Cryptocurrency exchanges are built to serve market participants. It facilitates traders with a platform to swap their crypto assets. Each exchange is designed in a specialized manner and has features that are unique to them, apart from the standard trading tools.
Some crypto exchanges may have their native asset that is used for specific purposes within the platform, such as for paying fees for trades and availing discounts.
Binance Coin (BNB) is one such token that is also the native asset of Binance, the world’s largest cryptocurrency exchange by trading volume.
BNB began life as a token sold via the exchange’s initial coin offering (ICO). It became a way for users to trade crypto on Binance once the platform was launched in 2017.
Today we are going to delve deeper into the project to help you understand what the Binance Coin is all about.
This article will explore what BNB is, how it works, its future price prospects, and finally determine whether it is a good cryptocurrency investment.
What is Binance Coin?
Binance Coin was initially deployed on the Ethereum network as an ERC-20 standard token but has since become the native cryptocurrency of Binance Chain – the native blockchain of Binance.
It was launched in an ICO in July 2017 and has a maximum capped supply of 200 million tokens.
Out of this, 10% or 20 million BNB was allocated to angel investors, 40% or 80 million BNB to the founding team, and the remaining 50% or 100 million tokens to the various participants of its development.
Almost half of the funds raised through the ICO process were used for the branding and marketing of Binance.
Meanwhile, around one-third were used to build the Binance exchange and perform necessary upgrades to the ecosystem.
How Does Binance Coin Work?
Binance Coin was created as a utility token for discounted trading fees on the Binance exchange. It is similar to any other cryptocurrency in terms of the way people use and trade it.
Over the years, BNB has evolved and expanded its use cases to numerous applications on a wide range of crypto platforms.
The token is widely used for paying transaction fees on Binance, Binance DEX, and Binance Chain.
BNB can also be used for payments on other exchanges, including Crypto.com, Monetha, and HTC, to book travels on sites such as TravelbyBit, Trip.io, and Travala.com, for entertainment purposes like getting virtual gifts, card packs, and lotteries, to pay for online services on BitTorrent, Canva, and Storm, and for financial purposes like taking out loans from ETHLend or investing on Moeda.
Binance Coin can also be used to invest in ICOs that are listed through Binance’s Launchpad program.
Binance Coin (BNB) Coin Burning
Binance uses a portion of its revenue to buy back BNB tokens, with the intent of eliminating them from circulation and protecting their value.
The exchange has been continuously performing quarterly BNB burns since 2017.
Every quarter, Binance uses one-fifth of its profits to repurchase and burn Binance Coins held in its treasury. The platform will continue burning the tokens until it has purchased and destroyed 100 million BNB.
Binance also employs something called the BNB Pioneer Burn Program, which considers certain scenarios when BNB holders unrecoverably lose their tokens, and repay them, later deducting the amount from the next BNB burn.
Binance Coin (BNB) Use Cases
BNB can be used by Binance users to pay for transactions on the exchange. Binance customers are charged less on the exchange if they hold BNB and pay platform fees in the token.
Additionally, merchants can accept BNB as a form of payment, giving customers another payment option.
It can be used for availing entertainment services like paying for virtual gifts, investing in stocks, and exchange-traded funds (ETFs), and as collateral for crypto loans.
Binance Coin (BNB) Price Prediction: 2024, 2025, 2030
At the time of writing, BNB is trading at $399.05. The token has risen over 12% in the last 7 days.
As per technical analysis, BNB is expected to trade between a minimum rate of $208.10 and a maximum of $409.08 in 2024.
The average trading price of Binance Coin this year is expected to be around $610.06.
In 2025, BNB is forecast to trade between $694.67 on the lower end and $849.20 on the upper end of the price spectrum.
The token is expected to have an average trading price of $720.98 during the year.
By the time 2030 rolls around, BNB is predicted to trade between $4,875 and $5,768.
The average trading price for Binance Coin during that year is expected to be around $5,045.
Where To Buy Binance Coin (BNB)?
Binance Coin (BNB) can be traded on the following crypto exchanges:
Is Binance Coin A Good Investment?
Binance Coin (BNB) is the native cryptocurrency of the Binance Chain and is used on the Binance exchange for trading cryptocurrencies and paying fees. The token has been ranked the fourth-largest cryptocurrency by market capitalization.
Unlike most crypto tokens native to exchanges, BNB has real use cases outside of the Binance exchange as it’s the utility and governance asset of the Binance Chain blockchain.
Developers of BNB burn a certain amount of the tokens regularly every three months, as a way to increase demand and protect the value of the token.
All things considered, I can fairly say that Binance Coin is a credible cryptocurrency token that should be considered for investment.
However, as is the case with any cryptocurrency, BNB is also susceptible to market swings and can experience a dramatic drop in value.
Therefore, it is crucial to do your research before making any crypto-related investment decision. Another point to note is to only put in money that you can afford to lose.
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