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BNB

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BNB, short for Binance Coin, is the cryptocurrency issued by the Binance exchange. Launched in July 2017, BNB was initially created as an ERC-20 token on the Ethereum blockchain, but it has since transitioned to Binance's own blockchain, the BNB Chain. The primary purpose of BNB was to serve as a utility token within the Binance ecosystem, providing users with various benefits, including discounted trading fees on the Binance platform.

During its Initial Coin Offering (ICO), Binance offered 100 million BNB tokens, representing half of its total supply of 200 million. The ICO was a significant event, as it allowed early investors to purchase BNB at a fraction of its current value, with an initial exchange rate of 1 ETH for 2,700 BNB or 1 BTC for 20,000 BNB, roughly equivalent to $0.11 per BNB at the time. The funds raised during the ICO were crucial for the development and expansion of the Binance platform, enabling it to become a dominant force in the cryptocurrency industry.

BNB's primary use case within the Binance ecosystem is to provide users with trading fee discounts. By using BNB to pay for trading fees on the Binance exchange, users can enjoy significant savings compared to paying fees with other cryptocurrencies. This incentive has driven widespread adoption of BNB among Binance users. Additionally, BNB is used to pay for transaction fees on BNB Chain and Binance DEX, further integrating it into Binance's comprehensive suite of blockchain services.

Beyond its utility on the Binance platform, BNB has expanded its use cases to include a wide range of applications. It can be used to pay for travel bookings, such as flights and hotel stays, through various partner websites. BNB is also accepted by several online merchants and service providers, enabling users to purchase goods and services directly with their BNB holdings. Furthermore, BNB can be used to participate in token sales on Binance's Launchpad platform, providing users with early access to new and promising cryptocurrency projects.

One of the unique features of BNB is its deflationary mechanism, known as the coin burn. Every quarter, Binance uses 20% of its profits to buy back and permanently destroy (or "burn") BNB tokens. This process reduces the total supply of BNB over time, theoretically increasing its value as the supply decreases. The most recent burn event, as of April 2024, saw the destruction of 1.94 million BNB, equivalent to $1.17 billion. These regular coin burns contribute to the long-term value proposition of BNB, making it an attractive asset for both traders and investors.

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