Binance Chain: Understanding the BEP2 Standard

Binance logo and tag line.

On April 23, 2019, Binance launched the mainnet of its proprietary blockchain, called Binance Chain. As part of the mainnet launch, users of Binance’s ERC20 token, ERC20 BNB, are required to convert their Ethereum tokens in a mainnet swap to receive BNB.

In this article, you will learn what the Binance Chain, the BNB token, and the new BEP2 standard are.

The Binance Chain Launch

On April 18, 2019, Binance announced that it had completed creating Binance Chain. Furthermore, the press release revealed that the blockchain would be opened to the public, with all relevant instructions of how to port everything, five days after the announcement.

Binance explained that holders of the ERC20 token, ERC20 BNB, were to follow a set of instructions to successfully participate in the mainnet swap. According to the Binance Chain Mainnet Swap guide, it involved a simple transaction.

“If everything works as intended, then users will be able to provide a Binance Chain address for BNB withdrawal requests. The withdrawal will then act as a mechanism to convert ERC20 BNB tokens into BEP2 BNB tokens native to Binance Chain.” 

On April 23, 2019, Binance announced it had successfully completed its mainnet swap and users were now able to make deposits and withdrawals of BNB.

What Is BNB?

The BNB token on the Ethereum blockchain was initially designed to help users lower their fee burden when transacting on the Binance exchange.

Due to the fee optimization, Binance users are greatly incentivized to acquire the ERC20 token. However, earlier this year, Binance explained it was creating its own blockchain and porting all its services to its ledger. This included a cross-blockchain token swap, from the Ethereum blockchain to the Binance Chain.

The new BEP 2 standard is, therefore, a set of pre-defined criteria implemented to launch tokens on the Binance blockchain.

The BNB coin, now native to the Binance Chain blockchain, provides the same advantages for users as it did previously when it ran on Ethereum. Users still benefit from lowers fees.

Why Binance Chain?

The launch of Binance Chain is an important milestone in the company’s plan to provide a complete set of infrastructure for the decentralized digital asset sector. The firm outlined these goals in the announcement over a year ago saying:

“As a public blockchain, Binance Chain will mainly focus on the transfer and trading of blockchain assets, as well as provide new possibilities for the future flow of blockchain assets. Binance Chain will focus on performance, ease-of-use, and liquidity. Binance Coin (BNB) will be upgraded to exist on its own blockchain mainnet, becoming a native coin. At the same time, Binance will transition from being a company to a community.” 

Given Binance’s track record, the launch of Binance chain may be cause for celebration for the greater cryptocurrency sector, as it may mean the launch of more services such as the much-anticipated decentralized exchange. BNB holders, on the other hand, could potentially benefit as the token grows in value as more users sign up for the platform.

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