What's new with Binance Coin (BNB)?
In 2024, Binance Coin lost its position to Solana (SOL) cryptocurrency for a few months, whose ecosystem has been one of the fastest growing over the past few quarters.
However, in August 2024, after the crypto market collapsed amid negative news, Binance Coin returned to fourth place in the overall cryptocurrency ranking, surpassing Solana in terms of capitalization by ~$8 billion.
The Binance Coin cryptocurrency is a core asset of the Binance ecosystem, particularly the decentralized BNB Smart Chain. As of August 2024, it ranks fourth among all blockchains after Ethereum, Tron, and Solana in terms of total blockchain value (TVL) of $4.3 billion.
Burning over $2 billion BNB
In April 2024, cryptocurrency exchange Binance conducted another 27th quarterly burn of BNB tokens. 1.94 million BNB worth $1.17 billion at the exchange rate at the time of the burn were removed from circulation, which amounted to about 1.3% of the total Binance Coin issuance.
In July, 1.6 million BNB tokens worth $971 million were destroyed after the 28th quarterly burn, bringing the total BNB issuance to 145.9 million as of August.
New ATH and correction
In June 2024, Binance Coin updated its all-time high, although most altcoins — even the leading Ethereum — failed to do so. At the peak, the price of BNB reached $720, but soon it went down. The reason for this was the general collapse in the crypto market, associated with the fall of the U.S. and Japanese stock markets, as well as payments to affected creditors Mt. Gox and Genesis Global.
As a result of the global correction, the price of BNB has fallen to $523 as of August 2024.
Layer 2 opBNB solution
The core network (mainnet) of opBNB's L2 solution for scaling the BNB Smart Chain was released in September 2023. With the BSC blockchain being one of the highest-performing and cheapest EVM-compliant networks, the question arises: Why does the Binance ecosystem need its own L2 solution?
The opBNB Layer 2 solution will reduce the load on the BSC blockchain, which is growing as the number of active users in the ecosystem increases, as indicated by BNB's appreciation and other metrics: the BNB Smart Chain is the leader among all blockchains in terms of the number of unique addresses, which exceeded 458 million as of August 2024, surpassing even Polygon (452 million addresses) and Ethereum (277 million).
opBNB is an L2 network based on Optimistic Rollups, the technology behind the Optimism Layer 2 solution. The opBNB network only collects transactions into packets and performs their preliminary validation. The entire transaction packet is sent to the main BNB Smart Chain network and validated there. The same scheme is used by the well-known L2 networks Arbitrum and Optimism in the Ethereum ecosystem. opBNB was the first and, as of August 2024, is the only Layer 2 solution in the BNB Smart Chain ecosystem.
In this way, developers have prepared the BNB Smart Chain ecosystem in advance in case of a rapid increase in activity and unforeseen loads. At the same time, other blockchains are likely to address such issues as they come, which is not the most farsighted as the situation with Ethereum has shown, whose developers have been addressing low network bandwidth and high transaction costs for several years since 2017.
Native stacking in the BNB Smart Chain
In April 2024, blockchain developers unveiled plans to add native liquidity stacking to the BNB Smart Chain protocol, one of the preparatory steps for terminating the BNB Beacon Chain. The BNB Smart Chain team selected the Lido and Renzo liquid steaking protocols as the primary providers.
In addition, in August of the same year, it also revealed the integration of its LSD token (liquid staking asset) stETH with the BNB Smart Chain network using Axelar and Wormhole cross-chain solutions. When a user stacks cryptocurrency through a liquid staking protocol such as Lido, in return, they receive an equivalent number of LSD tokens (or liquid staking tokens) that they can use in the DeFi market: add to liquidity, pledge, exchange for other assets, and so on.
BNB Chain's plans for 2024
According to the project team, in 2024, developers will focus on the most important aspects of ecosystem development: increasing the capacity of the BSC network and improving the speed and efficiency of [digital asset] storage to strengthen its position as one of the leading EVM-enabled platforms.
In addition to introducing a stacking engine into the BNB Chain ecosystem, the team also plans to implement initiatives such as:
- BNB Chain Fusion — a fork held in July 2024 as part of the closure of BNB Beacon Chain and a complete transition to BNB Smart Chain;
- The introduction of opBNB Connect, a protocol that enables the creation of custom Layer 2 solutions compatible with the opBNB L2 network and the underlying BNB Smart Chain blockchain.
The updates will also affect the opBNB Layer 2 solution itself, in which the team plans to implement the so-called AppChain architecture. They also plan to further improve L2 network performance to reach 10,000 transactions per second (TPS) and reduce transaction costs by implementing sharding and BNB Greenfield, the core network for decentralized storage, launching in October 2023.
