Binance is a cryptocurrency exchange that launched in the summer of 2017 and swiftly grew to become one of the world's largest by trading volume, making a profit of $200 million in its second full quarter of operation. Binance Coin is an ERC-20 token that was issued as part of an initial coin offering (ICO) to be used for discounted trading costs, with a percentage of the tokens burned every quarter.
ERC-20 tokens were replaced by native tokens when Binance launched Binance Chain, its own public blockchain, in April 2019. The team constructed Binance DEX, a decentralized exchange that allows traders to keep custody of their cash, on top of Binance Chain. Over time, the token has gained additional functionality, such as use in the Binance Launchpad lottery system and different payments in the Binance ecosystem.
CEO Changpeng Zhao ("CZ") has also stated that 90% of Binance employees opt to earn a portion of their income in BNB.
Binance Coin was originally launched as an ERC-20 token on Ethereum until April 2019. Binance converted all ERC-20 BNB tokens to Binance chain BNB coins a couple days after the Binance chain mainnet launched. Two months earlier, Binance chain’s testnet launched and was used by the internal Binance team and some high-volume traders for testing.
Binance’s decentralized exchange (DEX) is built on the Binance blockchain using Tendermint and the Cosmos Software Developer Kit (SDK). Binance forked Cosmos to create the Binance blockchain, which currently does not support smart contract features. Binance aims to use the Tendermint consensus framework to solve some interoperability problems with inter-blockchain communication (IBC).
Binance chain source code is currently not open source for competitiveness reasons, according to Binance. But the exchange plans to open source the DEX and blockchain codebases when both products gain more adoption.