INTRODUCTION
Addressing the transition, it is essential that the migration from BNB 1 to BNB 2.0 chains occurs seamlessly and with minimal disruption. The desired outcome is that at the conclusion of the upgrade, the entire protocol and community exist upon the BNB 2.0 chain. With the closure of the BNB 1 chain already being proposed, we establish a clear target for complete migration and a single protocol entry.
The BNB 2.0 chain has many improvements and features not found in the current BNB chain, which would be immensely beneficial if applied uniformly across the protocol. An example would be superior POS/DAO infrastructure, to which DAO features and future improvements are much easier developed and maintained. In implementing BNB 2.0 chain features, this creates unification. It becomes clear that the BNB 2.0 chain ought to act as a single point of development and entry for the protocol, again reiterating the necessity of a BNB 1 chain closure. This concept of unified development and a single protocol entry is of fundamental importance and has influenced many decisions throughout this proposal.
The BNB Beacon Chain Mainnet Sunset upgrade will bring several key benefits and changes to the protocol. The primary impetus is to discontinue the current version of the Beacon Chain as it exists today, directing all development efforts toward the unified BNB 2.0 chain. Presently, two chains exist (independently functioning BNB and BNB 2.0 chains) and thus so too do two unique communities and liquidity pools. This is neither maintenance efficient nor scalable and thus a disbandment of the BNB 1 chain becomes a prerequisite to long-term success.
PURPOSE OF THE UPGRADE
The purpose of the BNB Beacon Chain Mainnet Sunset Upgrade is to enhance the stability and robustness of the BINANCE Smart Chain network and improve the long-term economic security of the ecosystem. A secondary goal of this upgrade is to expedite the decentralization process for the BNB validator set. The upgrade is bifurcated into two distinct transactions. The first transaction initiates the Mainnet Sunset, transitioning the BNB BEP-2 asset to become a dual-issuance BEP20 asset, creating a pegged value and corresponding BEP20 asset on the Binance Smart Chain. This transaction will have a public notice period of two weeks and requires no actions by BNB holders, Binance DEX users, or Binance.com users. At the end of the two-week notice period, BNB BEP-2 functionality will be frozen and the corresponding BEP20 tokens will be burned. The BNB BEP-2 asset on the Binance Chain will become a native BEP2 asset via a cross-chain system.
The second transaction will be the activation of the BNB Mainnet, occurring at a later block height after the Maintenance Upgrade has concluded. Following this upgrade, the BNB BEP20 asset will become the native asset on the Binance Smart Chain.
BENEFITS OF THE UPGRADE
The migration to the Beacon Chain Mainnet represents a significant milestone in the development of BNB Chain 2.0. The transition from a BNB Chain running in parallel to the existing BNB Chain (Phase 0) to a standalone BNB Chain (Phase 1) has a number of significant advantages including efficiency and security gains, more flexible economic finality, and one-way ETH to BNB asset migration. The gains in efficiency will be immediate by virtue of direct smart contract support being postponed until Phase 1. This means that there will be no EVM or smart contract execution on the Beacon Chain Mainnet and thus, no overhead in managing both BNB Chain states. By transitioning to a shared security system, the BNB Chain can leverage the security of the rapidly growing ETH 2.0 to solve its security bootstrapping problem. High security with low overhead is of paramount importance in protecting the value of BNB assets. Current and future PoS blockchains share similar sentiments on the necessity for economic finality to compete with traditional PoW chains. Economic finality on the beacon chain will grant finality in the value transfer of BNB assets on both chains. Lastly, implementing a one-way bridge from the BNB Chain ERC20 assets to BNB native assets is a key element in minimizing the eventual disruption from BNB Chain 1.0 to BNB Chain 2.0. This will allow for a gradual and seamless migration in a timeframe that can be tailored to the desires of various BNB asset holders.
SCOPE OF THE UPGRADE
The scope involves the transfer from the existing BNB BEP2 token to BNB BEP20 token (native on BSC). The BEP20 BNB, which is the native coin on Binance Smart Chain, will replace the BEP2 BNB as the Binance Chain becomes the beacon chain for Binance Smart Chain. As a native asset on Binance Smart Chain, BEP20 BNB will provide more liquidity and utility which can promote asset transfer from one chain to the other through a pegging system. This will allow BNB to be more accessible while being cross-chain and increasing the ease of chain-hopping. You can read more about the advantages of BEP20 BNB here and the corresponding proposal to make the migration.
Please note that Binance Chain mentioned here is the original iteration of Binance Chain that uses Tendermint as the consensus mechanism. Binance Chain (original) will be rebranded to Binance Smart Chain while Binance Smart Chain will be the new branding for the current testnet of Binance Chain. This rebranding will go into effect sometime after the initial release of the Binance Smart Chain mainnet.
The BNB BEP2 token will not be supported on the Binance Smart Chain and all future development will take place on Binance Smart Chain. Cross-Fi applications that provide redirections and other means to increase BNB BEP2 liquidity to fund developments will not impact the destination of development/support of the native BEP20 token on Binance Smart Chain.
