What are the differences between BNB and wBNB crypto? There are thousands of different types of crypto coins available in the market and some of these belong to the same group but are different variants, such as BNB and wBNB or Wrapped BNB.
There are too many crypto enthusiasts who get confused about BNB and wBNB since they do not know the basic differences between these two. This article will help you a lot if you are still unaware of it.
Ideally, Binance has created both BNB and wrapped BNB for different purposes, depending on the specific aspects of the platform.
However, most people, including the crypto community and members of Reddit, do not really say why exactly wBNB exists in the first place, strangely.
The actual reason behind creating wBNB is to move the actual monetary value to the Binance Chain from the US Dollar.
However, and for some unknown reasons, people tend to ignore this fact considering it to be unfair. Check out Differences Between Hot and Cold Crypto Wallets.
This can be either due to their ignorance about it or simply because they are more anxious about their greed. Well, this article is different from the others in that aspect and therefore you should spend just five minutes of read-time to go through it.
Contents
7 Differences Between BNB and wBNB Crypto
Typically, crypto traders and investors, especially those who are new in this field, often wonder what the need to create wrapped BNB by Binance is.
If you are one of them, read on to know about it along with a few other specific aspects that will raise your confidence.
1. Association
One of the most significant differences between BNB and wBNB is that BNB typically is not related to the standard of BEP 20.
On the other hand, the wrapped BNB tokens obey the rules of this specific standard.
2. Exchange of Coins
Since BNB is not linked with BEP 20 standard, these coins therefore cannot be exchanged with a majority of crypto tokens.
However, as a result of the BEP 20 standard, the wrapped BNB can be used on the Binance Smart Chain, unlike BNB, and can be exchanged with any type of crypto coin.
3. Creation
As said earlier, Binance created wrapped BNB for a specific purpose. Typically, the BNB or Binance Coin technically came into existence right after the launch of the Binance chain.
This specific chain allows the users to exchange, issue, and utilize digital coins easily on the blockchain. For all the activities, it uses its single native currency, the BNB.
On the other hand, after the release of the Binance Smart Chain, the wrapped BNB was created. This particular chain is typically a dual-chain system on which Binance now works.
This is a different blockchain launched and runs parallel to the Binance ecosystem. This specific blockchain sets up the capability to program on the Binance Chain and the smart chain feature supports a variety of smart contracts.
It also supports the EVM or the Ethereum Virtual Machine apart from performing its traditional tasks. Hence wrapped BNB was needed which can do much more acting like a BNB on steroids.
4. Applications
Another significant difference between wrapped BNB and traditional Binance coins lies in their respective applications. As stated earlier, the Binance coins do not obey the rules of the BEP 20 standard and therefore cannot be used by other applications.
In comparison, the wrapped BNB follows the BEP 20 standard, which is ideally an extension of the ERC 20 standard, which allows it to be utilized by other wallets and apps, like DEX, using any type of crypto token on the Binance Smart Chain.
5. Need
Typically, the crypto users need the wrapped BNB to accomplish all of those different purposes from BNB but without bringing down the value of the latter. It also helps in growing the Binance ecosystem further.
In comparison, all these purposes cannot be achieved with the Binance coin. Also, with BNB, you cannot directly trade with Altcoins that are typically available on the Binance exchange platform, unlike the wrapped BNB.
6. Blockchain Difference
Both Binance blockchain and Binance Smart Chain may seem to be identical to most of the users but these are significantly different, though both these types can communicate with each other easily and natively.
Binance Chain, on which the Binance Coin works, typically comes with an archaic and simple design. The primary objective of this blockchain is to expedite the trading process as well as increase its ability to handle several orders placed by several million users on the Binance platform.
On the other hand, the Binance Smart Chain, on which the wrapped BNB token works, is much more sophisticated in design and more advanced in functionality. This specific blockchain was typically designed as a community based and open source project.
The primary function of this particular blockchain is to build complex decentralized apps and run smart contracts. This further extends the functionality and performance level of the Binance Chain.
7. Statistical Differences
There are a few major statistical differences between wrapped BNB and Binance Coins which include price, market cap, and other aspects.
As for the wrapped BNB, the price of it is 492.369, its market cap is 3,381,999,035, the worth of tokens available in circulation is 6,868,830 and its trading volume is 672,277,433, all in US Dollars as of 10th September, 2021.
In comparison, the price of Binance Coin is 493.210, its market cap is 82,926,809,853, available supply is 168,137,000, and the trading volume is 2,334,860,000 as of 10th September, 2021.
All these values are in USD and at the time of writing, which varies every day. Therefore, checking the charts would be a prudent idea before investing.
Which is Better – BNB or wBNB?
Binance, as you may know, is one of the most popular and widely used crypto platforms. It has always tried to improve its services to offer the users a better experience and convenience.
The latest of its improvements is allowing the users to wrap the Binance Coins safely.
Though both Binance Coin and wrapped BNB are different in several aspects, you cannot say one is better than the other. It all depends on your needs and preference.
For example, if you are comfortable dealing with a token that does not follow BEP 20 standard, you can choose the Binance Coins to trade with, or else go for the wrapped BNB tokens.
Also, the wrapped BNB tokens will allow you to trade with a large number of crypto coins including Altcoins which will increase your chances to make more profits.
However, when you wish to wrap your Binance coins make sure that you attempt doing it in small amounts initially and then increase it gradually as your confidence grows.
This is because it involves a lot of risks and therefore even the slightest of mistakes may result in a huge loss of tokens.
But, if you want to keep things simple but still want to make your trades conveniently, you can stick to the Binance coins which are equally good.
Conclusion
Now that you are aware of the differences between BNB and wBNB, all your confusions regarding the usage, purpose, and functionality of the two are hopefully gone. Just make sure you choose the right token based on your needs.
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