Binance introduced its native BNB token back in 2017. Initially, it was running on top of the Ethereum network (ERC- 20 standard) but, two years later, the exchange designed its own blockchain called Binance Chain (BC).
Just like Ethereum, BC has its own token standards called BEP-2 and BEP-8. Soon after BC was launched, the ERC-20 BNB tokens were swapped with BEP-2 BNB on a 1:1 ratio.
BC was designed with a specific task of providing fast transactions and efficient token exchanges. As a result, Binance DEX (decentralised exchange) became the most important application of BC.
Binance later realised that a wider range of instruments needed to be offered by its blockchain, and Binance Smart Chain (BSC) was born in September 2020.
Difference between BC and BSC
BSC runs independently of Binance Chain, but the two blockchains are interoperable. They support the same token standards which makes cross-chain transfers possible. BNB is used for gas payments on both chains, which means that you must have some of Binance Coin to use wallets on either blockchain.
Unlike BC, BSC offers smart contract functionality and compatibility with the Ethereum (EVM) network. This implies that any dApp running on Ethereum can run on BSC with an extra advantage of lower fees and faster network.
The two chains have slightly different consensus mechanisms, with BSC considered as a more centralised network. It uses Proof of Staked Authority and only requires 21 validators to achieve agreement, hence very short block times.
Becoming a validator on BSC is not as easy as on many other blockchains. Just to be considered for the role, you must stake 10,000 BNB (~ $5 million). Even then, only top 21 candidates are chosen every 24 hours. Looking at thousands of active nodes on EVM, Binance Smart Chain appears rather centralised.
Average users can still participate in the network as delegators. In this role, you can vote for a particular validator by delegating your smaller stake to the preferred node.
Projects running on BSC
As mentioned above, BSC was made Ethereum-compatible. Public wallet addresses are the same on both chains which makes it easy for users to migrate between the networks.
PancakeSwap was created as a hard fork of Uniswap and made its way to top-2 decentralised exchanges in no time. It has a 15 percent market share and a daily volume of almost that of Uniswap. Many attribute PancakeSwap’s success to faster and cheaper transactions which makes yield farming and several other services more profitable to users.
Crypto gaming has also become an integral part of the BSC dApp family. Projects like MOBOX: NFT farmer and Crypto Bay have already built a substantial fan base by implementing a play-to-earn model. Their native tokens demonstrate a very positive dynamic, with MOBOX reaching an all-time high of $10.69 just four months after its launch.
Another notable project is Featured by Binance which acts as an NFT marketplace for Binance. By charging negligible fees for NFT upload, it hopes to gain momentum in the non fungible tokens market.
It attracted much attention when Maye Musk’s 15,000 NFTs went sold out in 10 minutes. More recently, Russian State Hermitage museum raised more than $450 000 by auctioning tokenised versions of art from its collection.
Conclusion
Binance Smart Chain is one of the most efficient blockchains out there with a strong technical backing provided by the exchange’s experts. Binance uses a lot of resources to increase the dApps’ audience and offer bespoke user experience.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.