What is Binance Chain?

In recent years, Changpeng Zhao’s previously Malta-based (and since 2020 ”headquarterless”) Binance exchange has become much more than merely a cryptocurrency exchange.

Binance now consists of an entire cryptocurrency ecosystem, with You will likely know Binance Chain as the blockchain underpinning Binance Coin (BNB). In recent weeks, Binance has been all the rage - however, the renewed interest in Binance has mostly stemmed from the Binance Smart Chain.

Nevertheless, to properly understand Binance Smart Chain and the BEP-20 token, we first need to understand Binance Chain and BEP-2.

Whis, then, brings us to the Binance Smart Chain. Essentially, Binance Smart Chain (or BSC) is the answer to gaining smart contract functionality without congesting the Binance Chain. Binance Smart Chain also features compatibility with the Ethereum Virtual Machine and brings smart contract functionality to the Binance ecosystem. Moreover, BSC isn’t just some Layer-2 solution - it is its own, independent blockchain - albeit with a likeness to Binance Chain.
In recent weeks, the Ethereum Network has seen massive congestion and high fees. Although this is relatively temporary, as Ethereum’s Layer-2 solutions (Ethereum 2.0) and the transition to an Ethereum Proof-of-Stake consensus mechanism mean Ethereum fees will eventually go down, high fees have crippled some Ethereum-based projects, and have led some to question whether Ethereum really is suitable to underpin as many DeFi projects as it doesn’t.