply, reducing it from 200 million BNB to 100 million. This gradual burning happens on a scheduled basis and is permanent.
The public destruction events reduce circulating supply, meaning each remaining BNB becomes fractionally more scarce. If demand stays the same, basic economics indicate that BNB’s value should increase as supply decreases.
In reality, the BNB burn positively impacts price in a couple key ways:
- Scarcity increases, as each BNB now represents a larger share of total supply
- It signals long-term confidence in BNB from Binance
- Traders may buy ahead of scheduled burns in anticipation of value increasing
While not the only driver of price, BNB burning plays a role in boosting its market value over time. The burning plan lasting until 2030 ensures this will continue being a factor for years to come.
What are some predictions for BNB price in the future?
Given the strong performance of BNB so far, many crypto investors and analysts expect the price to continue increasing into the future. Here are some potential BNB price predictions:
- By late 2023, around $700 per BNB
- Reaching $1,000 per coin within 1-2 years
- Over $2,000 by 2025 based on a 10x rise from current levels
- As high as $5,000 per BNB by 2030
These future prices depend heavily on crypto adoption growing along with Binance’s user base and product offerings.
BNB achieving a dominant status as the native asset of the world’s leading crypto company could propel it to new highs. However, challenges like regulation, security issues or competition could hinder extreme growth.
Realistically, crypto experts see BNB remaining a top 10 or top 5 cryptocurrency for the foreseeable future. The next major price surge may occur if BNB usage and burning keep accelerating. But predicting any crypto’s future value with accuracy remains very difficult.
In summary, Binance Coin has transitioned from a simple trading fee token to a core cryptocurrency used across the Binance ecosystem. Millions rely on BNB for trading, investing, earning, holding, and spending. As blockchain adoption advances, BNB is poised to remain a leading digital asset grounded in real-world utility.