Binance Smart Chain (BSC) is now the BNB chain. BSC, the layer 1 blockchain of cryptocurrency exchange Binance, recently announced the merger of Binance Smart Chain and Binance Chain to form BNB Chain. The relaunch of Binance’s Layer 1, or base, blockchain is part of a plan to expand and establish decentralization by linking it to the protocol’s governance token (BNB).
“People always think BSC is part of Binance because it carries the company’s name,” Binance CEO Changpeng Zhao said. “We’ve done a lot of work to decentralize it and hopefully make BNB surpass Binance,” he added.
To date, Binance has invested over $1 billion in the BSC ecosystem to support its continued and intense competition with the Ethereum network and other layer 1 blockchain systems. This effort hopes to alleviate criticism that the Balanced Scorecard is too centralized.
Binance envisions positioning BNB as the token of the BSC ecosystem, which serves multiple sectors, including GameFi and the non-fungible token (NFT) industry. This should help make BNB crucial to the eventual development of Binance’s so-called “MetaFi.”
What is BNB chain?
According to Binance CEO Changpeng Zhao, "BNB" is the abbreviation of "Build 'N Build". In a tweet, Zhao shared that “BNB stands for ‘build community, let community build, build, ‘n build’.”
Recent releases of BNB Chain include the BNB Beacon Chain and BNB Smart Chain for BNB Chain governance (i.e. staking and voting), which remains compatible with the Ethereum Virtual Machine (EVM).
The BNB chain aims to increase interoperability and develop the underlying infrastructure for a “world’s parallel virtual environment,” a step forward in Binance’s recent MetaFi efforts.
BNB Chain promises users:
What is Binance Smart Chain?
The first blockchain developed by Binance was called Binance Chain. But it has some programmability limitations. To solve these problems, Binance Smart Chain came into being. The blockchain network called Binance Smart Chain is designed for use with smart contract-based applications.
Since BSC runs concurrently with Binance’s native Binance Chain, providing powerful trading capabilities, users can benefit from the best of both worlds. Additionally, the Ethereum Virtual Machine is implemented by BSC, enabling it to execute Ethereum-based applications.
The goal of the platform is to allow developers to create decentralized applications (DApps) and help users manage their digital assets across chains in a high-volume, low-latency manner. As mentioned earlier, BSC was later renamed to the BNB chain. Read on to learn about the evolution of Binance Smart Chain.
The evolution of Binance Smart Chain
Binance and BNB were founded in 2017, while BSC was launched three years later. As Binance grows in popularity, so does BSC. BSC was founded at the beginning of the DeFi movement. Over time, as public interest in alternative financial solutions has grown, so have the use cases for blockchain technology.
According to Binance, the BNB token has continued to grow since its debut. It was originally created as an ERC-20 token on the Ethereum network in 2017. By 2019, it switched to Binance Chain and facilitated the establishment of the BSC network, which officially launched in September 2020.
Due to the token’s growth on BSC, Binance now considers BNB as a token for the larger ecosystem, including Binance Chain and BSC. The move is part of the cryptocurrency giant’s efforts to overtake Binance. BNB is now the token of BNB Chain.
BNB vs. Binance Smart Chain
Binance Chain (BNB Chain Governance), which conducts staking and voting, has changed its identity to the BNB Beacon Chain under the renamed BNB Chain umbrella. Binance Smart Chain supports multiple blockchains and is compatible with EVM, referred to as BNB Smart Chain, or BSC.
In other words, the BNB chain has its own dynamic ecosystem together with BSC. The idea behind BNB is that eventually everyone will have it, which is why it must be made accessible to people. Additionally, BNB (formerly known as Binance Coin) serves as the governance token used to pay gas fees on the BNB chain.
Most importantly, BNB Chain remains a decentralized, open source, and community-driven ecosystem whose health depends on the help of its developers, user community, validators, and delegators. In addition, large applications such as SocialFi, GameFi, and Metaverse will be embraced by BNB Chain.
BNB Token and BNB Ecosystem
The BNB token now stands for “Build and Build”. BNB is the cryptocurrency that fuels the BNB Chain ecosystem and is the native token of the BNB Beacon Chain and BNB Smart Chain. In addition to providing fuel for transactions on the BNB chain, it also acts as a governance token, much like gas on Ethereum.
Participating in BNB Chain’s decentralized on-chain governance requires BNB ownership. In addition to the rebrand, more advancements for BNB were announced, including technology upgrades to further enable decentralization. Such improvements are expected to benefit the community of users, developers, and projects.
Some of the upgrades announced by Binance include:
Creation of BNB automatic destruction, a new protocol that is both verifiable and objective
v1.1.5. Bruno hard fork upgrade increases BNB burning rate
You can trade BNB like any other cryptocurrency, and you can use it in a variety of applications and use cases, including reducing Binance exchange transaction fees, paying transaction fees through BNB Chain, and purchasing goods and services online and in-store .
The BNB Chain ecosystem’s dual-chain architecture enables interoperability through native BNB tokens that support BEP-20 and BEP-2 token standards. But what differentiates one from the other?
BEP-2 is the token standard of BNB Beacon Chain, while BEP-20 standardizes the tokens on BSC. The BEP-20 token standard is often compared to Ethereum’s ERC-20 tokens because they are very similar in many ways.
To summarize, the BEP-20 token standard is used to produce cryptocurrency tokens for the BNB Smart Chain, while the BNB Beacon Chain uses the BEP-2 standard.
BNB’s goals
Following the BSC rebrand, there are several improvements available to users, project owners, and developers in the BNB Chain community. Large applications such as Metaverse, GameFi, and SocialFi will also soon be connected to BNB Chain.
Other key improvements to the BNB chain include:
In their announcement, Binance also emphasized that “BNB Chain remains a community-driven, open-source, and decentralized ecosystem.”
How to use BNB Chain
Binance maintains that BNB has many use cases within and outside the BNB Chain ecosystem. On its website, BNB Chain divides BNB’s use cases into the following categories – payments, travel, entertainment, services and finance.
Binance ecosystem transaction fees and more
BNB is widely used to pay transaction fees. According to Binance, there are more than 127 billion transactions on the Binance exchange platform alone, and approximately 2 million users have used BNB to pay transaction fees for more than 40 million BNB.
Using BNB to pay standard trading fees on Binance Exchange will allow users to enjoy special discounts. Currently, every trade made on the exchange incurs a 0.1% fee, payable using trading assets or BNB. Additionally, traders who primarily rely on Binance are encouraged to purchase BNB to save on trading fees.
To buy BNB on Binance exchange, follow these steps:
Go to your profile.
Access your dashboard.
Navigate to your trading fee level.
Turn on the button "Pay with BNB (25% discount)".
You can also use BNB outside of the Binance trading platform, as the cryptocurrency powers various applications running on the Binance DEX on the Binance Beacon Chain and the BNB Smart Chain.
Here are other ways to use BNB in the Binance ecosystem:
Pay for goods and services online and in-store using your Binance Card or Binance Pay
Participate in Binance Launchpad’s Token Sale
Donate on Binance Charity
Provide liquidity for Binance Liquid Swap
pay
Users can use BNB to pay for goods, purchase virtual gifts, etc. Integrations listed on the BNB page include Pundi X, CoinGate, Monetha, and more.
trip
You can use BNB to pay for flights, hotel bookings, and other travel amenities through TravelbyBit, Trip.io, and Travala.com.
entertainment
Users can use BNB on multiple integrated platforms such as VIBE, allowing them to earn BNB from games. They can also use cryptocurrency to purchase music rights through virtual lands on MachiX or Axie Infinity (AXS).
Serve
BNB has many other practical uses, including hiring freelancers, creating smart contracts, accessing torrents, and paying for cloud or web server subscriptions.
finance
BNB can also be used to apply for loans, trade stocks, buy investments, and share bills and expenses with others through financial apps such as ETHLend, NAGA, Moeda, LNDR, and Nexo.
meta network
BNB Chain also contributes to the development of MetaFi.
MetaFi is a combination of “meta” (for “meta-ecosystem”) and “Fi” (for “DeFi”), bringing together multiple projects such as Metaverse, GameFi, DeFi, Web3, SocialFi, and NFTs under one tent.
MetaFi combines a wide range of blockchain capabilities in a single meta-ecosystem through metadata that defines asset ownership. Interoperability is possible thanks to metadata standards used across platforms and blockchains.
In line with MetaFi’s tagline “Think BNB Chain, Think MetaFi,” BNB Chain aims to promote innovation in MetaFi by developing a robust and interoperable project with multi-chain capabilities and bridges to help handle large amounts of assets and data transfers.
Through BNB Chain, a community of creators, developers, and entrepreneurs can build infrastructure that enables the world’s parallel virtual ecosystems to run seamlessly.
Advantages and Disadvantages of BNB Chain
No application is perfect, and BNB Chain is no exception. While it offers low transaction fees, rapid adoption, bridging capabilities, sufficient funding, and localization, some are concerned that the chain is centralized, with complex and resource-consuming node operations and verification processes, and related innovations occur in Ethereum while Not its own environment.
The future of BNB chain
In addition to the growing focus on MetaFi, the BNB chain also announced additional technical advancements planned for the remainder of 2022, including the introduction of a BSC application sidechain and a new BSC shard chain.
BNB Chain’s tweet “The future is decentralized” explains the difference between Web2 and Web3 and what Web3 means for it moving forward.
