The best returns for your BNB in 2021

The best returns for your BNB in 2021

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Mike
Mike

An editor at Coincrop


22 Dec 2021 | 11 min read
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B

inance are well known as being the biggest crypto exchange in the world.  Much of the trading on the exchange is facilitated by Binance Coin (BNB), a token that has been in circulation since 2017.  BNB is an exciting cryptocurrency as it has a number of established use cases.

In this guide:

Disclaimer: All of the information written on Coin Crop is without influence and based on our analysis. No guarantee is offered concerning the accuracy of this information and therefore, any individual following up on it does as such completely at their own risk. Rates are correct at time of publication.

What is BNB?

Binance Coin (BNB) is a cryptocurrency that was created to pay for services, goods and transaction fees on the Binance Smart Chain.  The token was first minted in July 2017 initially on the Ethereum network before it moved onto the Binance Chain.

How is BNB used?

The token has a number of uses:

    • Paying transaction fees on Binance Exchange – transaction fees on the Binance Exchange can be settled in BNB and as an incentive, users receive a discount for doing so.  The trading discounts are as follows: 25% on spot trading fees, 25% on margin trading fees and 10% on futures trading fees.

    • Credit card payment – On Crypto.com BNB for can be used as payment for settling credit card bills.

    • Binance Visa card – BNB can be spent at more than 60 million merchants worldwide.

    • Travel – Several web sites (TravelbyBit, Trip.io and Travala.com) accept BNB as a payment for booking hotels and flights.

    • Loans – Binance, ETHLend and Nexo allows you to take out a loan and use BNB as collateral.

    • Entertainment – A variety of companies accept BNB as payment for providing entertainment services.  For example, Decentraland accept BNB as part of auctions and Axie Infinity allows virtual land to be purchased using BNB etc.

What was the Binance Coin ICO?

BNB was launched back in July 2017 with what is known as an initial coin offering (ICO).  200 million BNB tokens were distributed to a number of participants such as the Binance team and angel investors.  The distribution split was as follows:

    • Public 50% - 100 million BNB

    • Founders 40% - 80 million BNB

    • Angel investors 10% - 20 million BNB

The 100 million BNB tokens sold to the public during the ICO were priced at 15 cents per token.  This raised USD $15 million in Ethereum and Bitcoin.

How can I buy BNB?

BNB can be purchased in the following ways:

    • The Trust Wallet iOS or Android application and a credit card

    • Binance web site with a variety of payment methods

    • Paybis web site with a credit/debit card, bank transfer, skrill, Neteller or another crypto currency.

    • Gate.io web site with a credit/debit card or bank transfer

What’s the best way to store my BNB?

Your BNB can be stored using a variety of wallet types:

    • Binance Exchange    

    • Exodus Wallet  

    • Trust Wallet

    • MetaMask Wallet

    • Ledger Nano S (hardware wallet)

    • Trezor Model T (hardware wallet)

    • Binance Chain Wallet

    • Atomic Wallet

    • Coinomi Wallet

    • Enjin Wallet

BNB burning

Every quarter Binance schedules a ‘burn’ of BNB in which the supply is permanently reduced – this normally has the effect of increasing the value of the remaining BNB.  The purpose of the burning is to ensure that BNB remains finite, scarce and thus more valuable.

The quantity of BNB to be burned is calculated according to the overall quarterly trading volume of Binance.  At the time of writing, the 16th burn for Q3 2021 burnt nearly 1.3 million BNB.

The BNB quarterly burns are set to continue until 100 million BNB are burned – a representation of 50% of the total supply.

How can you invest your BNB?

Once you have purchased some BNB and hold it in a wallet, you should give some consideration to how the asset can be invested.  Below are some strategies:

i) Buy and hold

If you are particularly risk averse, then you may choose an approach of buying the BNB and simply holding it in a wallet.  Given the rapid growth of the Binance exchange together with the recent move to a staking model for BNB, we are likely to see increased pricing momentum.  Additionally, the regular burn means supply is decreasing.

ii) Saving BNB

A number of organizations will now invest your BNB and pay a return.  In practise these companies will use a combination of staking and yield farming to earn the returns.  The advantage of saving with an organization is that they insulate you from much of the technical complexity around investing the asset.  The disadvantage of such an approach is the potential for loss from a company that fails - as always, research is key.

iii) Staking BNB

Staking is the technique of locking up your cryptocurrency for the purposes of running and securing a blockchain network.

The Binance Smart Chain blockchain uses a proof-of-staked-authority (PoSA) mechanism.  This is implemented using 21 so-called validators which process transactions in the blockchain.  These validators then receive BNB tokens as a reward for performing this task.

Running a validator is beyond the means of most individuals as it requires:

    • Staking a minimum of 10,000 BNB

    • Election every 24 hours in order to be one of the top 21 candidates in voting powers

    • Operating a full Binance Smart Chain node

Fortunately there are easier ways to partake in staking.  Instead of running your own validator, individuals can delegate to existing validators and pay a percentage fee for the service.

The easiest way of staking is to use an exchange – the exchange performs the role of a validator and undertakes all the technical tasks.

iv) Yield Farming BNB

For the more technically adventurous, your BNB can be paired with other assets and placed into liquidity pools for the purposes of yield farming.  Your return is earned (in the form of a share of fees) when other individuals on DeFi exchanges swap between two assets (utilising the assets in your pool). 

The best BNB saving rates

OrganizationTermsRatingAPY Rate
CelsiusFlexible

8.19%

SwissBorgFlexible

8.04%

NexoFlexible

8.00%

HiFixed (365 days)

8.00%

MyConstantFlexible

7.00%

The best BNB staking rates

OrganizationTermsRatingAPY Rate
Binance Chain Staking

(Validator BNB48 Club)

Fixed (7 days)

8.90%

Binance Chain Staking

(Validator defibit)

Fixed (7 days)

7.35%

Binance Chain Staking

(Validator Legend II)

Fixed (7 days)

6.95%

Binance Chain Staking

(Validator CertiK)

Fixed (7 days)

6.61%

Binance Chain Staking

(Validator Avengers)

Fixed (7 days)

6.35%

The best BNB yield farming rates

OrganizationTermsRatingAPY Rate
Beefy FinanceFlexible

64.2%

Beefy FinanceFlexible

55.8%

Beefy FinanceFlexible

55.8%

Beefy FinanceFlexible

55.8%

Beefy FinanceFlexible

55.8%


Mike

Mike

An editor at Coincrop
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