Binance
The Binance Smart Chain (BSC) is now the BNB Chain. BSC, crypto exchange Binance’s layer-1 blockchain, recently announced the merger of the Binance Smart Chain and the Binance Chain to form the BNB Chain. The relaunch of Binance’s layer-1 or base blockchain is part of a plan to link it to the protocol’s governance token –– BNB — to expand and build on decentralization.
'People always think of BSC as part of Binance because it carries the company’s name,' said Binance CEO Changpeng Zhao. 'We’ve done a lot of work to decentralize it and hope to make BNB go beyond Binance,' he added.
To date, Binance has invested more than $1 billion in the BSC ecosystem to support its ongoing and intensifying rivalry with the Ethereum network and other layer-1 blockchain systems. The effort hopes to alleviate criticisms regarding BSC being overly centralized.
Binance envisions positioning BNB as a token for the BSC ecosystem, which serves several sectors, including GameFi and the non-fungible token (NFT) industry. That should help make BNB essential to the eventual development of what Binance calls 'MetaFi.'
According to Binance CEO Chanpeng Zhao, 'BNB' is an abbreviation for 'Build ’N Build.' In a tweet, Zhao shared that 'BNB stands for "Build the community, and let the community build, build, ’n build."'
The recently released BNB Chain comprises the BNB Beacon Chain for BNB Chain governance (i.e., staking and voting) and the BNB Smart Chain, which remains Ethereum Virtual Machine (EVM) compatible.
The BNB Chain aims to increase interoperability and develop the underlying infrastructure of the 'world’s parallel virtual environment,' a step forward in Binance’s recent MetaFi efforts.
The BNB Chain promises users that it will be:
Key features of the BNB Chain
The first blockchain developed by Binance was called Binance Chain, but it had some programmability restrictions. Thus, the Binance Smart Chain was developed to work out the kinks of the initial blockchain.
The platform's goal was to allow developers to create decentralized applications (DApps) and help users manage their digital assets cross-chain in a high-capacity, low-latency manner.
BSC runs congruent with Binance's native Binance Chain, which allows users to enjoy great transaction capacity and benefit from the best of both worlds. On top of this, BSC implemented the Ethereum Virtual Machine, enabling it to execute Ethereum-based applications.
Binance and BNB were established in 2017, while BSC was introduced three years later. As Binance gained popularity, naturally BSC did as well. Over time, as public interest in alternative financial solutions grew, the use cases of blockchain technology also increased.
According to Binance, the BNB token has continuously evolved since its debut. It was initially created as an ERC-20 token on the Ethereum network in 2017. But by 2019, BNB migrated to the Binance Chain and fueled the establishment of the BSC network, which officially launched in September 2020.
As a result of the token’s growth on BSC, Binance now considers BNB as the base layer coin for a greater ecosystem, including the Binance Chain and BSC. This move is part of the crypto giant’s effort to grow beyond Binance. BNB now serves as the native currency of BNB Chain.
The two chains work in harmony to create a greater, more powerful ecosystem. The Binance Chain hosts staking and voting (BNB Chain Governance), while the Binance Smart Chain supports several blockchains and is compatible with the EVM. Together, the two live under the rebranded 'BNB Chain' umbrella.
That said, together with BSC, BNB Chain has a dynamic ecosystem of its own. The idea behind BNB is that eventually, everyone will own it, which is why it must be made as accessible as possible. Furthermore, the BNB coin acts as a governance token and is used for paying gas fees on BNB Chain.
Above all, BNB Chain continues to be a decentralized, open-sourced and community-driven ecosystem whose health depends on the assistance of its developers, community of users, validators and delegators. Furthermore, BNB Chain embraces large-scale applications like SocialFi, GameFi and the metaverse.
BNB is the cryptocurrency that fuels the BNB Chain ecosystem and the native coin of both the BNB Beacon Chain and the BNB Smart Chain. It also serves as a governance token, apart from fueling transactions on the BNB Chain, much like gas on Ethereum.
BNB ownership is required for participation in the BNB Chain decentralized on-chain governance. Alongside the rebranding, more advancements to BNB have also been announced, including technical upgrades to realize decentralization further. Such improvements are expected to benefit the community’s users, developers and projects.
Some of the upgrades Binance announced are:
- The creation of BNB Auto-Burn, a new protocol that is both verifiable and objective
- The v1.1.5. Bruno hard fork upgrade that increased the burn rate of BNB
You can trade BNB like any other cryptocurrency and also use it in various apps and use cases, including reducing Binance exchange trading fees, paying for transaction fees made via the BNB Chain, and purchasing goods and services online and in-store.
BNB Chain's dual-chain architecture enables interoperability through the native BNB coin, which powers the BEP-20 and BEP-2 token standards. But what distinguishes one from the other?
BEP-2 is the BNB Beacon Chain’s token standard, enabling developers to produce cryptocurrency tokens for the Binance Smart Chain, while BEP-20 regulates tokens on BSC. The BEP-20 token standard is frequently compared to Ethereum’s ERC-20 token since they are pretty similar in many aspects.
Following the BSC name change, some improvements were made available to users, project owners and developers connected to the BNB Chain community. Large-scale applications like Metaverse, GameFi, SocialFi and others will soon be incorporated into the BNB Chain.
Other key improvements made to the BNB chain include:
Key improvements made to the BNB chain
In their announcement, Binance also underscored that 'the BNB Chain remains a community-driven, open-source and decentralized ecosystem.'
Last modified 1yr ago