The BNB Chain, formerly Binance Chain, is an EVM-compatible blockchain. It emerged as a popular alternative to the Ethereum blockchain. As of the time of this writing, the BNB chain is the second largest Layer-1 chain behind the Ethereum blockchain, with $4.92 billion in total value locked (TVL), according to Defillama.
Unlike any other Layer-1 blockchain, the BNB Chain has a dual architecture, i.e., it runs two chains (the BNB Smart Chain (BSC) and the BNB Beacon Chain) concurrently. However, an important thing to note is that although the two chains (the BSC and the Beacon Chain) work together to make the BNB chain a better alternative, both chains are actually independent of each other!
Sounds confusing?
You don’t have to worry. In this article, we’ll discuss what these two chains are. Why does the BNB chain have a multi-architecture design? And the key differences between them. Without further ado, let’s get to it!
The Difference Between BNB Smart Chain and Beacon Chain
The BNB chain comprises two chains, the BSC and the Beacon Chain, that work concurrently. This Layer-1 blockchain aims to solve Ethereum’s scalability problem without losing out on security.
The BNB Beacon Chain is mainly used for governance. It allows the blockchain community to stake the governance token (BNB) and vote on the decision-making of the blockchain.
You can find out more about staking in our detailed guide here.
The BNB Smart Chain (BSC) hosts the blockchain ecosystem. Like the Ethereum blockchain, this chain is Turing complete, and it allows the deployment of smart contracts, decentralised Applications (DApps), and all other web3 applications.
It’s also worth noting that the Beacon Chain and the BSC maintain operational capacity while being independent of each other. This means that if one chain shuts down, the other will still be fully operational.
History
BNB Chain, previously referred to as the Binance Chain, was created in 2019 to provide a decentralized and ultrafast trading capability for blockchain users. This chain supported cross-chain compatibility and addresses the poor user experience provided by other DEXes. Because of this, the Binance Chain had some programmability restrictions at inception.
After a year and a half of fully running Binance Chain, a transactional blockchain, the company created Binance Smart Chain (BSC), a smart contract blockchain. BSC was created because there was a need to have an Ethereum Virtual Machine (EVM) compatible blockchain platform. BSC has similar usability to EOS, Tron, and Ethereum.
One thing to note, however, is that instead of upgrading the existing Binance Chain to accommodate smart contracts, Binance created an entirely new blockchain to run concurrently and parallel to the existing blockchain. The reason behind this design decision was to maintain the fast speed of the existing Binance Chain. Because of this design, Binance Chain users can now enjoy a fast transaction capacity and use Ethereum-based applications because the new BSC platform is EVM-compatible.
In February 2022, however, Chanpeng Zhao (CZ), the founder of Binance, the company behind Binance chain, said at a webinar that Binance Chain is transitioning into a fully decentralized, open source, and community-owned ecosystem that depends on developers, delegators, users, and validators like Ethereum and other decentralized smart contract blockchains.
As a result, the Binance Chain was rebranded to Build n’ Build (BNB) blockchain with the BNB token (formerly Binance Coin) now used as the native currency of the blockchain.
After the rebranding of the chain, the two concurrent chains, the Binance Chain and Binance Smart Chain (BSC), that made up the former Binance Chain, were kept but also rebranded. Binance Chain was rebranded to BNB Beacon Chain to serve as the governance and decision-making platform, while Binance Smart Chain (BSC) to BNB Smart Chain (BNB) continues to host the blockchain’s ecosystem.
EVM-Compatibility
The BNB Smart Chain (BSC) boosts smart contract functionality and is EVM-compatible. This means developers can easily migrate and redeploy their DApp project and smart contract from Ethereum to the BNB Chain. Moreover, for users, an EVM-compatible blockchain means they can configure Ethereum DApps like MetaMask to work with BSC.
On the other hand, the BNB Beacon Chain is only designed for governance and decision-making, and it doesn’t support smart contract functionality. It’s not a smart contract chain and doesn’t support EVM.
Wallet Address Format
Since the Beacon Chain and the smart chain are independent of each other, everything about each chain, including their wallet address format, is also significantly different.
The BNB beacon chain wallet address starts with “bnb” and may require a memo for token transfer. A MEMO, which is also known as a destination tag, is an additional information or feature included in a transaction to identify the recipient of a cryptocurrency or token beyond the wallet address.
However, this is only if you are sending your funds to another exchange account. If you are sending it to a non-custodial wallet, a MEMO is not needed.
Moreover, as an EVM-compatible chain, the BSC has a similar token standard to Ethereum. BSC wallet addresses start with “0x”, which is like the Ethereum wallet address format. And so, the tokens are interoperable with Ethereum ERC20 tokens.
Token Standards
Just as there were two chains on the BNB chain, there were also two token standards: the BEP2 and BEP20.
BEP2 is the token standard for the BNB Beacon Chain. This token standard is an integral part of the Binance Chain, the first chain by Binance. It’s also the token standard for the Binance Coin (BNB), the Binance native coin. The BEP2 token was used only as transaction fees on both Binance’s centralised and decentralised exchanges.
Since BEP2 tokens are not interoperable with any other blockchain, they cannot work on any other chain except Binance. So, BEP2 token holders will need to convert their tokens to BEP20 tokens to use them on other BNB DApps.
Alternatively, BEP20 is the native token standard for the BSC, BNB smart contract platform. This token standard was inspired by the ERC20 token standard, so it’s EVM-compatible. Moreover, it features many fundamental similarities to ERC20 tokens, such as returning the balance, examining token ownership, and transferring.
BEP20 and BSC are 2 confusing terms of the entire ecosystem, and you can find a comparison between them here.
Finally, BEP20 tokens are programmer-friendly that allow anyone to create tokens. Moreover, it’s tailored to offer smart contract support to the BNB ecosystem.
A bridge (BSC Token Hub) is used to transfer tokens from one network to the other (BEP20 to BEP2 or vice versa). This bridge was hacked and you can find out what actually happened in our article here.
Use Cases
The primary use case of the BNB Beacon Chain is for governance and decision-making. This chain is designed for validators and delegators to stake their tokens and perform on-chain voting on issues concerning the BNB chain.
The BNB Smart Chain is a smart contract platform like Ethereum. It’s a platform for decentralised application (DApp) development and smart contract implementation. And since it’s EVM-compatible, it’s compatible with all Ethereum DApps.
Top Applications
Since the BNB Beacon Chain is a platform for governance and decision-making, it is not smart-contract or DApp compatible.
Alternatively, here are some of the most used DApps on the BNB Smart Chain include:
- PancakeSwap is a decentralized exchange on the BNB chain that lets users trustlessly exchange and swap their tokens with no intermediary.
- Hooked Protocol is a decentralized, community-driven social protocol that lets users learn, earn, and enjoy gamified experiences in the web3 ecosystem.
- DRIP Network is a DeFi project that provides passive income through a smart contract to DRIP token stakers.
- ApeSwap is a multichain DeFi platform that offers a different suite of DApps for easy accessibility into web3.
Verdict
Here’s a summary of the key differences between both chains:
| BNB Smart Chain | BNB Beacon Chain | |
|---|---|---|
| History | Launched in 2020 for DApps and smart contract deployment | Launched in 2019 to support cross-chain compatibility and to address the poor user experience provided by other DEXes. |
| EVM-compatibility | EVM-compatible. Ethereum smart contracts and DApps can be easily ported to the BSC because of their compatibility with EVM. | Not EVM-compatible. Only used for on-chain governance and staking. |
| Wallet Address Format | the wallet address starts with “0x” | the wallet address starts with “bnb” |
| Token Standards | BEP20 token standard | BEP2 token standard |
| Use Cases | smart contract platform for the deployment of DApps and DEXes | Used for staking, governance, and on-chain voting and decision-making. |
| Top Applications | ApeSwap, DRIP network, PancakeSwap, Hooked protocol | NA (mainly staking) |
Final Note
While the BNB Beacon Chain and the BNB Smart Chain are independent of each other, both chains worked together to make the BNB ecosystem a better competitor to the Ethereum blockchain.
At Krystal, we support the BNB Smart Chain as one of our numerous EVM-compatible chains.
You can view your entire portfolio (including NFTs) in one screen, and swap tokens for the best rates!
Find out more about how to make a swap on Krystal from your Metamask wallet here.
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