What is BNB?
BNB is a cryptocurrency token created by the exchange platform Binance in 2017. BNB was initially launched as an ERC-20 token on Ethereum network for its Initial Coin Offering (ICO) where 100,000,000 BNB (50% of the total supply) was available for purchase.
BNB was created with an initial supply of 20,000,000 BNB to be gradually decreased by manual token burn, with no new BNB minted per block to discourage inflation. Within the Binance Exchange ecosystem BNB is used to pay for transaction fees at a discounted rate and can be staked for users to earn high yield APY returns.
Binance Chain and its BEP-2 token protocol was created in 2019 to facilitate fast, decentralized and non-custodial trading and to support decentralized applications (DApps) including Binance DEX (decentralized exchange). Binance Smart Chain (BSC) and the BEP-20 token standard was created to bring scalability to Binance Chain, allowing for full-scale integration of smart contracts and compatibility with the Ethereum Virtual Machine (EVM).
Binance Smart Chain is not a so called off chain or layer two scaling solution, rather BSC is an independent blockchain and Binance Chain and Binance Smart Chain operate side by side. This dual-chain architecture allows rapid trading to be enjoyed on Binance Chain, while powerful DApps can be built on BSC. Binance Smart Chain achieves three second block times using a Proof-of-Staked-Authority (PoSA) consensus algorithm powered by a set of 21 community validators taking turns to create blocks in a PoA manner similar to Ethereum’s Clique consensus protocol.
Validators are selected by amount of BNB staking and can change over time. Delegators are users who stake BNB via Binance Chain Wallet to support their chosen validator and help the validator achieve the required minimum stake to participate in validator elections. Binance Smart Chain has considerably low transaction fees in comparison to traditional Proof-of-Stake blockchains like the Ethereum network.