Binance has long been one of the world's leading cryptocurrency exchanges. With its own blockchain: the BNB Smart Chain – They also seek to become leaders in the nft industry.
Previously known as Binance Smart Chain, BNB Smart Chain (BSC) is a Layer 1 blockchain fully supported by <a target="_blank" href="https://x.com/binance” target=”_blank” rel=”noopener”>binance crypto exchange. With this power behind it, BNB is looking to dominate the DeFi space, but has also diversified into nfts, gaming, and even blockchain-based art.
Although incredibly popular upon its debut, BSC faces increasing competition from other Layer 1 blockchains and an increasing number of Layer 2 networks, but what makes BNB Smart Chain stand out, how did it become so popular and why should it? be on your radar?
Here is our complete guide to BNB Smart Chain.
Key information
- A layer 1 blockchain, competing against ethereum and Solana
- Created by the team behind crypto exchange Binance
- It debuted in 2020, replacing the original Binance Chain from 2019.
- Experienced explosive growth in 2021 during the first nft boom
- Known as a predominantly DeFi-focused blockchain
What is BNB smart chain?
BNB Smart Chain is a layer 1 blockchain launched by the popular cryptocurrency exchange Binance in September 2020.
It was designed as an upgrade to the original Binance Chain, launched in 2019, adding support for smart contracts, enabling decentralized applications (dApps), nfts, and more.
BSC has full support for the ethereum Virtual Machine (EVM), making it work seamlessly with a wide range of ethereum-based dApps, tools, and services.
BNB Smart Chain is powered by the $BNB token, which stands for “build and build,” which is used to pay transaction fees and facilitates governance of the blockchain through staking and voting mechanisms. $BNB is one of the most popular crypto tokens in the world and regularly holds a place among the top 10 largest cryptocurrencies in the world. As of January 18, 2025, it is currently ranked 6, with a token price over $700 and a market capitalization over $100 billion.
In terms of services, BNB Smart Chain is perhaps best known for the PancakeSwap trading platform, which offers leading DeFi services such as decentralized exchange and an nft marketplace for BSC-based nfts. Some of the most popular nft collections on BNB Smart Chain include Pancake Squad, Pancake Bunnies, and <a target="_blank" href="https://x.com/PixelSweeper” target=”_blank” rel=”noopener”>Pixel sweeper.
Through Binance's partnership with world-renowned soccer star Cristiano Ronaldo, BNB Smart Chain has also hosted multiple series of digital collectibles starring the star. This has helped boost BSC's prominence and introduce the network to a whole new legion of fans.
How does BNB smart chain work?
BNB Smart Chain is designed with speed, efficiency, and affordability in mind, making it attractive to both developers and users.
Some of its notable features include:
- A unique consensus mechanism. BSC uses a unique consensus algorithm called Proof-of-Staked Authority (PoSA), a hybrid of Proof-of-Stake and Proof-of-Authority. Validators stake $BNB as a requirement to validate the network, earning $BNB fees as a reward and ensuring security, speed, and low latency.
- ethereum compatibility. BSC is compatible with EVM. Developers can deploy ethereum-based applications on BSC with minimal adjustments, using familiar tools and languages like Solidity. This has allowed BSC to rapidly expand its ecosystem with a wide variety of dApps.
- Low transaction fees. With transaction fees often as low as a few cents, BSC offers an affordable alternative to ethereum, where high gas fees have been a long-term issue.
- Extensive support for dApps. BSC supports all types of dApps, from decentralized exchanges (DEX) and lending platforms, to yield farming protocols and nft marketplaces. Popular DApps like <a target="_blank" href="https://x.com/PancakeSwap” target=”_blank” rel=”noopener”>PancakeExchange, <a target="_blank" href="https://x.com/VenusProtocol” target=”_blank” rel=”noopener”>Venusand <a target="_blank" href="https://x.com/autofarmnetwork” target=”_blank” rel=”noopener”>automatic farm retain hundreds of thousands of users to this day.
In addition to this, BNB Smart Chain provides a robust infrastructure for both nft creators and collectors. It supports token standards such as BEP-721 and BEP-1155, equivalent to ethereum's ERC-721 and ERC-1155, ensuring easy interoperability and simple interactions.
By offering a scalable and efficient blockchain, BSC enables developers to create innovative applications that are capable of handling large volumes of users at a fluid and stable pace. This is vital for the growth of blockchain-based services, especially as more users enter the industry every day.
The History of the BNB Smart Chain
The history of BNB Smart Chain is closely linked to the history of the Binance crypto exchange itself.
Two years after Binance was founded in 2017, the company launched the original Binance Chain. This inaugural blockchain focused on bolstering trading speeds on Binance itself and included the adoption of the $BNB token as the native currency of Binance products.
Despite its benefits, Binance Chain did not support smart contracts, a decision that put a limit on its potential. In response to this, Binance introduced Binance Smart Chain in September 2020, initially to run alongside Binance Chain, with plans to replace or integrate the original chain in the future.
Binance Smart Chain had smart contract support and EVM compatibility, with a view to supporting not only the growing DeFi market, but also the increasingly popular nft industry.
As nfts grew in 2021, Binance Smart Chain also saw explosive growth, at times surpassing that of ethereum. Its low fees and high-speed transactions attracted both developers and users, with this period being a notable high point in the chain's history.
In February 2022, Binance combined Binance Chain and Binance Smart Chain into the BNB Smart Chain (BSC) we know today, emphasizing the “build and build” ideology and the fanatical nature of its community at the time.
As other Layer 1 and Layer 2 networks have emerged to gain attention in recent years, BSC has arguably fallen out of favor. Despite this, with the $BNB token remaining such a prominent pillar of the crypto industry, the BNB Smart Chain remains a highly regarded solution and development continues to improve it for the future.
These improvements include further decentralization of the network, making the Binance company less important in the day-to-day operation and management of the ecosystem. Scalability and interoperability improvements are also being worked on, with the introduction of sidechains and an exploration of sharding technology being considered to increase transaction speed and help adapt to the growing number of dApps.
2025 presents new challenges for BNB Smart Chain, but also a long list of opportunities. As both nfts and cryptocurrencies continue to find new audiences and the overall industry continues to grow, BNB Smart Chain has great potential in its future.
