The Evolution of BNB Chain
Marcel Deeron August 22, 2022.
BSC, Binance’s layer-1 blockchain, announced merging the BSC and the Binance Chain, forming the new and improved BNB chain. The idea is to link Binance’s layer-1 to the protocol’s token, BNB, to further expand, support, and facilitate decentralization.
BSC is typically considered a part of Binance—after all, it’s right in the name. CEO Changpeng Zhao has stated, "We’ve done a lot of work to decentralize it and hope to make BNB go far beyond Binance."
Binance has invested over $1 billion in the BSC ecosystem. These investments amplify the rivalries between Ethereum and other layer-1 blockchain systems and are intended to stop the criticism surrounding BSC being "too centralized".
BNB wants to be a token for the BSC ecosystem. This ecosystem serves multiple sectors, including the NFT industry and GameFi. Doing all of this should help BNB become more relevant and beneficial concerning the development of MetaFi.
BNB: Built Better
As Binance rapidly grew in popularity, so did BSC. The Binance smart chain was created about the same time the DeFi movement took off. Public interest grew over time, along with financial solutions gaining interest. Blockchain technology was also rising in popularity, and the stars seemingly aligned for BNB.
The BNB token was created as an ERC-20 token on Ethereum in 2017, continuously evolving and transforming. The token switched to the Binance Chain in 2019 and supported the BSC network, which launched in September 2020. BNB is the current token for the BNB Chain.
After the BSC name change, several improvements were made accessible to project owners, developers, and users connected to the BNB Chain community. The chain plans to incorporate more prominent applications like GameFi, Metaverse, and SocialFi.
A few key improvements to the BNB chain include:
- The introduction of on-chain governance mechanisms
- Boosted BSC throughput
- One-chain to multichain scaling
- Overall improved scaling solutions
- Expanding the BSC validator set, including 20 validators acting as block producers
What Should Users Expect From BNB?
According to CEO Changpeng Zhao, BNB is an acronym for "build n' build". One of Zhao’s tweets stated that BNB also metaphorically translates to "build the community, and let the community build, build, n’ build".
Freedom, lack of limitation, and general empowerment are what BNB is all about. It also ties into interoperability and development of the world's "parallel virtual environment", pushing Binance forward in regard to the MetaFi movement.
Here are some of the key features of the BNB Chain:
- A space for creators and investors alike
- Bigger than Binance
Besides a heightened focus on MetaFi, the BNB Chain also stated a few more technological advances are underway for 2022 and onward. This includes the introduction of BSC Application Sidechains and BSC partition chains.
How to Utilize the BNB Chain
The BNB Chain suggests use-cases for BNB on their website. They include travel, payment, entertainment, service, and finance. Perhaps the most popular reason is paying transaction fees. Binance claims that around 2 million users have used the trading platform to pay for trading fees totaling 40 million BNB on over 127 billion deals.
Each trade made on the exchange will incur a 0.1% fee, payable via traded assets or BNB. In addition, traders who rely on Binance are encouraged to purchase BNB to save more on transaction fees.
BNB can be used to:
- Pay for goods, buy virtual gifts, and more. Integrations include Monetha, CoinGate, and Pundi X.
- Book hotels and airfare, among other travel amenities, via Trip.io, Travala.com, or TravelbyBit.
- Purchase entertainment. Integrated platforms, such as VIBE, allow users to earn BNB from games. You can also use BNB to purchase the copyright to music through MachiX and others.
- Pay for services such as hiring freelancers, creating smart contracts, and paying for web or cloud subscription services.
- Obtain financial services such as trading stocks, taking out loans, and purchasing investments.
BNB Pros & Cons
No applications, platforms, projects, or people are perfect. The BNB chain is no exception. While fast adoption, low fees, a bridging feature, plenty of funding, and localization are all positives about BNB, there are also a few concerns.
For example, a portion of the community worries that the chain is too centralized and over-complex, and has resource-consuming operations and processes. Also, similar innovations are already occurring on Ethereum instead of its designated network.
The future is decentralized, and that is something we can almost count on. The rapid interest in the crypto and DeFi space is indisputable. This industry is gaining new traction daily, with more developers, creators, and users reaching new heights and breaking glass ceilings. We can see this in the differences between Web2 and Web3, and we will likely see this pattern continue.