BNB (Binance Coin)
BNB, also known as Binance Coin, is a crypto token. It’s mainly used to carry out actions on BNB Smart Chain.
What is BNB?
BNB is the native token of BNB Smart Chain. Native means that BNB is the network’s own coin. You can use it to pay transaction fees, among other things.
These fees are called gas fees. When you send BNB or use a smart contract, you pay gas fees in BNB. A smart contract is a program on a blockchain that runs automatically based on preset rules.
BNB can also be used for staking. This means committing BNB to the network. Validators process transactions and create new blocks. Which validators are selected depends in part on the BNB they or others have staked.
An example of BNB
Suppose you want to use an app on BNB Smart Chain. The app uses a smart contract to carry out your action.
The network has to process that action, so you pay a small fee in BNB. Without BNB in your crypto Wallet, you can’t pay that fee. This shows that BNB has a practical use within the network.
Why is BNB important in crypto?
BNB often comes up in crypto news about developments related to BNB Smart Chain, staking, or transaction fees. News may also cover validators, since a limited group of validators produces blocks. This can allow for fast confirmation, but it also means that block production is handled by relatively few parties.
You may also see news about a BNB burn. In a burn, tokens are permanently removed from the supply. BNB has several such mechanisms. Fewer tokens in the supply does not, by itself, mean that demand for or the value of BNB will increase.
BNB began as an ERC-20 token on Ethereum, but it’s now mainly associated with BNB Smart Chain and the broader BNB Chain ecosystem. So BNB isn’t just a token to hold; it’s also needed for activities on the network.
