In this article, we will explore BNB Chain and figure out what is what. The article will be particularly useful for newcomers to the exchange, while veterans may also learn something new.
BNB Chain is a decentralized blockchain ecosystem aimed at providing a reliable infrastructure for the Web-3 economy, utilizing a deflationary tokenomics model backed by regular burning of excess tokens. BNB Chain offers users a vast array of tools and features for both exploring DeFi and developing dApps.
A brief history.
BNB Chain, which was previously called Binance Chain, was created in 2019 based on the utility token $BNB by migrating it from the Ethereum network. This historical version of BNB Chain is now called BNB Beacon Chain.
In 2020, BNB Smart Chain (formerly Binance Smart Chain) was created as a new blockchain to run parallel to the BNB Beacon Chain, which brought new features through the application of EVM-compatible smart contracts, resulting in a record growth of dApps and services on the blockchain.
In 2022, BNB Beacon Chain and BNB Smart Chain merged into a single ecosystem called BNB Chain, however, the networks continued to operate separately, providing different functionalities:
BNB Beacon Chain was responsible for governance with staking and voting, using the BEP-2 token standard;
BNB Smart Chain provided an EVM-compatible layer with dApps, DeFi services, multi-chain support, and other Web3 solutions, using the BEP-20 token standard.
In December 2023, the BNB CHAIN team announced the discontinuation of support for BNB Beacon Chain and the implementation of its functions into BNB Smart Chain.
Since then, the ecosystem has significantly evolved and complicated, and today it includes BNB Greenfield and the second-layer solution opBNB.
Management of the ecosystem and tokenomics
Strangely enough, Binance does not control BNB Chain, while some perceive this ecosystem as just another product of the exchange, but that is not the case.
BNB Chain is a decentralized and independent structure that operates based on community governance, allowing anyone to become a network validator through BNB staking.
The deflationary model of the system's tokenomics means that there is a continuous automatic burning of excess tokens, the amount of which is adjusted quarterly, depending on the price and the number of blocks. For example, in the first quarter of 2025, 1.94 million BNB was burned for an approximate amount of $1.17 billion. Additionally, under the BEP-95 standard, part of the gas fees is automatically burned with each block, and the target volume of tokens gradually decreases from 200 million to 100 million.
BNB Greenfield
BNB Greenfield is a decentralized data storage. It is a blockchain network level built on Cosmos/Tendermint infrastructure, which ensures network security through a Proof of Stake approach, where validators play a crucial role in achieving consensus and managing the network.
Storage providers are infrastructures provided by organizations or individuals responsible for answering user queries regarding data uploads and downloads, and they act as controllers of user rights. Users send their requests for data storage, and storage providers are responsible for maintaining off-chain data.
opBNB
opBNB is a level 2 scaling solution that uses Optimism OP to enhance the performance of BNB Smart Chain. This solution provides scalability of up to 5-10 thousand transactions per second and low fees.
The overall architecture of BNB Chain provides a balance between scalability (block time 0.75 seconds after the Maxwell update) and decentralization, although the total number of validators is still less than in Ethereum.
BNB
Now a bit about the BNB token and its role in this whole story. BNB, today, is a multi-chain utility token with deflationary mechanisms, governance rights, and deep integration into one of the largest crypto ecosystems. Starting as a simple exchange token for discounts back in 2017, today it is one of the key elements of the Web3 universe and a valuable asset for those who entered the cryptocurrency world for the long haul.
I hope you found it interesting, until we meet again 🫱🏼🫲🏻
