BNB Chain (BNB) is a blockchain created by the cryptocurrency exchange Binance. It’s a general-purpose smart contract network like Ethereum or Solana which allows developers to create and deploy applications permissionlessly.
BNB Chain relies on a network of 21 validators, using a proof-of-stake system (called Proof of Staked Authority) to reach consensus and produce blocks.
In Feb. 2022, two previous Binance blockchains, Binance Chain and Binance Smart Chain (BSC), combined to form BNB Chain. The change united the ecosystems, with its native token, BNB, changing from ‘Binance Coin’ to ‘Build and Build’.
What’s the difference between Binance and BNB Chain?
Binance is one of the largest crypto exchanges and is led by CEO Changpeng Zhao (‘CZ’).
Binance created BNB Chain, but as part of the name change in 2022, it claims BNB Chain “has since grown to become a community-driven, permissionless, and decentralised blockchain ecosystem,” and is “now simply one of the many contributors operating within the BNB Chain ecosystem rather than some kind of dominant force wielding unilateral power over it.”
BNB Chain remains one of the most widely used smart-contract platforms and uses its own token standards (BEP2 and BEP20)
BNB Chain’s native token is BNB. It has a maximum supply of 200M, of which ~155M are in circulation.
BNB is primarily used to pay transaction fees, for staking and as a utility token on BNB Chain.
Outside of BNB Chain, it’s used inside the Binance platform:
- Spot, margin and futures trading fee discounts.
- Increased commissions on referrals.
- Access to exclusive token events on Binance Launchpad.
- Can stake in the BNB vault to earn interest.
- Pay fees on the exchange—Binance offers certain rebates.
BNB Chain also utilises an ‘Auto-Burn’ token mechanism to reduce its total supply to 100M BNB.
The BNB Auto-Burn mechanism adjusts the amount of BNB to be burned based on BNB’s price and the number of blocks generated on the BNB Chain during the quarter.
All $BNB tokens (200M) had been pre-mined before the public sale. An ICO was held in 2017, with each BNB sold for 15c.
BNB allocation is as follows: 40% (80M) for the founding team, 10% (20M) for angel investors, and 50% (100M) for public auction.
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