What is BNB? – Binance Coin Explained for Beginners
BNB, or Binance Coin, is the native cryptocurrency of the Binance ecosystem, created in 2017 by Binance – the world's largest cryptocurrency exchange by trading volume. Originally an ERC-20 token on the Ethereum blockchain, BNB migrated to BNB Chain (formerly Binance Smart Chain), its own proprietary blockchain launched in 2019.
BNB serves multiple purposes within the Binance ecosystem. Users can pay trading fees on Binance Exchange with BNB at a 25% discount, use BNB as gas fees on BNB Chain for DeFi transactions, stake BNB to earn rewards, and use it for travel bookings, financial services, and governance voting on BNB Chain.
BNB Chain uses a Proof of Staked Authority (PoSA) consensus mechanism – a hybrid of Delegated Proof of Stake (dPoS) and Proof of Authority (PoA). This allows BNB Chain to process transactions faster and cheaper than Ethereum, making it popular for DeFi and NFT applications. Validators are selected based on BNB stake amount and reputation.
Key BNB Facts
- Created: July 2017
- Creator: Binance Exchange
- Blockchain: BNB Chain (PoSA)
- Max Supply: 200 Million BNB
- Current Supply: ~140 Million BNB
- Use Cases: Fees, Gas, Staking, DeFi
BNB is more than just an exchange token – it powers an entire blockchain ecosystem with millions of daily active users across DeFi, gaming, and NFT applications.
– priceofbnb.org
How BNB Token Burns Work
Binance conducts quarterly BNB token burns to reduce total supply, which is designed to create deflationary pressure on the token. Since launch, Binance has burned tens of millions of BNB, reducing the total supply from the original 200 million to approximately 140 million today. This ongoing supply reduction is a key bullish factor cited by BNB price analysts.