BNB (Binance Coin) and BNB Chain are among the key pillars of the Binance ecosystem, which has established itself as a leader in the cryptocurrency world. Thanks to its flexibility, functionality, and continuously evolving solutions, BNB has become one of the most important tools in the global blockchain-based financial system. This guide will analyze all aspects related to BNB and the BNB Chain network.
The history and evolution of BNB and BNB Chain
It all began in 2017 when Binance—a then-young cryptocurrency exchange—launched its native token Binance Coin (BNB). The token was designed as an ERC-20 token on the Ethereum blockchain, meaning it utilized Ethereum’s infrastructure. At the time, its primary purpose was to reduce transaction fees on the Binance exchange for its users. The BNB Initial Coin Offering (ICO) was a huge success, raising $15 million in Bitcoin and Ethereum. These funds were allocated to platform development, marketing, and reserves.
The launch of Binance Chain (2019)
Binance’s growing popularity required more efficient infrastructure. In April 2019, Binance launched its own blockchain—Binance Chain. Along with this move, Binance Coin was migrated from the Ethereum network to the new network and became the native token of Binance Chain.
Binance Chain focused on speed and simplicity, enabling the issuance of digital assets and fast transactions. However, it did not support smart contracts, which limited its use.
The creation of Binance Smart Chain (2020)
September 2020 marked another breakthrough. Binance launched Binance Smart Chain (BSC), a blockchain operating parallel to Binance Chain. BSC introduced support for smart contracts and compatibility with the Ethereum Virtual Machine (EVM). This allowed developers to migrate their decentralized applications (DApps) from Ethereum to Binance Smart Chain without modifying the code.
The merger into BNB Chain (2022)
In February 2022, Binance integrated Binance Chain and Binance Smart Chain into a single ecosystem—BNB Chain. It was divided into two main layers:
- BNB Beacon Chain: responsible for network governance (staking and voting).
- BNB Smart Chain: handling smart contracts, DApps, and DeFi services.
This merger enabled the creation of a more comprehensive ecosystem with advanced functionalities.
Structure and operation of BNB Chain
BNB Chain is a modern blockchain ecosystem that combines speed, flexibility, and compatibility with other networks. Its structure includes two main components:
BNB Beacon Chain
BNB Beacon Chain, formerly known as Binance Chain, is responsible for network governance and ensuring operational efficiency.
Key functions:
- staking: users can lock their BNB tokens to participate in the consensus mechanism and earn rewards
- governance: the network allows voting on key decisions regarding its development
- token issuance: the BEP-2 standard enables the issuance of digital assets.
BNB Beacon Chain is based on the Proof of Stake (PoS) mechanism, which is more energy-efficient compared to traditional methods such as Proof of Work used by Bitcoin.
BNB Smart Chain
BNB Smart Chain is a parallel network that introduced smart contract functionality and interoperability with Ethereum.
Features of BNB Smart Chain:
- Proof of Staked Authority (PoSA): a consensus mechanism combining features of PoS and Proof of Authority (PoA), ensuring fast transaction execution
- compatibility with EVM: allows developers to create DApps without changing their technology
- low transaction fees: significantly lower than on Ethereum, attracting DeFi and NFT projects
- block generation time: approximately 5 seconds.
BNB token—applications and significance
BNB serves multiple purposes in the Binance ecosystem. As a utility token, it is used for:
- paying transaction fees on Binance Smart Chain and Binance Beacon Chain
- staking to earn rewards
- paying for products and services from merchants who accept BNB.
DeFi and yield farming
BNB plays a key role in decentralized finance (DeFi). Users can stake their BNB tokens, participate in yield farming, and use platforms such as PancakeSwap or Venus.
The token burn mechanism
A unique aspect of BNB is its automatic token burn mechanism. Binance regularly removes a portion of BNB from circulation to control supply and potentially increase the token’s value over time.
The future of BNB Chain and planned changes
The BNB Chain team has announced plans to migrate BNB Beacon Chain functions to BNB Smart Chain, aiming to simplify infrastructure and improve network performance. This process, known as BNB Chain Fusion, began in April 2024 and concluded in June of the same year.
Development of Web3 and decentralized data storage
BNB Chain is advancing Web3 solutions, such as:
- opBNB: a layer-2 solution enhancing network scalability
- BNB Greenfield: a decentralized data storage platform.
Advantages and disadvantages of using BNB Chain
Advantages:
- Speed: faster transaction processing compared to other blockchains.
- Low costs: transaction fees are among the lowest on the market.
- EVM compatibility: easy migration of applications from Ethereum.
- Community support: rich documentation and an active developer community.
Disadvantages:
- Lower decentralization: the PoSA mechanism requires trust in validators.
- Regulatory challenges: Binance faces legal issues in various countries.
- Competition: other blockchains, such as Ethereum, offer more advanced functionalities.
How to get started with BNB Chain?
Step 1: Create a wallet
Register on a platform supporting BNB, such as Trust Wallet or MetaMask. A wallet will allow you to manage tokens and use DApps.
Step 2: Buy BNB
Purchase BNB tokens on an exchange such as Binance and transfer them to your wallet. Ensure you use a secure connection.
Step 3: Explore DApps
Use DeFi platforms like PancakeSwap, stake BNB tokens, or explore NFTs.
Summary
BNB Chain is a comprehensive blockchain ecosystem offering low fees, fast transactions, and extensive development opportunities for developers. Binance Coin (BNB) is a key component of this system, supporting transactions, staking, and DeFi applications. If you want to invest in BNB, our Bitcoin Quark exchange guarantees fast, secure transactions with the lowest fees on the market. Start your cryptocurrency journey today!
FAQ
What is BNB from BNB Chain?
BNB is the native utility token of the BNB Chain network, originally created by Binance.
How does BNB Chain work?
BNB Chain consists of BNB Beacon Chain and BNB Smart Chain, which together offer fast transactions and smart contract capabilities.
How can I buy BNB?
BNB can be purchased on cryptocurrency exchanges such as Binance or through the Bitcoin Quark exchange.
Is BNB better than Ethereum?
BNB offers lower fees and faster transactions, but Ethereum is more decentralized and has broader support for advanced applications.
What is the BNB burn mechanism?
The BNB burn mechanism reduces its total supply, which can influence the token’s value growth.
