Binance Smart Chain (BSC) has become one of the most powerful blockchain platforms in the crypto space, and the popularity of BSC in recent months also somewhat threatens its long-standing dominant position. Ethereum (ETH). So what is Binance Smart Chain? Does it work out? What advantages does the BSC platform have that make many projects leave ETH? What are the investment opportunities with BSC? Let’s find out with I Love Bitcoin through the article below.
What is Binance Smart Chain (BSC)?
Binance Smart Chain (abbreviated: BSC) is a “smart” blockchain platform running on the Ethereum virtual machine (EVM), built and developed by the world’s largest cryptocurrency exchange Binance. BSC runs in parallel with Binance Chain, Binance’s own blockchain platform launched in early 2019. BSC helps create smart contracts, compatible with Ethereum’s EVM virtual machine, and also supports Cross-Chain with Binance Chain.
In fact, Binance Smart Chain is a blockchain clone of Ethereum that initializes the blockchain using the Proof of Staked Authority (PoSA) algorithm – a combination of the two Proof of Stake (PoS) and Proof of Authority (PoS) algorithms. PoA). By design, BSC offers simultaneous cross-chain compatibility from all three networks BCS, BNB and Ethereum.
Binance Smart Chain does not create a new token, it uses Binance Coin (BNB) as the native token. This greatly improves the efficiency and scope of applications of Binance Chain and BNB.
How Binance Smart Chain Works
In the BSC ecosystem, the network’s validators are those who stake a certain amount of BNB and then receive transaction fees when they validate blocks that are approved on the network.
As mentioned, Binance Chain and Binance Smart Chain are designed to work in sync, and Binance has built-in cross-chain compatibility between them. Assets can be moved quickly between blockchains, thus combining the fast transaction capabilities of the former with the smart contract functionality of the latter. Similarly, Binance Chain’s BEP-2 and BEP-8 tokens can also be swapped with Smart Chain’s BEP-20 tokens.
Additionally, compatibility with EVM means dapp creators on other blockchains can migrate them to Binance Smart Chain with relative ease. This could be particularly appealing to dapp operators as Ethereum continues to grow and gas fees rise, although Ethereum’s planned transition to Proof-of-Stake model in Ethereum 2.0 could alleviate some concerns about the current scale.
Features of Binance Smart Chain (BSC)
BSC has a short block generation time and low transaction costs to help new users convert assets quickly with low transaction costs.
The high performance network can generate a block every 3 seconds.
Binance Smart Chain is an independent blockchain that provides security and safety to all users and developers.
Smart Chain’s interoperability between two blockchains will enable cross-chain communication and scaling for high-performance dApps that expect a fast and smooth user experience.
Binance Smart Chain is EVM-compatible and will support all existing Ethereum engines with faster and cheaper transactions.
Smart Chain’s on-chain governance through the PoSA consensus mechanism, which incorporates 21 transaction validators, will bring decentralization and greatly increase the community’s decision-making capacity.
A growing ecosystem with millions of users on Binance.com and Binance DEX.
Projects running on Binance Smart Chain
Thanks to cross-chain integration, almost Binance Smart Chain inherit and extend existing dApps of the Ethereum blockchain. It can be said that Binance Smart Chain is the most optimal solution with EVM compatibility that allows to support Ethereum tools with faster speed and reduce transaction fees.
Currently, there have been many projects in many different fields moving to BSC and wanting to participate in this ecosystem. Some of the featured projects include:
- Oracle: ChainLink, Band Protocol,…
- Audit: CertiK, Quantstamp,…
- Graph/Query: The Graph, Bitquery,…
- Bridge: BCS Bridge, Anyswap,…
BSC’s development roadmap and vision
BSC development roadmap
1. Period 4/2020 – 9/2020
This is the period when the Binance team publishes the whitepaper for Binance Smart Chain and improves the BSC from Binance Chain. During this period, they launched Testnet with cooperation from ChainLink, Ankr, Band Protocol, ..
By September 2020, BSC was officially launched with the application of BNB token.
2. Period 9/2020 – 3/2021
During this period, the cash flow in DeFi was mainly in the Ethereum system. DeFi at Binance Smart Chain is still very “empty”. However, BSC has a lot of smart strategies including Most Valuable Builder program, Build Reward Program with a total prize of up to million dollars to attract developers from the BSC system.
Until about February 2021, when the transaction fees on Ethereum were too high, the Binance Smart Chain ecosystem formed a clear DeFi Stack, and the money flowed into BSC was huge. TVL in BSC DeFi has grown strongly at times to 40 billion dollars.
3. Period 3/2021 – 6/2021
March 2021 is the time when DeFi in BSC system develops very strongly, most notably PancakeSwap, starting as an AMM DEX, PancakeSwap has become the liquidity center for the whole BSC system and also expanded to many other areas. .
By June 2021, DeFi at BSC was somewhat saturated, this is also the time when the NFT trend is taking over. Binance also announced that around June 2021, Binance will launch the NFT Marketplace. Let’s wait and see what strategy Binance will have with NFT.
Future Vision of BSC
Building cross-chain financial infrastructure refers to building solutions that will support more connections between blockchains. With this, Binance Team aims to build more bridges between DeFi and CeFi (traditional centralized finance).
Unlocking the Internet of Value refers to the interaction of different dApps and the corresponding transfer of assets across these applications, powered by bridges that BSC is building.
Opportunity to invest and make money with Binance Smart Chain
Invest in tokens running on BSC
According to data from CoinMarketCap, the number of tokens belonging to the BSC system is very large, up to thousands of projects and divided into different fields. In terms of investment, this is not the best time to get in, because since the end of 2020 – the beginning of 2021, when BSC started to explode, these tokens have increased many times.
However, if you want to invest for the long term, this is not a bad price. Since compared to the market peak in April, now most tokens have split at least twice, even Bitcoin (BTC) has lost almost half of its value.
In my personal opinion, when looking to invest in DeFi or NFT tokens on Binance Smart Chain, people should choose top projects, projects with financial potential, the support of big names, Large generation system and quality team. A few examples for your reference: PancakeSwap (CAKE), 1Inch Exchange (1INCH), Venus (XVS), Alpha Finance (ALPHA), BakerySwap (BAKE), Dego Finance (DEGO).
Join Farming, Staking, Lending to earn rewards
Most tokens running on Binance Smart Chain can be Farm, Stake or Lend to earn rewards. Their mechanism is quite similar, everyone needs to know how to use a non-custodial wallet to deposit their money into the project’s Vaults or Pools to earn money.
Here is a popular platform readers can refer to:
- Farming: PancakeSwap, BakerySwap,…
- Lending: Venus, Cream Finance, ForTube, Alpha Finance,…
- Yield Aggregator: Beefy Finance, AutoFarm, Value DeFi, Acryptos,…
Epilogue
Here is the article “What is Binance Smart Chain? Opportunity to invest and earn money with Binance’s blockchain platform“, hope this article will bring a lot of useful information to readers, don’t forget to Like, Share and rate 5 stars below to support Toiyeubitcoin to make more good articles about the field of cryptocurrencies. Leave a comment if you have any questions, we will answer as soon as possible. Good luck.
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