Question 1

What is Binance Coin (BNB)?

Accepted Answer

Binance Coin (BNB) initially launched as an ERC-20 token on the Ethereum blockchain in July 2017 as part of Binance’s Initial Coin Offering (ICO). The token was created primarily to facilitate trading fee discounts and other functionalities on the Binance cryptocurrency exchange. The total supply of BNB was capped at 200 million, with 100 million BNB offered during the ICO. The ERC-20 version of BNB followed the standard protocol, allowing it to be compatible with Ethereum-based wallets and applications.

Question 2

What is Binance Coin (BNB) used for?

Accepted Answer

The ERC-20 version of Binance Coin (BNB) was originally used for several purposes within the Binance ecosystem:

1. **Trading Fee Discounts**: Users holding BNB on the Binance platform could use it to pay trading fees at a discounted rate, initially 50% during the first year, with the discount rate decreasing over time.
  
2. **Token Sales on Binance Launchpad**: BNB was used to participate in token sales on Binance Launchpad, Binance’s token launch platform.

3. **Pairing with Other Cryptocurrencies**: BNB was often used as a base pair on the Binance exchange, allowing users to trade it against a variety of cryptocurrencies.

4. **Burn Mechanism**: Binance committed to using 20% of its quarterly profits to buy back and burn BNB, reducing its total supply over time.

Question 3

The Migration from ERC-20 to Binance Chain

Accepted Answer

On April 18, 2019, Binance launched its own blockchain, Binance Chain, and began the process of migrating BNB from the Ethereum network (ERC-20) to Binance Chain (BEP2). The migration was a significant event in the Binance ecosystem, marking the transition from an ERC-20 token to a native Binance Chain asset.

Question 4

# Key Details of the Migration:

Accepted Answer

1. **Mainnet Launch**: Binance Chain’s mainnet went live on April 18, 2019, with the initial BNB (BEP2) being created in the genesis block.

2. **Mainnet Swap Date**: The mainnet swap was scheduled for April 23, 2019. Users holding ERC-20 BNB tokens were required to either transfer their tokens to Binance.com or ensure that their wallets supported the mainnet swap.

3. **Conversion Mechanism**: Binance facilitated the conversion of ERC-20 BNB to BEP2 BNB. For each conversion, a corresponding amount of ERC-20 BNB was burned to keep the total supply constant at 200 million BNB. Initially, 5 million BNB were converted, with more conversions occurring as users participated in the swap.

4. **Temporary Use of ERC-20 BNB**: During the transition period, users could still withdraw ERC-20 BNB to Ethereum wallets until April 23, 2019. However, these tokens were only temporarily supported, as the primary BNB asset became the BEP2 token on Binance Chain.

5. **Post-Migration**: After the mainnet swap, Binance.com continued to support deposits of ERC-20 BNB for a limited time, but users were encouraged to convert their tokens to BEP2 as soon as possible.

Question 5

Who created Binance Coin (BNB)?

Accepted Answer

Binance Coin (BNB) was created by Binance, one of the world's largest cryptocurrency exchanges. Binance was founded by Changpeng Zhao (commonly known as CZ) and Yi He in 2017. CZ has a background in trading systems and technology, having previously worked at Bloomberg Tradebook and as CTO of OKCoin, another cryptocurrency exchange.