What is BNB?

BNB (formerly Binance Coin) was created in 2017 by Binance, the world's largest centralized cryptocurrency exchange by trading volume. Originally an Ethereum ERC-20 token used for exchange fee discounts, BNB migrated to the native BNB Chain (formerly Binance Smart Chain), where it functions as both the gas token and governance asset. BNB's value is structurally tied to Binance's business — the exchange conducts regular token burns using a portion of profits, reducing supply over time.

BNB Chain uses a delegated proof-of-stake (DPoS) consensus mechanism with a small, permissioned validator set — typically around 21 active validators. This design enables high throughput and low fees (making it attractive for DeFi and gaming applications) at the cost of meaningful decentralization: Binance effectively controls a majority of the validator set. The network achieved rapid adoption partly because EVM compatibility allowed Ethereum projects to deploy on BNB Chain with minimal code changes, and Binance aggressively promoted the ecosystem through launchpad programs and fee subsidies.

The primary risk specific to BNB is its regulatory and counterparty entanglement with Binance. In November 2023, Binance pleaded guilty to US federal charges of violating anti-money-laundering and sanctions laws, paying a $4.3 billion settlement and seeing its CEO Changpeng Zhao ('CZ') step down and subsequently sentenced to prison. Unlike Bitcoin or Ethereum, BNB has no existence or security guarantee independent of the Binance company — if Binance faced severe regulatory action or insolvency, BNB's utility and liquidity would be directly impaired. The token burn mechanism, while deflationary, is also discretionary and controlled by a single entity.

Reviewed by the 2Bitcoins Editorial Team · Updated June 2026. Not financial advice.