What is BNB and why should you hold it on Binance?

What Is BNB?

1. BNB is the native utility token of the Binance ecosystem, originally launched in 2017 as an ERC-20 token on Ethereum before migrating to Binance Chain and later Binance Smart Chain.

2. It serves multiple functions across Binance’s platforms including fee discounts, participation in token sales, staking, governance voting, and powering decentralized applications.

3. The total supply was capped at 200 million tokens, with periodic quarterly burns conducted using a portion of Binance’s profits until the supply reaches 100 million.

4. BNB underpins the BNB Chain infrastructure, acting as gas for smart contract execution and transaction validation on both BSC and BNB Greenfield.

5. Its architecture supports interoperability between centralized services and decentralized protocols, enabling seamless asset transfers and cross-chain composability.

Fee Discounts on Binance Exchange

1. Holding BNB grants users up to a 25% discount on trading fees when paying with BNB instead of other assets like BTC or USDT.

2. This discount applies to spot, margin, futures, and options trading, making it especially valuable for active traders executing high-frequency orders.

3. Users can enable automatic BNB fee deduction in their account settings, ensuring real-time application without manual selection per trade.

4. The discount remains valid even during periods of market volatility or exchange maintenance, offering consistent cost efficiency.

5. Fee reductions are calculated dynamically based on the BNB balance held at the time of order execution, not average balances or snapshots.

Participation in Launchpad and Launchpool

1. BNB holders gain priority access to Binance Launchpad token sales, where new projects raise capital through public token offerings.

2. Allocation in Launchpad events is determined by the user’s average BNB balance over a defined snapshot period, incentivizing long-term holding.

3. Launchpool allows users to stake BNB alongside other tokens to earn yield from newly launched project tokens before they list on the exchange.

4. Staking BNB in Launchpool does not require locking funds indefinitely; many campaigns support flexible unstaking with partial rewards accrued.

5. Historical data shows that early participants in Launchpad/Launchpool often receive tokens at significantly lower valuations than post-listing market prices.

Staking and Yield Opportunities

1. BNB can be staked directly through Binance Earn products such as Locked Staking, offering fixed APYs denominated in BNB or stablecoins.

2. Flexible savings options allow users to deposit and withdraw BNB at any time while earning variable interest rates updated daily.

3. BNB is accepted as collateral in Binance Loans, enabling users to borrow against their holdings without selling their position.

4. On BNB Chain, users deploy BNB into liquidity pools, lending protocols, or restaking solutions to capture protocol-specific incentives and emissions.

5. Cross-chain bridges integrated with BNB Chain permit BNB to be wrapped and used in DeFi ecosystems beyond native chains, expanding yield surfaces.

Frequently Asked Questions

Q: Can I use BNB to pay for services outside Binance?A: Yes. BNB is accepted by over 2,000 merchants globally for payments ranging from travel bookings to domain registrations via partnerships with payment gateways like CoinPayments and BitPay.

Q: Is BNB subject to regulatory scrutiny?A: BNB has faced investigations by certain jurisdictions, including the U.S. SEC, which alleged it functioned as an unregistered security during its initial distribution phase. Legal proceedings remain ongoing in some regions.

Q: Does BNB have deflationary mechanics beyond burns?A: No. The sole deflationary mechanism is the scheduled burn process. There are no built-in mechanisms like transaction taxes or automatic supply reduction tied to usage metrics.

Q: How does BNB differ from ETH in terms of utility?A: While ETH powers computation on Ethereum, BNB primarily facilitates fee settlement and governance within Binance’s vertically integrated stack. Its role is more tightly coupled with exchange operations than general-purpose programmability.