# L1 BNB Chain $BNB (Binance Smart Chain) By [moonduck15](https://paragraph.com/@moonduck15) · 2022-02-04 --- A cheat sheet to illustrate details on [Investors checklist for Blockchains](https://themoonduck-15.medium.com/investors-checklist-for-blockchain-47c14569c263) . Data or stats are not authoritative and picked from scans of tweets, discord , telegram reddit etc 2021 Q4 and some references are provided. In case of any misses do let me know and I will update. _These notes are more on under-the-hood engineering look. A separate article will cover the business development viewpoint_ _I use the trading ticker rather then name and for example for Axie Infinity blockchain game $AXS implies the coin or token and AXS implies the foundation/DAO/founders as appropriate_ **Status : DRAFT** * Basics * Price Action * Stats and Links * Highlight Pro and Con * Technology * Apps Ecosystem * Funds and Promotions * Readings Basics ------ [BNB or $BNB](https://www.coingecko.com/en/coins/binance-coin) is an exchange coin of Binance and centrally managed like $HT from Huobi, $CRO from [Crypto.com](http://Crypto.com) $FTX from FTT . $BNB is actively promoted by Binance with discounts on trading fees and is also the native currency on Binance Chain an early attempt to provide a low gas fee basic blockchain for its trading system followed by Smart-contract clone of Ethereum EVM Binance Smart Chain (BSC) now [renamed BNB Chain](https://en.cryptory.net/post/binance-smart-chain-renamed-to-bnb-chain/) . BSC is supposed to be a community effort but there are little public English open groups and officials of Binance like [Samsul Karim](https://www.linkedin.com/in/samsulkarim/), Director- Business & Ecosystem Development- Binance and [Jeff Zhang BSC Community Manger](https://twitter.com/Tokocrypto/status/1372466437739085826?s=20) are involved . Binance chain source code is currently not open source for competitiveness reasons, according to Binance BSC has 125 Million unique addresses and 1.2 million+ daily users and 7 Million + average daily transaction ( Dec 2021 ). It was the first chain to exceed Ethereum volume in Feb 2021 . ![https://twitter.com/BinanceChain/status/1359326372208939009](https://storage.googleapis.com/papyrus_images/30c5a8425d7d7a904c80f2dc4d23d8cd41e6ec709438d21ec3d21101fa5533a1.png) https://twitter.com/BinanceChain/status/1359326372208939009 [Nansen.ai](https://www.nansen.ai/) reported 19 Jan 2022 that BSC currently processes over 5x the number of transactions than Ethereum, and at its peak, it processed over 10x the number of transactions, Price Action $BNB had parabolic growth in Q1 2021 and has not yet broken its past ATH but has given 37.095 USD (Jan 1) - 513.677 USD (Dec 31) in 2021 for **1,284.75% return in 2021** with Low to High being 17X . ![Snapshot 19 Jan 2022](https://storage.googleapis.com/papyrus_images/002e65903c9634577a8e7f1bf1599cb33a0bfc8d648c2e36008754af3fdd92a4.png) Snapshot 19 Jan 2022 ### Stats and Links Community Stats: 700K+ Reddit, 1.8 Mill+ Twitter, 64K+ Telegram [Website](https://binancex.dev/) [Explorer](https://bscscan.com/) [Twitter](https://twitter.com/binancechain) [Reddit](https://www.reddit.com/r/binance) [Telegram](https://t.me/BinanceDEXchange) [Github](https://bit.ly/BSC_GitHub) [Discord](https://discord.com/invite/binancesmartchain) [DevDocs](https://docs.binance.org/) ### Highlights Pro and Con * High utility of $BNB for discounts on trading on Binance and as access to list new projects ( IEO) . Rumored need to lock 3,300 $BNB * competitive staking yield was around 14% in Q4 2021 but may come down. * Popular apps and large user base. PancakeSwap ($CAKE) a DEX for BSC has 2X more TVL than any other DEX on any other chain. ( see App Ecosystem section) * Concerns on small authority based validators under Binance control ( See Bears section at end of post) * High volume and large apps and users have seen outages on apps, numerous hacks and instability on upgrades ( More in Bears section at end of post) * Multiple regulators have taken umbrage at Binance especially as its headquarters and jurisdiction are unclear with [‘vanishing’ Malta](https://www.crunchbase.com/organization/binance) or Lithuania location at some small time slices. * BNB Chain rebranding includes layered Multi chain model. * A Optimism style L2 AutoBhan Netowork Technology ---------- Built on forks of [Tendermint](https://tendermint.com/) and [Cosmos SDK](https://v1.cosmos.network/sdk), the Binance Chain went live on 23 Apr 2019 with a single Binance DEX and its native token BNB migrated away from the ERC-20 Ethereum Token to a BEP-2 Binance chain token .Binance chain supports BEP-2 and BEP-8 tokens Binance launched its Smart Chain (BSC) on 1 Sep 2020 with the goal of providing an alternative, EVM compatible smart contract-enabled blockchain and claimed 3 second Block time , 20 gwei avg fees and 16- 21 validators using POA (proof of Authority) and uses BEP-20 Tokens. Binance provides easy swap of $BNB on both chains and TrustWallet . This is the "dual-chain architecture”. ### Consensus BSC uses a **Delegated Proof of Stake** (DPOS) and uses a set of 16-21 validators who have to stake $BNB. The staking status decides the top 16-21 highest staked nodes to be the next validator set, and such an election will repeat every 24 hours. Binance uses validators on Binance Chain (BC) and syncs messages and status midnight each day between BSC and BC the _dual-chain_ architecture as described in [Binance Smart Chain Whitepaper](https://dex-bin.bnbstatic.com/static/Whitepaper_%20Binance%20Smart%20Chain.pdf) ![Source: Binance Smart Chain Whitepaper](https://storage.googleapis.com/papyrus_images/1fe7e704cbbb36626d8c2021ead86fc7c3cdaa00bbb1f4df6031f6d41cb77703.png) Source: Binance Smart Chain Whitepaper Apps Ecosystem -------------- Some popular or interesting among 1,500  Dapps . [See link](https://www.coingecko.com/en/categories/binance-smart-chain). Some Tokens like Fantom $FTM and $MATIC (Polygon) BEP-20 on BSC ( $MATIC  initially launched or were funded at a Binance event) and can be bridged over. $BUSD or Binance coin is a [stable-coin under NY state Department of Financial Services NYDFS](https://www.binance.com/en/blog/futures/busd-all-you-need-to-know-about-the-stablecoin-421499824684903051)  and has a decent volume over 3 billion+ coins traded daily in 2021 ![https://twitter.com/coin98analytic/status/1355456445970599937?s=19](https://storage.googleapis.com/papyrus_images/b5ceed71911c150cdec1bf0e5d889f8efe4a21739a5ee8804ca21a186da1a07c.jpg) https://twitter.com/coin98analytic/status/1355456445970599937?s=19 CAKE or PanCakeSwap a AMM or DEX  and deposit and borrowing thru farms or pools. XVS Venus for lending and borrowing. AUCTION or Bounce for NFT trading. AUTO Autofarm Network  provides a DEX and yield aggregator. See [Defilama list](https://defillama.com/chain/BSC) BSC apps have benefited from the largest CEX Binance user base and have significant value locked (TVL) as illustrated in the graphic below. ![https://twitter.com/Crypto_Dep/status/1488562216769138689?t=Sn6iOH6tNXCz1Njpm2hlQw&s=09](https://storage.googleapis.com/papyrus_images/9afd7c2c450ad910118ffca3300e4703fc51cbcb4215e6b84cea9b3cc76caa10.jpg) https://twitter.com/Crypto\_Dep/status/1488562216769138689?t=Sn6iOH6tNXCz1Njpm2hlQw&s=09 BSC has many NFT gaming and other apps. See 4 infographics in this [tweet Aug 2021](https://twitter.com/Coin98Analytics/status/1429851175176732674?s=20) Sentiments ---------- $BNB was issued for 15 Million ICO round in July 2017 and has had a quarterly burn till Q3 2021 estimated at 20% of Binance earning but now a burn similar to EIP-1559 . Binance auto-burn aims to reduce 200 Million circulating coins to 100 Million . **Promotions** Binance heavily promoted BSC with [$100 million support fund](https://www.binance.com/en/blog/421499824684900972/Bridging-DeFi-and-CeFi-Introducing-a-$100M-Support-Fund-for-DeFi-Projects-on-Binance-Smart-Chain) to lure developers and DeFi apps from Ethereum to benefit from low fees and similar code in EVM (composability) and invented [Binance Centralized-DeFi](https://101blockchains.com/what-is-cedefi/) or CeDeFI . Binance Labs is a very [active investor](https://messari.io/screener/binance-labs-portfolio-F98B336A) and [Binance has a Billion dollar fund](https://www.binance.org/en/1b-growth-fund) in 2021-2022 to promote crypto start-ups. Not all may be for BSC as Binance even had [investments in FTX a competitor](https://decrypt.co/76584/ftx-ceo-sam-bankman-fried-why-bought-out-binance-investment-shares-exit) and owns Coinmarketcap a infomediary provider of coins directory **Bears** There are fair critics of its [control by Binance  of the validators](https://twitter.com/WilsonWithiam/status/1381420702918664194) and multiple situations where withdrawals of some tokens have been suspended for some time. A quote from 1inch’s founder, Sergej Kunz: `We don't know for sure if the BSC is centralized as we don't know who are the validators of their network. But 1inch plans to run its own validator on BSC.”` _Source:_ [_CoinTelegraph_](https://cointelegraph.com/news/1inch-announces-expansion-to-binance-smart-chain-plans-to-run-bsc-node) Q3 2021 an [option to delegate](https://docs.binance.org/smart-chain/delegator/del-guide.html) your $BNB to validator and earn staking APY has been easily available esp thru TrustWallet and [validators lis](https://www.binance.org/en/staking)t  and their share and commission terms can be checked. There is a telegram bot ( @BSC\_Binance\_Chain\_Bot )  which will send you daily earnings messages A more telling critique is in Unchained podcast on the apparent loose Software engineering and release cycle of BSC [Is Binance Smart Chain Being Run 'Like the Project of a Stoned Teenager?' Two BSC Execs Answer - 310](https://www.youtube.com/watch?v=oFQjy5fyX8M) * large % Failed transactions * numerous hacks of apps on BSC * There doesn't appear to be any [reasonable testing process](https://github.com/binance-chain/bsc/issues/553) in place. Every update appears to make things worse. There is no code review, patches are simply committed, in most cases even without a proper description of what they do or what problem they try to solve * that some validators are front running without risk? does BSC have a future if Ethereum scales? There are rumors of additional blockchains to offload NFT / Gaming and focus of BSC on DeFI. ### Readings * [BNB Chain: The Evolving Juggernaut: Messari](https://messari.io/article/bnb-chain-the-evolving-juggernaut) Further, contrary to the prevailing belief, none of the network's validators are run by Binance. Seven validators, including those run by independent third parties such as HashQuark and Certik, contribute to just under ~33% of the network's total stake. There are many fair critiques about the small validator set for the BNB Chain, but they require context. BNB Chain is not better or worse with respect to decentralization than many other blockchains. According to nakaflow.io, BNB Chain has a Nakamoto Coefficient of 7, which is in the median. With that in mind, BNB Chain can ensure greater security and network reliability by expanding the validator set with inactive validators. * [Autobahn Network](https://medium.com/autobahnnetwork/autobahn-network-the-first-scaling-solution-for-bsc-c10c082e0bcb) `will open a whole new world of possibility by being the very first Layer 2 Optimistic Rollup for the BNB Smart Chain` * [BNB Chain Roadmap 15 Feb 2022](https://www.binance.com/en/blog/ecosystem/introducing-bnb-chain-the-evolution-of-binance-smart-chain-421499824684903434) `Increasing throughput of BSC,Introducing on-chain governance mechanisms. Expanding the validator set of BSC from 21 to 41, with 20 validators functioning as candidate block producers. Scaling from one chain to multi-chain.Interoperability between different blockchain ecosystems` * [The Rise of Binance - And The Effort to Reel It In - The Journal. - WSJ Podcasts](https://www.wsj.com/podcasts/the-journal/the-rise-of-binance-and-the-effort-to-reel-it-in/2e17ecf4-4ad8-49af-91b5-197653a77741) `It's not just the New York Stock Exchange. It is the New York Stock Exchange, the London Stock Exchange, Hong Kong, combined. No other exchange even comes close to it`. * Unlocking Binance Cryptocurrency Exchange | [CZ CEO of Binance Interview](https://youtu.be/bxSdb7i0AAE) * [Binance worth 300 Bill ?](https://twitter.com/JulianKlymochko/status/1459191851617898496) `According to the WSJ report, the estimated valuation of the company is based on the fees being generated by the exchange. For context, available data shows that the exchange processes more than $30 billion in daily spot trading and that it also processes close to $80 billion in daily derivatives trades. Other exchanges in the top 5, cumulatively, were only able to process almost half of its daily transaction volume.` --- *Originally published on [moonduck15](https://paragraph.com/@moonduck15/l1-bnb-chain-bnb-binance-smart-chain)*