Wrapped BNB (WBNB)
Wrapped BNB is a cryptocurrency that exists as a wrapped version of the Binance Coin (BNB), specifically designed to operate on the BEP-20 standard within the Binance Smart Chain (BSC) and other Ethereum Virtual Machine (EVM)-compatible blockchains. This token facilitates interoperability and enhances the utility of BNB across different blockchain environments. The official website for more information is Binance.org.
Understanding wrapped BNB
| Ticker | WBNB |
| Category | Crypto-Backed Tokens |
| Website | https://www.binance.org/ |
| Contract Addresses | |
|---|---|
| binance-smart-chain | 0xbb...5c Copied! |
Wrapped BNB, often abbreviated as WBNB, serves as a bridge to enable the use of Binance Coin within ecosystems that support the BEP-20 standard. The concept of "wrapping" refers to the process of creating a tokenized version of an asset to be used on a blockchain that is different from where the original asset resides. In this case, WBNB acts as a representation of BNB on the Binance Smart Chain and other EVM-compatible platforms.
The role of BEP-20 standard
The BEP-20 standard is a technical specification on the Binance Smart Chain that defines a set of rules for token issuance and implementation. Modeled after Ethereum's ERC-20 standard, it facilitates the creation of tokens that can interact seamlessly with applications and smart contracts on the BSC network. Wrapped BNB adheres to this standard, ensuring compatibility and enabling its use across a wide range of decentralized applications (dApps).
How wrapped BNB works
Wrapped BNB functions by locking up an equivalent amount of BNB in a smart contract, which then issues WBNB tokens on the Binance Smart Chain. This 1:1 backing ensures that each WBNB is directly tied to an actual BNB token. When a user wants to convert WBNB back to BNB, the process is reversed: WBNB tokens are destroyed, and an equal amount of BNB is released from the reserve.
Advantages of using wrapped BNB
Wrapped BNB provides several advantages for users and developers:
- Interoperability: It allows BNB to be used within the Binance Smart Chain and other EVM-compatible ecosystems, expanding its utility beyond the original Binance Chain.
- Liquidity: WBNB contributes to the liquidity of decentralized exchanges (DEXs) and other financial applications by enabling BNB to be traded directly within the BSC ecosystem.
- Smart contract functionality: By existing as a BEP-20 token, WBNB can interact with smart contracts across various dApps, unlocking a multitude of use cases.
Use cases of wrapped BNB
Wrapped BNB is utilized in several ways within the blockchain space:
- Decentralized finance (DeFi): WBNB is often used in DeFi applications for lending, borrowing, and yield farming. Its presence in liquidity pools enhances the overall liquidity of the BSC network.
- Trading: As a wrapped token, WBNB facilitates trading pairs with other tokens on decentralized exchanges, offering users more trading options.
- Staking: Users can stake WBNB in various protocols to earn rewards, contributing to the security and functionality of the network.