Wrapped BNB

Wrapped BNB (WBNB) is an ERC-20 token that is pegged to Binance Coin (BNB), the native token of the Binance exchange. The purpose of WBNB is to allow Binance Coin to be used on the Ethereum blockchain and enable liquidity between Ethereum and Binance Smart Chain.

When a user sends BNB to the WBNB smart contract, the contract mints an equivalent amount of WBNB tokens and sends them to the user's address. These WBNB tokens can then be freely traded on Ethereum-based decentralized exchanges (DEXs) and other blockchain protocols that support ERC-20 tokens.

To redeem their WBNB for BNB, users can simply send their WBNB tokens back to the WBNB smart contract, which will burn the tokens and release the equivalent amount of BNB to the user's address. This process is fully automated and seamless, allowing users to switch between Binance Smart Chain and Ethereum with ease and without having to leave their assets idle on one chain.

WBNB has become a popular tool for traders looking to leverage the liquidity of both Binance Smart Chain and Ethereum, as it allows them to move their assets back and forth between the two chains quickly and efficiently. It has also been used as collateral for borrowing and lending on various DeFi platforms.

The price of WBNB is generally closely tied to that of BNB, as the two tokens are directly linked through the underlying smart contract. However, market forces such as supply and demand, trading volume, and market sentiment can also influence the price of WBNB on Ethereum-based DEXs.

Overall, Wrapped BNB provides a valuable bridge between Binance Smart Chain and Ethereum, enabling users to seamlessly move their assets between the two chains and access a wider range of decentralized finance applications and services.