Wrapped Binance Coin (WBNB)

Last reviewed: June 10, 2026

Wrapped [Binance Coin](/wiki/binance_coin) (WBNB) is a tokenized version of Binance Coin (BNB) that exists on [blockchains](/wiki/blockchains) other than Binance's native blockchain. WBNB allows BNB to be used in decentralized applications (dApps) and on platforms that do not natively support BNB. This wrapped token maintains a 1:1 peg with BNB, ensuring that each WBNB token is backed by an equivalent amount of BNB held in reserve. As of October 2023, WBNB is widely used in [decentralized finance (DeFi) applications](/wiki/decentralized_finance_defi_applications), enabling users to leverage BNB's value across various blockchain ecosystems.

Overview

Wrapped Binance Coin (WBNB) is a digital asset that represents Binance Coin (BNB) on non-native blockchains. It is an example of a "wrapped" token, which is a cryptocurrency token that is pegged to the value of another cryptocurrency. WBNB allows users to utilize BNB on platforms that do not support Binance's native blockchain, such as Ethereum. This interoperability expands the utility of BNB, enabling it to participate in decentralized finance (DeFi) applications, smart contracts, and other blockchain-based services.

How it works

WBNB operates through a process known as "wrapping," which involves locking BNB in a smart contract and issuing an equivalent amount of WBNB on another blockchain. The smart contract ensures that each WBNB token is backed 1:1 by BNB. When users wish to convert their WBNB back to BNB, the process is reversed: WBNB is burned, and the equivalent amount of BNB is released from the reserve.

Smart Contracts

The use of smart contract technology is crucial for the operation of WBNB. These contracts automate the wrapping and unwrapping processes, ensuring transparency and security. They also maintain the 1:1 peg by managing the reserve of BNB that backs the WBNB tokens.

Applications

WBNB is primarily used in decentralized finance (DeFi) applications, where it enables users to leverage the value of BNB across various blockchain ecosystems. Some common applications include:

- Liquidity Provision: Users can provide liquidity in decentralized exchanges (DEXs) using WBNB, earning fees in return.
- Lending and Borrowing: Platforms allow users to lend their WBNB to earn interest or borrow against it.
- Yield Farming: WBNB can be used in yield farming strategies to earn additional cryptocurrency rewards.

USDT">Relationship to USDT

While WBNB and Tether (USDT) are both tokenized assets, they serve different purposes. USDT is a stablecoin pegged to the US dollar, providing a stable value for transactions and savings. In contrast, WBNB is a wrapped token that extends the utility of BNB across different blockchains. Both assets enhance liquidity and interoperability in the cryptocurrency ecosystem, but they cater to different use cases and user needs.

Advantages and disadvantages

Advantages

- Interoperability: WBNB allows BNB to be used on multiple blockchains, increasing its utility.
- DeFi Participation: Enables BNB holders to participate in DeFi applications and earn rewards.
- Liquidity: Enhances liquidity by allowing BNB to be traded on platforms that do not support its native blockchain.

Disadvantages

- Centralization Risk: The wrapping process involves a degree of centralization, as it relies on custodians to hold the BNB reserves.
- Smart Contract Risk: The security of WBNB depends on the integrity of the smart contracts used in the wrapping process.
- Market Volatility: While WBNB maintains a 1:1 peg with BNB, the value of BNB itself can be volatile.

Sources

- CoinDesk.com)
- CoinTelegraph
- Tether.to

Categories: Stablecoins | Decentralized Finance

Last updated: June 10, 2026