What is BNB chain?

BNB Chain is a blockchain network built by Binance, one of the world's largest cryptocurrency exchanges. BNB Chain is designed to facilitate fast and secure transactions for Binance users and is the native blockchain for Binance Coin (BNB), the exchange's native cryptocurrency.

BNB Chain uses a Proof-of-Stake (PoS) consensus mechanism, which enables faster transaction processing times and reduces the amount of energy required to validate transactions compared to Proof-of-Work (PoW) blockchains such as Bitcoin.

One of the key features of BNB Chain is its ability to support the creation of new tokens, which can be used for a wide range of applications, including decentralized finance (DeFi), gaming, and NFTs. BNB Chain also supports smart contracts, which allow developers to build decentralized applications (dApps) on the network.

What is the history of the BNB chain?

In 2017, Changpeng Zhao founded Binance, a cryptocurrency exchange, and established the BNB token. It was initially issued in 2017 as an ERC-20 token, running on Ethereum. In April of 2019, it migrated to Binance Chain and eventually powered the BSC network launched in September 2020. In 2022, Binance combined BSC and BC into a single umbrella chain, BNB Chain. In addition to the two L1 blockchains, BNB Chain includes BNB Sidechain and ZkBNB (ZkRollup scaling for BSC). 

BNB Smart Chain supports the selling and storing of NFTs. In addition, BNB Smart Chain is a blockchain that runs parallel to the Beacon Chain, has smart contract functionality, and is EVM-compatible.

What is BNB Smart Chain (BSC)?

BNB Smart Chain is an EVM-compatible blockchain that brings programmability and interoperability to the BNB ecosystem. It was designed to provide a high-performance, low-latency, and cost-effective environment for building decentralized applications (dApps) and smart contracts. 

Some key features of BNB Smart Chain include:

Compatibility with Ethereum

BNB Smart Chain is EVM-compatible (meaning, it’s compatible with the Ethereum Virtual Machine), allowing developers to easily deploy smart contracts and dApps built for the Ethereum network.

Dual-chain architecture

BNB Smart Chain operates alongside the BNB Beacon Chain, enabling seamless transfers of assets between the two blockchains while leveraging the high-speed trading capabilities of the BNB Beacon Chain and the smart contract functionality of the BNB Smart Chain.

Proof of Staked Authority (PoSA) consensus mechanism

BNB Smart Chain uses a consensus mechanism called Proof of Staked Authority, which combines elements of Proof of Stake (PoS) and Delegated Proof of Stake (DPoS). In this system, validators are chosen based on the number of BNB tokens they have staked, and they validate and produce blocks to maintain the network.

Cross-chain compatibility

BNB Smart Chain supports cross-chain communication and transfers, allowing for the exchange of tokens and data between various blockchain networks.

Decentralized finance (DeFi)

BNB Smart Chain has become a popular platform for DeFi projects and applications, thanks to its compatibility with Ethereum, low transaction fees, and high throughput. This has led to the growth of the DeFi ecosystem on the platform.

What is BNB Beacon Chain?

BNB Beacin Chain is the native blockchain of Binance's utility token, Binance Coin (BNB). BNB Smart Chain runs parallel to it. BNB Beacon Chain is the staking and governance layer of the BNB ecosystem.

Some key features of BNB Beacon Chain include:

Speed and performance

BNB Beacon Chain is designed to deliver high throughput and low latency, enabling fast transactions and confirmation times. This makes it suitable for time-sensitive operations.

Decentralized Exchange (DEX)

BNB Beacon Chain supports a decentralized exchange called Binance DEX. 

Low transaction fees

BNB Beacon Chain offers competitive transaction fees compared to other blockchain platforms.

Community-driven governance

BNB Beacon Chain operates under a community-driven governance model, where validators are selected based on their contributions and involvement in the ecosystem.

How does BNB chain work?

BNB Chain’s multi-chain ecosystem attributes different roles to its L1 or L2 chains. 

As mentioned above, BNB Smart Chain (an L1 blockchain) is used primarily for NFTs. BNB Beacon Chain serves as the blockchain’s governance chain, where BNB (the blockchain’s token) is used to stake and vote. BNB Sidechains are roadmaps developers can use to create L2 blockchains that use BNB SC as their L1 and are often used to develop DApps. ZkBNB scales BSC’s offerings. According to BNB, a ZkBNB can support up to 10,000 transactions per second. 

What is BNB Smart Chain’s validation method, Proof-of-Staked Authority?

Unlike Bitcoin or Ethereum, which use Proof-of-Work and Proof-of-Stake as consensus mechanisms, BNB Smart Chain uses Proof-of-Staked Authority (PoSA). Proof-of-Staked Authority is a combination between Proof-of-Stake and Proof-of-Authority. 

Blockchains that use Proof-of-Stake verify transactions using randomized validators, while blockchains that use Proof-of-Authority verify transactions using a small group of designated, reputable validators. 

PoSA uses a designated group of voted-upon validators to add blocks to its blockchain. PoSA only allows 21 designated validators to participate based on their staking status. As a contingency, the blockchain also sets aside 20 inactive validators (known as “Candidates”) who would step in should anything happen to the original 21 active validators. 

The group of active validators resets every 24-hour cycle. 

What are BNB Smart Chain’s main uses?

BNB Smart Chain DApps

Decentralized apps (or DApps) are blockchain-integrated websites that require you to connect and approve all transactions with your wallet signature. DApps examples on BNB Chain span from games (like X World Games) to tools and utility-based apps that facilitate communications between blockchains. 

BNB Smart Chain DeFi

Decentralized Finance, often shortened to “DeFi,” is the term used to describe all financial services that operate on blockchain technology. Common services include earning interest, borrowing, lending, and trading. DeFi enables trustless, permissionless, and fast transactions. Some highly ranked DeFis on BNB Chain’s website are ApeSwap and SushiSwap. 

BNB Smart Chain NFTs

Non-Fungible Tokens (NFTs) are unique, digital items with blockchain-managed ownership. Examples of NFTs include digital art, collectibles, virtual reality items, crypto domain names, ownership records for physical items, and more. On BNB Chain, NFTs can be digital collectibles like Polychain Monsters.