Binance’s Beacon Chain is set to close in June, which may result in a reshuffling of tokens within the Binance ecosystem. While the closure of Beacon Chain was announced by Binance earlier this year, it has also generated increased attention for BNB Coin (BNB).
Beacon Chain was a temporary solution for coordinating consensus, and its closure will not directly impact Binance Smart Chain, as Binance monitored its decentralized networks through the BNB Chain. BNB token holders can still receive passive income by re-delegating their holdings.
Binance recommends using Binance Chain Wallet or Trust Wallet to re-delegate BNB or to find and transfer various types of legacy tokens.
By the end of May, Beacon Chain will cease all activities and archive its data, with the aim of transferring all its capabilities to Binance Smart Chain, which is currently the most active network. The DEX module of Beacon Chain will also be closed, as Binance Smart Chain has demonstrated its ability to support complex and highly active DEX trading.
Beacon Chain stopped issuing new tokens in April, and by the end of May, there will be no further opportunities to transfer remaining tokens from Beacon Chain to Binance Smart Chain. However, users can still transfer tokens out of the network as they move BNB coins and various tokens.
Several projects have already called for the migration of tokens, as some users have reported losses or difficulties in transferring tokens. It is advised to wait until June, the final stage of migration, to shut down Beacon Chain. In June, former users with addresses on Beacon Chain will have access to a special migration tool to swap all remaining assets.
BNB Beacon Chain holds various valuable tokens, including wrapped forms of BTC. Most tokens on BNB Chain and Binance Smart Chain are automatically bound and can be transferred between chains. However, some assets created during the Beacon Chain phase may not be bound to their Binance Smart Chain versions, and if users do not complete the manual process of migrating tokens, these assets may be lost. The ability to migrate niche tokens may vary depending on the issuer, and the migration steps may differ for certain projects.
The migration may also impact delegated BNB tokens, as they will flow into the new blockchain. Some delegators may choose to free up their funds, resulting in new tokens entering the market. There is a manual process to re-delegate BNB tokens and directly support Binance Smart Chain. The migration, which has been accelerating since May 15, comes at a time when BNB is considered a strong candidate for a rally.
To prevent loss, more than 95% of all BNBs will be migrated by the end of May, and any remaining tokens will be transferred or lost soon after. Binance will provide ample time for users to transfer as many tokens as possible. In June, Beacon Chain will have two Sunset forks, with the final one occurring at the end of the month. After that, the former Binance Chain tokens and BSC assets will merge, and Binance will operate on a single blockchain.
In the post-fusion stage, a tool may be offered to transfer any remaining tokens. Token issuers will still need to bind their tokens to ensure a seamless chain switch. After the fusion, Binance will only support one token standard, as the BEP2 token type will be phased out, leaving only BEP20 tokens.
BNB will continue to be an important asset for both centralized and decentralized exchange (DEX) activity. It is currently trading at $598.77, with volumes exceeding $1.3 billion in the past 24 hours. BNB activity has consistently remained above $1 billion in the last quarter, reaching a peak of over $4 billion.
BNB serves a crucial role in Binance trading pairs and liquidity pools on Pancake Swap, and approximately 6.28% of the BNB supply is staked for passive income.
This article was reported by Hristina Vasileva for Cryptopolitan.
