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Wrapped BNB (#WBNB) Stories Around the Web
Wrapped BNB is a wrapped version of the Binance native tokens on the Binance Smart Chain. A wrapped token is a cryptocurrency token whose value is pegged to the value of another asset. In the case of Wrapped BNB, every WBNB coin is backed 1:1 to a binance asset. Wrapped Binance allows for faster Binance transfers on different blockchains and provides the opportunity for Binance’s native cryptocurrency BNB to be used within different blockchains.
BNB can easily be transferred to Wrapped BNB and Wrapped BNB to BNB. WBNB makes it possible for Binance’s liquidity to be used on different blockchains.
Wrapped BNB was announced by Changpeng Zhao. The cryptocurrency was to be part of the Binance platform.
## **Biggest Claims to Fame**
Wrapped BNB allows users to carry out transactions within different blockchains. By using wrapped BNB, users can migrate from network to network and still be able to perform financial transactions. This cannot happen using the Binance platform or many of the exchanges currently available. Platforms such as Binance do not allow for exchange between some altcoins and a cryptocurrency such as Ethereum. Wrapped BNB comes in to fix this.
Wrapped BNB helps lower the drain in liquidity of other cryptocurrencies when carrying out transactions. Cryptocurrencies such as Ethereum are expensive to transact due to its high cost. This cost can be reduced drastically by changing, for example, the value of Ethereum to Wrapped BNB and then carrying out a transaction. This transaction can then be reversed by the receiving party, changing the wrapped BNB into Ethereum. This can drastically reduce the transaction cost.
Wrapped BNB is more secure than BNB. Though BNB is secure enough, the use of wrapped BNB ensures it. Once a cryptocurrency is wrapped, it acquires a separate private key that a user controls themselves. Hackers will leave an account with a private security key alone if they are going for speed, which is what most hackers these days focus on considering the speed with which hacks are caught up with and prevented.
Wrapped BNB makes it possible for more cryptocurrencies to earn a profit on different cryptocurrency platforms. The currency allows for a bigger profit to be made during transactions and trades than platforms would make without the ability to run within different blockchains and with different cryptocurrencies.
Wrapped BNB offers fast transaction services. Buying and selling Blockchain or Ethereum takes up a considerable amount of time on their own platform. By changing the currency into Wrapped BNB, the transaction can be carried out on another platform and then transferred back into the original currency at very low costs and much higher speeds than it would have otherwise.
## **Biggest Criticism**
Wrapped BNB is highly centralized. Binance has heavy control over the coin. Over 80% of Wrapped BNB is owned by Binance. Though Binance in itself is a cryptocurrency market, the centralization of wrapped BNB puts them at odds with the founding principles of cryptocurrency which is that no central institution should have control over people’s finances. Despite Binance being a decentralized cryptocurrency, this is still an issue.
Wrapping and unwrapping WBNB is expensive. That cost comes from paying for the gas to work on the wrapping and unwrapping of the tokens since users pay for the gas costs. This can cause a user to pay more than the original token cost. This means WBNB is only effective for large or high-value transactions, otherwise, it costs more to transact than the actual token may be worth.
Wrapped BNB relies on custodians to wrap and unwrap cryptocurrency. These custodians could be smart contracts or a multi-signature wallet. In case the custodian is corrupted, it may end up not working as it should. In case the custodian is hacked, for example, it could drain the amount of cryptocurrency in a transaction instead of unwrapping it.
Wrapped BNB was created by Changpeng Zhao. He is a Chinese Canadian. He is also the CEO and founder of the Binance platform.