WBNB (Wrapped BNB) is a form of BNB cryptocurrency that conducts transactions in the DeFi world if the transaction is on a BEP20 network. WBNB value is pegged on the price of BNB asset and can exchange for the original BNB token at any time. Simply put, the value of wrapped BNB is determined by the original token from which it is wrapped.
Wrapped BNB was created to improve BNB Smart Chain’s (BSC) interoperability, as having separate blockchains with different functions prevents tokenized interaction and limits cross-chain transactions. BEP20, the standard version of BNB Smart Chain that allows you to use it for other applications, is used by WBNB to facilitate chain transfers. First, to better understand this concept, let’s look at what a wrapped token is.
What is a wrapped token?
A wrapped token is a token minted to be used on other blockchain networks. Imagine you have a one-dollar bill in your pocket and want to call using a payphone. You cannot insert your dollar bill into the pay phone. So, you have to exchange your bill for four one-quarter coins. Your coins will have the same value as the bill but can be used for making a call. Minting a wrapped token does the same.
Wrapping tokens is done to make a coin usable on a blockchain network other than its native network. For example, you can’t use your Bitcoin on the Ethereum network to use the services of decentralized exchanges (DEX) and DeFi applications on the Ethereum blockchain. Instead, you must wrap your Bitcoin and take your WBTC to a DEX. Wrapped tokens have the same value as the native token and are issued in a 1:1 ratio.
What is the difference between BNB and WBNB?
Binance is by far the world’s leading centralized cryptocurrency exchange (CEX) by volume of trade, according to statistics . Binance was founded in 2017 and launched BNB as a token on the Ethereum network. Two years later, Binance migrated BNB to its blockchain network, Binance Chain. But BNB’s functionality was limited to trading cryptocurrency as Bitcoin does. In September 2020, Binance launched its Binance Smart Chain (BSC), which was later rebranded to BNB Smart Chain. The launch of this network was a breakthrough for Binance since it introduced capabilities such as smart contracts and DeFi applications. However, there was an obstacle to its full functionality: BNB coin.
Since BNB was initially designed to work as merely a cryptocurrency, it could not be used for the purposes BSC hoped to follow. To solve the limitations of BNB, the Binance Smart Chain development team designed the WBNB token to be more functional than its predecessor. WBNB can interact with complex decentralized applications accurately and comply with multiple smart contracts. The standard that Wrapped BNB uses is BEP20. It can be used on the BNB Smart Chain and traded for almost all tokens on this network. Wrapped BNB serves as an intermediary for a bridge between blockchains, allowing users to move from one network to another when performing financial transactions.
What is WBNB in PancakeSwap
PancakeSwap is one of the most popular decentralized exchanges (DEX) on the Binance Smart Chain. It allows users to swap between different BEP-20 tokens, such as WBNB, CAKE, BUSD, and many others. It also offers other features such as liquidity pools, farms, lotteries, and NFTs. To use WBNB on PancakeSwap, users need a Web 3.0 wallet, such as MetaMask or Trust Wallet, that supports the Binance Smart Chain network. Users also need to have some BNB in their wallets to pay for the gas fees on the network. To swap BNB for WBNB, users need to use a bridge service that locks BNB on the Binance Chain and issues an equivalent amount of WBNB on the Binance Smart Chain. One of the easiest ways to do this is to use PancakeSwap itself. Users can go to the trade section on PancakeSwap and select BNB as the input token and WBNB as the output token.
Why do you need WBNB?
WBNB allows users to access features and trade with other BEP-20 tickets on platforms like PancakeSwap. To convert BNB to WBNB, users need to use a bridge service that locks BNB on the Binance Chain and issues an equivalent amount of WBNB on the Binance Smart Chain. The reverse process can also be done to redeem BNB from WBNB
WBNB vs. BNB
BNB and WBNB are both tokens issued by Binance but they have different use cases and technical features.
BNB is the native token of the Binance Chain, a fast and straightforward blockchain designed for trading and exchanging cryptocurrencies. WBNB is a wrapped version of BNB that follows the BEP-20 standard, compatible with the Binance Smart Chain. The Binance Smart Chain is a parallel blockchain that supports smart contracts, decentralized applications, and interoperability with other blockchains. WBNB allows users to access these features and trade with other BEP-20 tokens on platforms like PancakeSwap.
How to wrap your BNB
To convert BNB to WBNB, users need to use a bridge service that locks BNB on the Binance Chain and issues an equivalent amount of WBNB on the Binance Smart Chain. The reverse process can also be done to redeem BNB from WBNB.
Advantages of using WBNB
Wrapping tokens adds many features to tokens, which is why WBNB has more advantages than the original BNB. Below, some advantages are discussed.
- Exchanging BNB for WBNB is super easy, and it can be done on wallets like Trust Wallet in seconds.
- Swapping between BNB and WBNB is very cheap; the only fee you pay will be the gas fee.
- Developers can use WBNB to develop their protocols, digital assets, and NFTs.
- Interoperability (transaction on other blockchains than the native one) is easily possible.
WBNB’s pricing history
WBNB is the symbol for Wrapped BNB, a tokenized version of BNB on the Binance Smart Chain. BNB holders can participate in decentralized applications (dApps) and decentralized exchanges (DEXs) on the BSC network.
The price history of WBNB can be seen on various websites that track cryptocurrency prices, These websites provide different charts and data points to show the changes in WBNB price over time. The all-time high price of WBNB was USD 687.22 on May 10, 2021, and the all-time low price was USD 23.60 on September 24, 2020.
Here you can see the history of WBNB pricing for the first three months of the year 2023
| Date | Open | High | Low | Close | Volume | |
| Mar 19, 2023, | $ 330.71 | $ 340.03 | $ 330.71 | $ 337.80 | $ 57.04M | |
| Feb 17, 2023, | $ 304.73 | $ 315.62 | $ 304.73 | $ 313.68 | $ 124.44M | |
| Jan 18, 2023, | $ 299.59 | $ 304.50 | $ 283.53 | $ 287.46 | $ 64.34M |
How to do Price predictions for WBNB
Price prediction is a challenging task that involves analyzing various factors that can affect the supply and demand of a cryptocurrency. Some possible ways to approach price prediction are:
- Considering both on-chain and off-chain metrics, such as network activity, transaction volume, trading volume, liquidity, market capitalization, etc. These metrics can provide insights into the health and growth of the WBNB ecosystem and its adoption by users and developers.
- Using technical indicators that take into account Wrapped BNB’s past price performance, such as trend lines, moving averages, support and resistance levels, Fibonacci retracements, etc. These indicators can help identify patterns and signals that indicate potential price movements and changes in momentum.
- Gauging the market sentiment to see whether investors are optimistic or pessimistic about Wrapped BNB. This can be done by monitoring social media platforms, news outlets, forums, blogs, etc., that discuss WBNB and its related projects. Sentiment analysis can help measure the emotions and opinions of the crypto community and how they may influence the buying and selling behavior of traders.
- Comparing Wrapped BNB with its competitors and peers in the crypto space, such as other wrapped tokens, Binance Coin (BNB), Ethereum (ETH), etc. This can help assess the relative strengths and weaknesses of WBNB and its potential market share and demand in the future.
- Following the latest developments and updates from the Binance Smart Chain team and the WBNB project itself. This can include new features, partnerships, integrations, upgrades, security audits, etc., that can affect the functionality and usability of WBNB and its related DApps.
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Conclusion
Cryptocurrencies such as WBNB and wrapped tokens improve interactions in the cryptocurrency and decentralized finance (DeFi) ecosystem. Wrapped tokens create a world with greater capital efficiency and allow applications to share their network liquidity. CrowdSwap has made it possible for its users to seize the possibilities with WBNB by launching WBNB/CAKE and BUSD/WBNB liquidity pools. Click here to launch the app and start your pleasant DeFi journey with these traders ‘ Programs.
