Binance Smart Chain: Everything You Need To Know
Binance is an Ethereum-compatible blockchain ecosystem that emerged as a major force in the NFT, DeFi and alternative economy movements that have grown over the last few years. Its flagship is Binance Exchange, the world’s largest cryptocurrency marketplace by trading volume.
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But the heart of the Binance network is the Binance Smart Chain, the software system that has attracted developers from all over the world as the preferred platform for creating web3 infrastructure.
The grease in the Binance Smart Chain machinery is BNB, the ecosystem’s native gas token. You can buy BNB just like any other cryptocurrency — but because of its association with the Binance Smart Chain, it’s different than all the other digital coins on the market.
Here’s what you need to know.
What Is Binance Smart Chain?
Binance Smart Chain (BSC) is the name of Binance’s layer-1 blockchain. According to Binance Academy, layer 1 refers to a base blockchain that can independently validate and finalize transactions. Others include Bitcoin, Ethereum and Solana.
In February, BSC announced that it was merging with Binance Chain to become BNB Chain, a sprawling network of developers and software that will focus on building Web 3.0 infrastructure.
BNB Chain is a community-supported blockchain project that strives for greater decentralization and blockchain innovation. According to CoinTelegraph, Binance Smart Chain emerged as a popular Ethereum alternative when ETH was suffering from issues dealing with gas fees and network congestion.
BNB Chain will unify all of its web3 development — including metaverse, NFTs, web3, DeFi, SocialFi and GameFi — into a concept called MetaFi. The name is a combination of “metadata” or “meta ecosystem” and “DeFi.”
The overarching goal of the project is to build a “parallel virtual ecosystem” that can facilitate the massive volume of data and asset transfers that will support the widespread adoption of the metaverse.
Is Binance Coin the Same as Smart Chain?
According to Binance, the token formerly known as Binance Coin is now called BNB, which stands for Build and Build. BNB is a cryptocurrency that serves as the BNB Chain’s native blockchain gas token. It’s used to facilitate all transactions and operations that take place on the Smart Chain.
BNB is an integral part of the BNB Smart Chain — and the blockchain couldn’t function without it — but they are not the same thing. BNB is the digital token that fuels activity on the Smart Chain — it’s what developers use to perform their work building web3 in the MetaFi ecosystem.
But BNB has many uses far beyond the BNB Smart Chain.
You can use BNB to:
Trade or hold as an investment like any other cryptocurrency.
Make purchases from more than 60 million merchants worldwide with the Binance Visa card.
Lend through token-farming on Binance Launchpool.
Receive and send crypto through Binance Pay.
Apply for cryptocurrency-based borrowing through Binance Loan.
Earn staking rewards through BNB Vault.
Earn a percentage yield by depositing BNB on certain Smart Chain projects.
That’s just how coin holders can use BNB in the Binance ecosystem. You can also use BNB externally to make payments through more than a half-dozen service providers, pay for travel, entertainment, subscriptions, make investments, take out loans, split bills and more, all through third-party networks.
What Is the Binance Smart Chain Built On?
The Binance Smart Chain is part of Binance, which bills itself as “the world’s leading blockchain ecosystem.” Its suite of offerings includes:
Binance Exchange: The world’s largest crypto exchange by trade volume.
BNB Chain: A community-based blockchain software system that developers from all over the world are using to build web3 infrastructure.
Trust Wallet: The official digital wallet of the Binance ecosystem.
Binance Labs: A fund that invests in and supports blockchain projects.
Binance Academy: An open-access learning hub that provides free crypto education.
Binance Charity: A nonprofit foundation dedicated to blockchain-enabled philanthropy.
Binance Research: Creates institutional-grade research reports and analyses for crypto investors.
The Smart Chain is built on the Binance ecosystem, but it’s an independent network.
Binance CEO Changpeng Zhao recently told CoinTelegraph, “People always think of BSC as part of Binance because it carries the company’s name. We’ve done a lot of work to decentralize it and hope to make BNB go beyond Binance.”
Where Did Binance Smart Chain Come From?
Both Binance and the BNB token debuted in 2017. Binance’s first blockchain was called Binance Chain, but it suffered from programmability restriction issues. In response, Binance developed Binance Smart Chain three years later in 2020. It succeeded where Binance Chain struggled by utilizing smart contract-based applications. The DeFi movement was taking off around the same time, and as alternative blockchain-based financial solutions began seeping into the mainstream, BSC implemented the Ethereum Virtual Machine, which enabled it to execute Ethereum-based applications.
This was an important step because Ethereum’s ability to support blockchain applications and smart contracts made it the go-to blockchain for NFT creators and dApp developers.
The recent creation of BNB Chain renamed the original Binance Chain and merged it with the Binance Smart Chain that followed.
Does Binance Use Smart Chain?
The Binance Smart Chain is one of the two segments that exist under the newly named BNB Chain, which is just one part of the larger Binance ecosystem. The umbrella network now known as BNB Chain includes:
BNB Beacon Chain: Previously called Binance Chain, this segment deals with chain governance — namely, voting and staking.
BNB Smart Chain (BSC): Formerly known as Binance Smart Chain, BNB Smart Chain keeps the same BSC initialization. This part of the BNB Chain deals with Ethereum Virtual Machine compatibility, multichain support and consensus layers.
According to Blockchain Council, multichain support is a critical upgrade because it enables cross-chain compatibility that allows users and developers to get the most utility out of both chains at the same time on the same network.
That multi-chain functionality — and the blockchain bridges it creates — is what will enable the enormous data and asset transfers that will make the MetaFi concept a digital reality.
How Is BNB Chain Different?
The newly formed BNB Chain, which was created by the merger of the original Binance Chain and the Binance Smart Chain that sprung up three years later, created several improvements. They include:
Scaling capabilities that moved from one-chain to multi-chain
The introduction of on-chain governance mechanisms
Improved scaling solutions and an expanded validator
Boosted BSC throughput
The BNB Chain’s stated commitment to the community is that it will always remain:
Open
Decentralized
Multi-chain
Permissionless
Bigger than Binance
Built for inventors and designers
What’s Coming Out of the BNB Chain?
The advanced capabilities of the BNB Chain are giving developers the tools to create exciting projects that will define your online experience in Web 3.0 and the metaverse. Here’s a look at some of the hottest new BNB Chain projects by category.
DeFi
ApeSwap: An automated market maker, yield farming and staking platform.
Tranchess: A chess-based yield-enhancing asset tracker.
AutoShark Finance: An automated liquidity sources aggregator and yield optimizer.
Games
era7: Game of Truth: The world’s first light esports blockchain game.
X World Games: Next-generation decentralized blockchain gaming system.
SecondLive: A diverse 3D virtual space that lets users create and profit from their own content through social, space-sharing and gaming.
Gambling
Lotto360: This gambling dApp includes lottery, dice and the Number of the Beast game, all in play-to-earn format.
Candle Genie: An entertainment platform that lets you win new digital assets by playing blockchain games.
OwlDAO: Top 1 iGaming solution provider for Web 3.0.
Exchanges
PancakeSwap: The top AMM and yield farm on the BNB Chain.
Bogged.Finance: An all-in-one trading platform for DeFi trading that offers access to all the tokens on ApeSwap, PancakeSwap and more.
Transit Swap: A multichain DEX aggregator.
Collectibles
Polychain Monsters: Cross-chain play-to-earn NFT platform.
Doodle Duckling Stamp: A premium stamp album filled with collectible, themed stamps.
Scapes: The home of the Seascape Network’s original NFTs.
Marketplaces
Element Market: A worldwide decentralized multichain marketplace for finding, creating and exchanging NFTs.
Rareboard: An NFT marketplace and aggregator.
tofuNFT: This NFT marketplace focuses on collectibles and GameFi.
Join the BNB Chain Ecosystem in 3 Steps
If you’re interested in participating in the BNB Chain, you can get started in three easy steps. First, download a digital wallet. It can be the BNB Chain’s native Trust Wallet or Binance Wallet, but MetaMask, MathWallet, BitKeep, Coin98 and many other popular wallets will work just as well.
Next, you’ll have to get some BNB, the gas token that fuels the BNB Chain. It’s currently trading for about $328. You can buy BNB through Binance Connect with a debit or credit card, buy it directly through your wallet — if your wallet allows it, or buy it on any crypto exchange, including Binance Exchange, and transfer it to your wallet. Finally, you’ll be ready to get started using a dApp — you can browse the hottest projects on the BNB Chain before you even sign up.
Information is accurate as of Nov. 3, 2022.
This article originally appeared on GOBankingRates.com: Binance Smart Chain: Everything You Need To Know
