Financial engine: How BNB powers Binance money-making empire

​Everyone has heard of Binance — one of the world’s largest cryptocurrency exchanges with hundreds of traded assets. But Binance is more than just a trading platform. The company has its own cryptocurrency project that plays a key role in monetizing the platform and developing its entire ecosystem.

We are talking about BNB — Binance’s native cryptocurrency, which serves both as the native token of the Binance Chain and BNB Smart Chain, as well as an internal means of payment on the exchange.

Top cryptocurrencies by market capitalization. Source: CoinMarketCap

As of today, BNB is among the Top 5 largest cryptocurrencies by market capitalization, valued at around $90 billion. No one expected that an ordinary exchange token would reach such heights.

How BNB was created

BNB (Binance Coin) was created in July 2017 as part of the launch strategy for the Binance cryptocurrency exchange. Initially, the token was issued on the Ethereum blockchain as an ERC-20 token, with a total supply of 200 million coins. During the initial coin offering (ICO), Binance raised about $15 million by selling half of the tokens to investors. Even then, it was announced that BNB would be used to pay trading fees with a discount, which stimulated demand for the token.

Later, in April 2019, Binance launched its own blockchain — Binance Chain, and most BNB tokens were migrated from Ethereum to the new network. This marked the transition of the coin to the native BEP2 standard.

Loading...

Then came a second chain — Binance Smart Chain (now BNB Smart Chain), which enabled the creation of smart contracts and earning through BNB staking. This new service also allowed developers to build decentralized applications and DeFi services within the Binance ecosystem.

How BNB works and is used today

Today, BNB is a fully functional economic unit within the Binance ecosystem. Its main function is to serve as an internal means of payment across Binance platforms, including transaction fees on the BNB Smart Chain and participation in token launches on Binance Launchpad.

In the BNB Chain networks, BNB acts as “fuel” for transactions and smart contracts, similar to how ETH is used in Ethereum. This has made BNB the foundation for a huge number of decentralized applications, NFT marketplaces, DeFi protocols, and Web3 services.

The operational principle of BNB in the blockchain relies on the Proof of Staked Authority (PoSA) consensus mechanism, where block validators receive rewards in BNB. Users can delegate their tokens to validators and earn a share of the profits — thus enabling a staking component. The total supply of BNB was capped at 200 million coins, but since launch, Binance has regularly burned part of the tokens to reduce the circulating supply and increase scarcity. This helps maintain price support and incentivizes demand.

Until 2021, Binance manually burned BNB each quarter, destroying a specific amount of tokens based on the platform's revenue. However, the company later implemented an automatic mechanism called Auto-Burn, which calculates the number of tokens to be burned based on the token's price and total supply. This made the process more transparent and less dependent on centralized decisions. Additionally, real-time burning of fees is used on BNB Smart Chain, similar to Ethereum’s EIP-1559 model.

Loading...

Why Binance’s token became so popular

Few would deny today that the BNB project has been a success. Its popularity is driven by several factors. First, the token is highly integrated into all Binance products — from the centralized exchange to decentralized finance.

Second, its usage offers real economic benefits to users, including fee discounts and early access to investment opportunities.

Third, regular token burning and active development of the BNB Chain have created a sustainable model of scarcity and price support. This is why BNB has become one of the most resilient cryptocurrencies on the market.

One should not overlook the support from the Binance ecosystem itself, which actively promotes the token through marketing campaigns, partnerships, and technical initiatives. BNB has become a core element of numerous projects launched on BNB Chain, including games, NFT platforms, cross-chain protocols, and DeFi solutions.

What are BNB’s prospects?

BNB’s future looks quite promising, especially in light of recent news about a potential BNB exchange-traded fund (ETF) in the United States. Asset management firm VanEck has submitted a registration filing to the U.S. Securities and Exchange Commission (SEC) to launch the first-ever BNB-ETF in the country.

Loading...

This could be a historic milestone for the entire altcoin market. Until now, such ETFs have only been approved for Bitcoin and Ethereum, while BNB — the third-largest crypto asset by market cap — could become the first to get its own ETF in the U.S.

If the SEC approves the application, it would enhance BNB’s legitimacy and give millions of new investors — including pension funds, hedge funds, and brokers — access to one of the most active blockchain ecosystems without needing to buy the cryptocurrency directly.

The path to success

BNB has evolved from a simple exchange token into a cornerstone of one of the largest ecosystems in the crypto world. Its technical versatility, integration within Binance infrastructure, and well-structured economic model have made it an indispensable part of both centralized and decentralized systems. Thanks to its automated burn mechanism, developer support, and active use in DeFi projects, BNB not only remains relevant but continues to expand its influence.

Today, interest in the token is gaining new momentum, with the potential launch of the first BNB-ETF in the United States on the horizon. This could not only give BNB institutional weight but also open the doors to a new influx of capital into the Binance ecosystem. As the crypto market moves toward maturity and acceptance in traditional financial spheres, this step may solidify BNB’s status as one of the leading digital assets of the next generation.