Unexpected
Binance’s plan to launch a public storage chain is somewhat unexpected. It is a scenario that I had not predicted before. It also surprised many industry analysts and there was no sign of it beforehand. But this is Binance’s way of doing things, do it first and talk later. Binance’s size occupies almost half of the crypto industry, its position is higher, and its strategic vision naturally looks further than analysts. From an industry perspective, it is important to understand and interpret this matter. At this point, Binance (BNB to be precise) already has three public chains.
The first public chain (BNB Beacon Chain): launched in 2018, a public chain system developed based on cosmos sdk, now called BNB Beacon Chain, focusing on the on-chain DEX trading system. This is Binance’s earliest public chain system. CZ publicly stated as early as 2018 that the future of the exchange is decentralized. This is the first step in Binance’s strategic layout of shifting CEX to dex. This public chain has achieved Three major functions: 1. Turn BNB from ETH's ERC20 into a native basic asset of the public chain; 2. Realize Token issuance; 3. Realize on-chain transactions of Dex.
The second public chain (Binance Smart Chain was later renamed BNB Chain): In 2020, uniswap was born, creating a new type of on-chain transaction (swap) method and leading waves of defi waves. Unfortunately, the high fees of eth discouraged retail investors. BNB promptly launched the EVM-compatible Binance Smart Chain (BSC). The user experience is seamlessly migrated to eth. BSC's high TPS and cheap gas fees allow more retail investors to participate. Opportunities for defi. After 2 years of development, BSC's various data (daily transaction volume and number of active addresses) have exceeded eth. BNB has seized the opportunity of the EVM public chain.
The third public chain (BNB Greenfield): In February 2023, the white paper of the third storage chain was officially announced. According to Binance’s behavior, when the white paper was released, the development progress of the public chain was expected to be more than half complete, maybe 2 or 3 It will be launched within a month. Why is the third chain a storage public chain? What is the difference between it and the existing storage public chains AR and Filecoin? Let’s talk about my understanding.
Why storage track?
As early as 2021, I wrote an article about the storage project AR. At that time, NFT transactions were on the rise. NFT (mainly small pictures) assets require safer and more redundant storage solutions, and centralized servers exist. There is a single point of risk, so decentralized storage is an urgent need for the NFT market. At that time, the storage track mainly had two star projects, one was the relatively popular Filecoin, and the other was AR, both of which achieved decentralized storage. The technology paths were different. At that time, they were more optimistic about AR that could be paid once and permanently stored. Subsequently, the price of AR increased to nearly 100 US dollars. Binance’s choice of storage track for its third public chain is mainly based on two needs. First, the development needs of the blockchain industry itself; second, the development needs of Binance and Binance Chain.
1. The needs of the blockchain industry itself:
The development process of the blockchain industry is a process of continuously creating virtual assets. The first-generation blockchain represents BTC, creating the native assets of the blockchain, and the public chain realizes the transfer of native assets; the second-generation blockchain represents ETH, creating Token assets based on the public chain, and the public chain realizes The issuance, transfer and on-chain calculation of digital tokens (Token); and the third generation blockchain will create more types of digital assets. The NFT of small pictures is just the beginning. Imagine that in the future, a song, a song New songs, a new movie, a piece of executable code that can realize a certain function, personal consumption behavior data, a literary work, a set of design drawings, etc. These have far stronger storage requirements than NFT (pictures).
This time Binance laid out the storage public chain and rethought the storage track, and found that the value of storage was still underestimated. Why do you say that? Storage itself is an endogenous demand for the evolution of the blockchain industry. Storage itself not only has consumption value, but also has the value of creating assets. Creating asset value has been ignored before. Creating asset value is a broader narrative space for storage.
Peruvian economist Hernando Soto revealed in his famous "Secrets of Capital" "the reasons why the Western world can create a more prosperous economy than South America under the same capitalist system." Because the laws of the Western world have brought more resources (entity and non-entity) into the scope of law and confirmed their rights, thus turning resources into assets that can be traded and circulated in the market, and the market is the best place to allocate resources. Effective ways to allow them to exert greater value in the social economy. To give a domestic example, before the real estate reform in 1998, there was no real estate market in China. Most of the houses were allocated by units. Residents only had the right to live. The houses only had use value and had no transaction or asset value. But after the real estate reform, , defined the house as a tradable commodity, issued a property ownership certificate to the house, and suddenly activated the multi-trillion real estate market. The house in the hands of residents became a truly liquid asset, and it also created wealth for countless holdings. Industries and individuals who house and trade houses.
Similarly, for storage public chains, a similar comparison can be made. How to turn data into an asset based on storing data? The core is also to confirm the rights. Someone wrote an electronic version of a novel. For safety reasons, he put the electronic version of the novel on the storage public chain. At this time, the storage public chain is a decentralized storage tool for the author. , the author pays the rental fee. However, this novel has a variety of rights, such as copyright, copyright, film adaptation rights, TV series adaptation rights, game adaptation rights and other series rights. These rights are valuable and can create profits for the future. The chain is sure to After rights are assets.
These cannot be achieved by relying on the storage public chain alone, and require the cooperation of smart contracts and DAPPs. Perhaps they are limited by the structure of the storage public chain itself. At present, both AR and Filecoin’s smart contracts are not ideal, and Binance is trying By storing the combination of public chain (bnb greenfield) + Binance Chain (BSC), data can be turned into assets. For the bnb chain ecology, the ecological prosperity on the chain also requires more asset classes and asset quantities. , the mutual chemical reaction between assets will evolve more gameplay and innovation.
2. Binance and Binance Chain’s own needs
The Binance exchange and various financial businesses are heavily dependent on centralized cloud services such as Amazon's AWS. There have been many transaction freezes and downtimes caused by AWS failures in the past. The number of users, transaction scale, and business scope of Binance today are no longer what they were back then. Data problems would be catastrophic risks. The security and reliability of data storage are extremely important, but as Binance expands, The external environment has also undergone adverse changes for Binance, and the risk of placing the entire trading engine and data on AWS will become increasingly greater. Based on its own considerations, Binance also needs a storage solution that is more decentralized, censorship-resistant, and redundant. If there is no mature one on the market, it will have to roll up its sleeves and do it on its own. Therefore, Bnb greenfield will also be part of Binance’s own future needs. In the same way, Bnb beacon Chain and Bnb Chain's on-chain data, as well as the data of various dapps on the chain, also have broad decentralized storage needs.
Main features of BNB Greenfield
After reading the English white paper of BNB Greenfield, I summarized several main features compared to AR and Filecoin:
Feature 1: BNB Greenfield, BSC and Dapp are a trinity combination structure, which makes it a reality to convert stored data into financial assets. BNB Greenfield and BSC use the same address, and assets can be cross-chained through its own bridge. BNB Greenfield's BNB is implemented on BSC through the cross-chain bridge Peg. The information of data assets encapsulated by BNB Greenfield can be mapped to the BSC smart chain, and various combinable operations of mapped assets can be implemented on the BSC smart chain, such as transactions, loans, leases, etc. Taking the example mentioned above again: the author can encapsulate the novel he created on Greenfield, then map it to BSC, and turn the reading access right into a token on BSC. The user can only access the greenfield novel if he purchases this token with bnb. rights to the file, so that the novel in storage becomes a revenue-generating asset.
For another example, a programmer develops an executable program and encapsulates it in BNB greenfield. It forms an asset by mapping to BSC. Users can purchase the corresponding token of BSC to obtain the right to use the encapsulated program. One token is executed once, and similar application cases will occur in the future. There will be a lot.
Feature 2: Economic model with BNB as the core. As a new public chain, Binance did not issue new native assets, but continued to use BNB to achieve "one coin, three chains", one token, three public chains. In the economic model of BNB greenfield, users rent storage space and pay BNB; nodes provide the security of the public chain, and the income is BNB; similarly, the income provided by storage service providers is also BNB.
Feature 3: For the first time, the streaming payment function is implemented in the storage public chain. What is the streaming payment function? There are already many projects under development, such as Superfluid. That is, you pay a fee, not in one lump sum to the other party, but gradually based on time. For example, in BNB Greenfield, the user pays a fee to the service provider. This fee is the rent for the next year. The service provider will not receive the payment immediately, but will collect it based on time. As time goes by, the user The fee is gradually paid to the service provider every second, every minute, and every hour. This has the advantage that for relatively large transactions, if there is a problem with the intermediate service provider or the user's needs change, it can be stopped. , users only need to pay for the storage time that has been used.
Feature 4: Taking into account ease of use, efficiency and decentralization. BNB Greenfield's solution is not as decentralized as AR and Filecoin, but it is easier to use and more efficient than AR and Filecoin. These are the two sides of the logical balance. One side is centralized storage, which is highly efficient and easy to use, but has high security risks; the other side is complete decentralization, which is low efficiency and poor usability, but has higher security. BNB Greenfield is in the middle of the two, looking for a balance between the two. This is also the consistent style of Binance. It is not decentralization for the sake of decentralization, but also considers the user experience and feelings. It is also mentioned in the white paper that with the continuous development of technology in the future, more decentralized solutions will be studied without sacrificing user experience.
Impact on BNB’s value
After BNB Greenfield is launched in the future, the market's valuation model for BNB will have to be rewritten. BNB's three public chains link these three different public chain worlds respectively: 1. BNB Beacon Chain can be connected to the cosmos ecosystem through IBC; 2. BNB Chain realizes EVM-compatible cross-chain public chains; 3. BNB Greenfield It will realize the first public chain that combines smart contracts with decentralized storage, creating new asset types. There is no doubt that this is another major milestone for Binance to empower BNB. Of course, the specific effect on BNB will have to be observed after the public chain is officially launched, but from a narrative perspective, it is possible to create another tens of billions Dollar level narrative track.
In 2020, I made a market value prediction for BNB, which has been realized in 2021. I am not very interested in making specific price or market value predictions in the future. Price predictions at specific points are no longer important. As long as the blockchain industry is growing, Binance As Binance continues to grow and innovate and empower BNB, the value of BNB may rise beyond what most people can imagine. If you are optimistic about the encryption industry in the long term, BNB is a must-have item in your portfolio. Just long-term allocation is enough. Short-term price rises and falls are no longer important.