Since its launch in 2017, Binance has become the largest and most important crypto exchange in history. Today, it offers hundreds of different token pairs that cater to almost every trader. Over the years, Binance has added a wide range of services to become an all-in-one platform for investors. Lending, borrowing, staking, margin trading and many other financial services are available on the platform.
The exchange also released its own token, BNB, which helped it raise enough funds ($15m) to place itself as a major player in the niche. It started as a simple utility token to provide rebates for traders on Binance but has gained numerous use cases over the years. The BNB brand has become a flagship for the company.
For this reason, the company has announced a rebranding of its two major blockchain products. The Binance Chain and the Binance Smart Chain will become the BNB Chain. In this article, we take a closer look at what these blockchains achieve, what they will be named going forward and the reasons behind the rebranding. Let’s get started.
What Is Binance’s BNB Chain?
The Binance BNB Chain is the new name that will encompass the current blockchain ecosystem of the company. It will consist of two parts. The first one, the Binance Chain, will become the BNB Beacon Chain and will secure the network. The second part, the BNB Smart Chain, will serve to execute smart contracts in the ecosystem.
To provide a little history, the Binance Chain was the first blockchain released by the exchange. This blockchain had the goal to serve as a platform for its decentralised exchange and foster the BNB coin. Two years later, Binance released the Binance Smart Chain (BSC), a smart-contract capable blockchain that had the major task to rival giants like Ethereum. And it succeeded at this by providing extremely cheap transactions at a time when Ethereum was struggling with sky-high gas fees.
As a result, BSC became a major player in the decentralised finance ecosystem, mainly through its incredibly successful PancakeSwap decentralised exchange. This success simultaneously increased the usage of BNB tokens and their success in the open market. Two major use cases of BNB are:
- To act as gas for transactions on the Binance Chain; and
- To serve as a governance token on the Binance Smart Chain.
So instead of having two separate blockchains with different goals, Binance has decided to consolidate them into two interdependent blockchains. Additionally, Binance is increasing the number of validators by 20. These changes should help to quell criticisms raised in the past about the centralisation of BSC.
Moreover, this larger number of validators should increase the scaling of an already fast blockchain network. The goal is to prepare it for the upcoming GameFi revolution and provide mass usage for microtransactions in blockchain games.
Why Are the Binance Chain and Binance Smart Chain Being Rebranded?
The first reason for the rebranding is to simplify the nomenclature of the ecosystem as much as possible. Currently, two very different blockchains (but similar in name) make up the Binance ecosystem. Regrouping them under a single name as the BNB Chain should allow users to avoid any type of confusion.
Secondly, the goal of the company is to rebrand the ecosystem into the BNB Chain to make a stronger connection with the BNB token. The abbreviation BNB stands for “Build & Build,” encompassing the motto of Binance’s CEO to continue building the ecosystem, regardless of the state of the crypto market.
Finally, this will also serve as an umbrella name for all upcoming metaverse developments in the ecosystem. Binance believes that virtual worlds powered by NFTs on the BNB Chain can be a major vehicle in the upcoming future.
Difficult Relationship With Jurisdictions
Another possible desire for rebranding could be the regulatory woes of the company over the years. The first problems started very soon after Binance launched as a Chinese company. The Chinese government at the time banned initial coin offerings and various crypto activities, forcing the CEO to relocate entirely out of the country.
Next, it was America’s turn to limit Binance’s activities in the country. The exchange needed to create an entirely separate platform to be able to cater to US citizens (Binance US) and comply with regulations.
Then, the UK, Germany and Japan slammed the exchange for offering financial services such as futures or tokenized assets without permission. Consequently, the rebranding of the blockchain ecosystem could allow Binance to start on a fresh page, enabling it to become associated with progress and building instead of trying to avoid regulations.
Plans for 2022
The future looks quite bright for the BNB chain. The company is looking towards expanding the BNB Chain ecosystem to a cross-chain ecosystem. As such, the BNB chain should be able to form a bridge between different blockchains and connect EVM-compatible networks with each other. It also aims to introduce partition chains, which are multi-chain layered systems that should increase the scaling and security of the ecosystem.
Finally, the team pledges to work towards empowering the BNB community and focus on research by investing in talented developers to grow its core team. All in all, BNB Chain looks like it has all the tools to succeed in the coming years, even with the increased competition in blockchains like Avalanche, Cosmos and the upcoming Ethereum 2.0.