With over 17K digital coins in existence, Binance Coin (BNB) stands as one of the most lucrative cryptos, securing the fifth spot among rivals in the top 10 assets by market cap. As of April of this year, there are over 17K cryptos in existence, and we’re on track to hit a whopping 100MN mark by 2025’s final. The total market capitalization of all cryptos combined stands at around $1.32TN, with a trading volume of all cryptos positioned at $172BN per day by press time. Of these, Bitcoin (BTC) and Ethereum (ETH) account for almost 75% of the whole cryptocurrency market cap. The remaining share is seized by altcoins like BNB, which accounted for $108.3BN in December of last year and is predicted to hit $1.708BN by 2035, as well as meme coins like Dogecoin, stablecoins like USDT, and the list goes on.
The beating heart of the entire BNB ecosystem lies in BNB. Users can pay discounted fees for transactions by using this coin as a medium for payments, making it a boon among crypto traders, and more. BNB’s use cases go beyond this and into the realms of both decentralized and centralized frameworks. This article breaks down the asset’s early stages, auto-burn system, and main categories of use cases, so keep reading if you want to engage with BNB one day.
The Beginnings
For newbies, BNB was released in July 2017 through an Initial Coin Offering (ICO) created by Binance, the largest online crypto exchange to date, named Binance Coin. The project was developed on top of the first smart contract platform by excellence, Ethereum, as an ERC-20 token – a technical standard regulating the creation and launch of assets on the chain. The primary goal was to help Binance exchange users pay less for trading, consequently aiming to boost the trading ecosystem and encourage participation in the Binance Smart Chain. Nevertheless, the project took a turning point in 2019, when the founding company launched its own blockchain in an attempt to boost the ecosystem’s speed and scalability.
In 2022, the company changed the Binance Coin’s name to BNB—short for “Build’N’Build”—and rebranded the Binance Smart Chain name into BNB Chain (BSC). The company also initiated a campaign that offered hearty discounts to improve the chain’s draw among users. BNB moved from Ethereum to BSC and transformed into the Binance blockchain’s native crypto.
The Auto-Burn System
Initially, BNB had a supply cap of 200MN coins, following a similar pattern to Bitcoin – though Bitcoin’s cap is 179 million coins lower. Crypto devs can establish whether a coin should have a fixed supply cap or not, a component that’s crucial in determining a said project’s success and market value, impacted by other factors. Nevertheless, over 38MN BNB coins have been eradicated from the market ever since, slashing its initial supply by over 19% due to a mechanism known as auto-burning. The BNB auto-burn mechanism was introduced in December 2021 in an attempt to automatically regulate the burn amount depending on factors like supply-demand dynamics and BNB’s market value.
This model intends to offer more transaction transparency and predictability, leveraging on-chain data from BSC to gauge the amount necessary to burn BNB. In simple terms, a deflationary mechanism known as the Auto-Burn system is used to cut the coin’s total supply to 100MN coins through regular burns influenced by BNB’s value and the number of blocks issued quarterly. This strategy aims to help drive up the value of coins circulating and contribute to the price of $540 needed to buy a whole coin at the moment of writing. The asset has a circulation supply of 142.47M, a market cap of $76.95BN, and an all-time high (ATH) of $793.35, the latter of which was attained on December 04, 2024. Noteworthy, all burn events are readily accessible on the blockchain or can be traced online.
What To Expect In The Future
BNB’s role in the broader crypto ecosystem is undeniably different from that of other market participants. But what about its longer-term prospects?
One of the main things to keep in mind is that BNB’s performance is closely connected to the overall functioning of its support company, Binance. The exchange platform secures its spot as the largest one worldwide, having exceeded the number of 250MN registered users worldwide by 2024’s end. This massive user base expansion sets the stage for further growth towards the targeted 1BN benchmark. As the platform celebrates such successes, BNB’s link to it helps sustain steady demand and counteract market swings. Thus, BNB has benefits to reap whenever Binance excels, as it has up to now. Nevertheless, the coin’s performance is also subject to many other aspects, such as macroeconomic events and data.
For context, the overall expert sentiment about BNB’s future performance is somewhat bullish. Aspects such as its appeal as a hedge against inflation and economic uncertainty boost BNB’s future prospects and faith in its potential to overcome the market’s volatility.
Shortly, BNB’s path to success shows that coins that don’t experience rapid price surges can sometimes achieve long-term success. Whatever may be in the books for the crypto market, the native coin of the world’s leading online crypto exchange is reasonably worth keeping tabs on.
Things To Keep In Mind
Competition thrives within the crypto industry, suffocated by numberless coins and others that are being cooked in the oven. BNB is one of the worthiest coins, but it’s important to watch over various elements that can impact its price in the long term, like regulatory concerns and competition from different platforms. Watchdogs’ decisions as to how the crypto industry should be treated can impact the whole market, BNB included. For instance, regulations around Bitcoin have a say in how the asset’s price performs and in the achievements of all the other cryptos around.
BNB has numerous use cases and boasts considerable adoption rates, yet it remains a purely speculative financial vehicle. Investors should consider these factors when evaluating BNB and its potential to improve their portfolios’ value.
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