Main conclusions

• Binance is the centralized organization behind a vast ecosystem that includes the world's largest digital asset exchange by trading volume, as well as a wide range of other products and services.

• BNB Chain was created by Binance, but has since evolved into a public, community-driven, decentralized blockchain ecosystem.

• Binance is now simply one of many participants in the BNB Chain ecosystem, rather than some dominant force with unilateral power. Binance does not own or control BNB Chain.

Binance's goal is to bring cryptocurrency to the masses and help the world evolve towards a decentralized digital future. Learn more about how Binance helped launch the world's largest smart contract blockchain by transaction volume. Currently, BNB Chain is a fully decentralized ecosystem governed by a community and a distributed network of validators.

Today, Binance is the world's largest digital asset exchange by trading volume. Back in 2017, it released the BNB utility token, which was originally intended to provide discounts on trading commissions. Since then, this token has had many other uses. One of them is paying fees for using BNB Chain, which as of October 2022 is the largest smart contract-enabled blockchain by transaction volume. Its ecosystem includes more than 1,300 active decentralized applications (DApps).

Due to Binance's initial involvement in the creation of this blockchain, many people mistakenly believe that Binance and BNB Chain are closely related - that it is the "Binance blockchain." However, it is not.

In this article, we will cover the history of Binance, the history of BNB Chain, and explain why the company founded by Changpeng Zhao and Yi He does not have ownership of the decentralized blockchain ecosystem it once helped create and still maintains.

What is Binance

Binance launched in July 2017 as a cryptocurrency exchange. Its main idea was to provide a simple and convenient platform for trading digital assets such as Bitcoin and Ethereum. Binance was co-founded by Changpeng Zhao, known as CZ, and Yi He.

Within just 180 days of launch, Binance became the world's largest digital asset exchange by trading volume. Five years later, the platform still holds a leading position, processing tens of billions of dollars in transactions every day. In April 2022, The Washington Post reported that on a typical day, Binance's spot trading volume is four times that of its closest competitor.

However, over the years, Binance has grown into more than just a trading platform. Now the exchange is only part of Binance's products, which has become a leading global blockchain ecosystem. It includes:

Binance Labs is an incubator that invests in blockchain projects and helps their development.

Binance Pay is a contactless and secure international cryptocurrency payment service.

Binance Academy is a free and accessible educational platform for everyone on blockchain and cryptocurrencies.

The Binance NFT Marketplace is a platform for creating and trading digital art and collectibles.

Binance Charity is a non-profit foundation for promoting charity using blockchain technologies.

All of them are aimed at fulfilling Binance's core mission - to be an infrastructure provider in the crypto space and help create a world where people can achieve financial freedom through the use of blockchain. Every person should be able to make their own decisions and control their own activities — regardless of who they are or where they come from.

These are the ideas behind the Web3 revolution, the next generation of the Internet in which decentralized blockchain technology allows people to control their data and actions online. According to CZ: “Centralized exchanges provide gradual user access to cryptocurrencies and can act as a bridge between centralized and decentralized systems.” Binance is at the forefront of this change, paving the way to freedom for millions, and potentially billions, of people around the world.

What is BNB Chain

Build N Build (BNB) Chain is a distributed blockchain network on which developers and innovators can build decentralized applications (DApps) as part of the transition to Web3.

Decentralization is one of the main characteristics of Web3 blockchain technology and its applications. The structure of such systems means that there is no single person or organization in the network that controls its operation. Instead, technology allows users to transact securely without having to rely on a third party to maintain trust. They also automate online interactions using computer programs known as smart contracts, allowing the creation of decentralized applications that support a wide range of products, from financial services (DeFi) to games (GameFi) and digital collectibles (NFTs).

As of October 2022, BNB Chain is the world's largest smart contract blockchain by transaction volume and daily active users. At the time of writing, BNB Chain has processed 3 billion transactions from 163 million unique addresses, and the ecosystem includes over 1,300 active DApps. The decentralized nature of the network means that anyone can create a product on BNB Chain without asking permission and potentially reach a huge audience.

The history of BNB Chain began in April 2019 when Binance launched a blockchain called Binance Chain. Then the BNB utility token, originally designed to reduce trading fees on Binance, was transferred from the Ethereum network, where it launched in 2017, and became a Binance Chain token. In September 2020, Binance Smart Chain was launched. The key feature of the new chain is smart contracts and the ability for developers to create DApps.

Finally, in February 2022, BNB Chain appeared, which includes BNB Beacon Chain (formerly Binance Chain) and BNB Smart Chain (formerly Binance Smart Chain). The task of the first is governance (staking and voting), the task of the second is to provide infrastructure for the development of a growing ecosystem of large-scale decentralized applications. BNB Chain exists as a decentralized, open-source, community-driven ecosystem.

Binance does not own or control BNB Chain

The connection between Binance and BNB Chain may seem ambiguous. Since BNB Chain came after Binance Chain (2019) and Binance Smart Chain (2020), many believe that it is another Binance product or project - like Binance Pay or Binance Labs. And since the BNB token was originally created to pay fees on Binance, it is often assumed that Binance owns or controls both the blockchain and the token to some extent.

However, there is one key difference between BNB Chain and Binance: BNB Chain is a decentralized blockchain ecosystem, while Binance is a centralized company that aims to provide services on Web3.

In practice, no single person or organization owns BNB Chain. Yes, Binance came up with the original idea, contributed to the BNB Chain code, and continues to support the blockchain. But Binance initially intended to make BNB Chain an independent and decentralized network. Any user can stake BNB to become a validator on the network. At the time of writing, BNB Smart Chain already has 41 active validators.

On the other hand, Binance is a centralized platform, although it is a highly distributed and horizontally structured organization. Ultimately, it is the company's leadership that determines the direction in which the ecosystem moves—even though the focus is always on the user's needs. Binance cannot dictate what BNB Chain does, as the future of the chain depends on its community and validator consensus.

Centralization vs decentralization

One of the benefits of Binance's centralized structure is that people know who is behind the services they use. They have someone to turn to if they need help. Binance prides itself on its user-centric approach and customer support that is available 24/7 to assist with questions, complaints, security issues, and any other queries. This is how Binance serves as a reliable springboard for millions of people discovering the world of Web3.

The user will never lose access to their cryptocurrency stored on Binance if they simply forget or lose their password. At the same time, Binance services meet all legal requirements in matters of regulatory compliance and anti-money laundering.

Meanwhile, BNB Chain is a decentralized network. This means it gives you more freedom to work on Web3: more independence and full control over your own data and security. Any user can access the blockchain and applications without requiring permission as long as they have a cryptocurrency wallet and BNB to pay fees. But to use such a network you need to have some experience, because if something goes wrong, there will be no one to turn to.

Read also: CZ on centralization and decentralization (2022)

Towards Web3

Ultimately, Binance and BNB Chain are part of the same movement towards Web3. Their goal is to help ordinary people around the world gain the freedom and security they deserve to manage their online transactions, data, and digital activities.

Binance's mission is exactly this. As a centralized digital asset exchange, it provides millions of people around the world with easy and secure interactions with cryptocurrency and Web3. As these users become more experienced, they will be able to explore the decentralized internet further with a DApp on BNB Chain.

According to Binance CEO CZ: “We are big proponents of decentralization. At Binance, we believe in taking incremental steps and providing users with a choice of all available tools. Binance is investing heavily in the development of CEX (centralized) and DeFi (decentralized) solutions, and we will continue to advocate for a future where freedom and security can go hand in hand.”

Binance will always be associated with BNB Chain, but will never control or own it since BNB Chain is a decentralized network. It has its own community and validators, and no one entity, especially a centralized exchange, can dictate the decisions made within it. On top of that, Binance is only a small part of the BNB ecosystem, not the other way around.

Read the following articles to learn more about BNB Chain, DApps, and CZ's views on centralization and decentralization:

• BNB Chain: the evolution of the Binance Smart Chain

• What are decentralized applications (DApps)

• CZ on centralization and decentralization (2022)