BSC relies heavily on the Ethereum developer community
Binance Smart Chain is an Ethereum virtual machine compatible blockchain capable of executing smart contracts and running applications. Announced in April 2020 by leading cryptocurrency exchange Binance, BSC complements Binance Chain, the first Binance blockchain launched in April 2019, by adding smart contract functionality to the Binance ecosystem.
While several attempts have been made over the past few years to develop an improved and high-performing smart contract-enabled blockchain, none have been as successful as BSC in such a short time. This can be largely attributed to the fact that the project is backed by Binance, one of the largest cryptocurrency exchanges in the world with over 15 million users. The recent growth of the ecosystem has sparked a heated debate about whether BSC can be trusted.
Key characteristics of the Binance smart chain
Binance Smart Chain uses a hybrid of delegated Proof of Stake and Proof of Authority, which it calls Proof of Stake. The consensus mechanism is in many ways similar to that used by EOS, as participants must stake BNB in order to be nominated for the network validator role. However, BSC is compatible with the EVM, which greatly simplifies the transition of projects and applications from Ethereum to BSC. Also, BCS is quite easy to use from a client's point of view, as wallets like MetaMask can be easily configured for BSC.
BSC uses BNB to manage the network. In addition to giving users a discount on trading fees, accessing Binance token offerings, and enabling them to participate in liquidity mining and crop farming on BSC, BNB is also used to pay network fees. BNB is fully pre-mined and part of its holdings are burned every quarter. According to Defistation, the current total BSC value locked (TVL) is over 12 billion.
Binance smart chain is a modified fork of Ethereum
Binance does not hide the fact that their Binance smart chain is almost an exact copy of the Ethereum ecosystem, but with lower fees and a very low degree of decentralization.
As a copy of Ethereum with almost the same functionality and much lower fees, BSC quickly gained popularity among DeFi users and developers. Astronomically high Ethereum gas prices have only accelerated the adoption of BSC.
Consequently, the Binance ecosystem has also experienced significant value growth. The exchange's native token BNB is currently trading at around $250 and is up 580% year-to-date. However, the use of BSC comes with some trade-offs, especially in terms of security and decentralization.
Read more about this platform at https://www.profvest.com/2021/10/binance-chain-otzyvy-obzor.html.
