Better Crypto Buy: Chainlink vs. BNB

Key Points

• Chainlink provides data to many different blockchains, for a price.

• BNB is the internal currency of Binance's crypto exchange.

• Both of these coins are going to be around for quite a while.

• 10 stocks we like better than Chainlink ›

Chainlink (CRYPTO: LINK) and BNB (CRYPTO: BNB) are about as different as two cryptocurrencies can be. Whereas Chainlink is a data oracle coin, BNB is the native token of the Binance cryptocurrency exchange's blockchain.

The question for investors here is, between these two coins, where can value compound more broadly over time?

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Chainlink is a sector growth play with a working revenue loop

Chainlink's core job is to bring real-world data onto blockchains and move messages and tokens across them.

That makes it an indispensable piece of infrastructure for the entire crypto sector, as many different applications require a structured data import functionality for the backend. Its data catalog covers price feeds, proof-of-reserves, and macroeconomic stats. Plus, it also offers CCIP, a cross-chain interoperability protocol that lets applications ship tokens and messages from one chain to another.

The investment thesis for buying begins and ends with its impressive fee flywheel. Decentralized applications (dApps) pay user fees for Chainlink data oracle services. Those fees support its node operators and, via staking, the network's security. As more apps integrate data feeds, more fees show up to fund the development of more data services, which attracts more apps, and also a wider variety of them.

Importantly, CCIP's billing model lets developers pay a single fee denominated in LINK on the chain where the data gets used, thereby significantly simplifying cost predictability and making the service easier to adopt at scale, as well as across blockchains. This scheme also ensures that projects operating on multiple chains can keep the portion of their working capital that's used to pay data fees distributed based on data usage. App deployments on smaller or less-used networks are less economically burdensome as a result, lowering the barrier for cross-chain expansion.

There is evidence the core value generation loop is working. Chainlink is the category leader by revenue in the crypto interoperability segment, generating $9.6 million in revenue over the last three years. Furthermore, large financial institutions have tested or used Chainlink to move and verify fund data across chains, and the U.S. government is even using it to publish economic data to the blockchain now.

Chainlink's neutral, multi-chain posture positions it to earn fees wherever activity shows up, rather than betting on one chain's success. That makes it resilient, and it will be exposed to a lot of growth over the coming years as well.

BNB is powerful inside its walls, but limited outside

BNB is the utility token for the Binance exchange's ecosystem. Holders use it for trading fee discounts on Binance, and as the gas fee asset on the BNB Smart Chain, and also for its layer-2 (L2) chains. So right off the bat, this coin's chosen field of competition is fairly constrained, as the Binance ecosystem is almost entirely dedicated to providing crypto exchange services.

BNB's tokenomics include ways to burn tokens and thus increase the value of it for holders. There's an auto-burn mechanism, which aims to reduce supply over time toward a 100 million BNB target, and a real-time fee burning mechanism that's based on activity on the network. As of today, the circulating supply is near 139 million, implying there is still a meaningful path to the stated supply target, so new buyers would benefit from this process playing out over time, assuming it continues.

The strategic challenge here, as stated before, is that most of BNB's utility is bounded by Binance's footprint.

While it's true that Binance is a systemically important crypto exchange platform, and a titan within the space, the coin's growth fully depends on continued adoption of BNB Chain and its L2s, plus the durability of trader-targeted benefits like trading fee discounts on Binance itself. And the BNB Chain, while effective at being a platform for the needs of Binance's exchange, is not itself a network with any notable competitive advantages, despite its decently fast settlement times and relatively low usage fees.

Plus, its inseparable relation with Binance itself carries plenty of idiosyncratic risk. In late 2023, Binance entered a $4.3 billion settlement with U.S. authorities, agreeing to extensive compliance reforms, and its founder, Changpeng Zhao (more famously known as CZ) later received and served a short prison sentence in 2024.

The exchange is still on questionable legal footing in the U.S., and suspended its operations there in late 2024.

The verdict

Could BNB still surprise to the upside if you buy it now? It's possible, if the growth of the crypto exchange leads to more on-chain activity, which then accelerates fee-based burns. But in comparison to Chainlink's chain-agnostic fee capture across many ecosystems, BNB's upside is structurally tied to a single brand and stack.

Chainlink's business model lets it monetize wherever crypto grows, and its fee flywheel is already spinning. BNB remains compelling for believers in Binance's platform, but its opportunity set is far narrower and carries more single-ecosystem risk, as well as legal risks.

Therefore, Chainlink is the better long-term buy for investors seeking exposure to crypto's broadening utility rather than a single venue's expansion.

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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chainlink. The Motley Fool has a disclosure policy.