Introduction to Binance Smart Chain
Binance Smart Chain (BSC) is a blockchain network built for running smart contract-based applications. BSC runs in parallel with Binance’s native Binance Chain (BC), which allows users to get the best of both worlds: the high transaction capacity of BC and the smart contract functionality of BSC.
Binance Chain was launched by Binance in April 2019. Its primary focus is to facilitate fast, decentralized (or non-custodial) trading. Perhaps unsurprisingly, the biggest decentralized application (or DApp) on it is Binance DEX, one of the friendliest decentralized exchanges out there.
Binance Coin (BNB)
BNB is the Binance ecosystem’s native utility token, which can be used both for BSC and BC. BNB is mainly used to pay for transaction fees on the BC and Binance DEX platform, staking and asset transfers. BNB can also be used to run smart contracts on BSC.
For those who want to participate in network security or earn additional BNB rewards, BNB can be staked on a smart contract. And should users wish to, they can delegate their stake to a BSC validator of their choice and earn proportional rewards.
Furthermore, validators have the power to decide how much of the BNB they collected from gas fees gets to be redistributed to their delegators.
How does Binance Smart Chain work?
Binance Smart Chain uses Proof of Stake Authority (PoSA) where participants stake BNB for becoming validators and this BSC achieves 3 second block time.
If any participant proposes a valid block, they will receive transaction fees.
There is no block subsidy of freshly minted BNB, since BNB is not inflationary.
Binance conducts coin burns regularly, the supply of BNB decreases over time.
Binance Smart Chain is the complementary system to the already existing Binance Chain.This dual chain architecture is being used for providing seamless transfer of assets from one blockchain network to another.Through this rapid trading can be occured on Binance Chain with powerful decentralized applications built on the Binance Smart Chain.
BEP 2 and BEP 8 tokens from Binance chain can be swapped for BEP 20 tokens which is a new token standard introduced for Binance Smart Chain.
Decentralized Finance on Binance Smart Chain.
Digital assets — such as BTC, LTC, ETH, EOS, or XRP — already exist on Binance Chain as “Peggy coins.” These are tokens that are pegged to assets on their native chains. For instance, you might decide to lock up 10 BTC in order to receive 10 BTCB on Binance Chain. At any time, you can trade your 10 BTCB for 10 BTC, meaning that the price of BTCB should closely track that of native BTC.
flexibility afforded by Binance Smart Chain, assets from a number of different chains can be used in the growing DeFi space. For instance, applications like PancakeSwap allow users to trustlessly exchange assets (much like Uniswap), engage in yield farming, and vote on proposals. Similar projects include BurgerSwap and BakerySwap (if you’re new to crypto, hi! We’re big fans of decentralized exchanges named after foods).
Thus, this Binance Smart Chain has wide opportunities for Decentralized Finance and Dapps as whole.
Future with Binance Smart Chain
Binance Smart Chain is launched as a user-friendly alternative to Ethereum-based decentralized finance DeFi market. As there are more developers building DeFi Dapps on the BSC and users continue to follow, this ecosystem is expected to grow vertically with the addition of decentralized finance based dapps on the BSC network.
With the $100M seed fund by developers building dapps on Binance Smart Chain and this chain’s high adoption rate for the first three months boosts the network usage.Its interoperability with the pioneering smart contract platform which is combined with fast transaction settlement times and low transaction fees might be the right ingredients for the Binance Smart Chain to become the market leading dapp development.
Some of the DApps build on Binance Smart Chain
BLINK is a mining DApp build on the BSC.
Venus Money Market to enable digital asset lending and generation of synthetic stablecoins backed by a basket of various BEP-20 assets.
PancakeSwap — with 9.2k users, this platform is a decentralized exchange running on Binance Smart Chain, with lots of other features that let you earn and win tokens.
BurgerSwap is a DeFi platform that combines the trading liquidity providing elements of the Uniswap Protocol with staking and decentralized governance, super low fees, and fast transactions.
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