Binance Smart Chain is a Proof of Stake network that can run smart contracts, making it a cheap and fast alternative to the Ethereum network. DeFi services have overburdened the Ethereum network, so transaction costs have skyrocketed.
BINANCE CHAIN ??AND BINANCE SMART CHAIN ??(BSC)
The Binance Chain is a blockchain network built for the Binance cryptocurrency, the BNB. Originally, the BNB was an ERC-20 token on the Ethereum network that was issued in 2017 as part of an ICO before the stock market was launched. It was later transferred - in April 2019 - to the Binance Chain mainnet, where we can trade the BNB token faster and cheaper. In addition to sending and receiving BNBs over the network, Binance Chain has many other features.
In the case of the BSC, the idea is similar to that in the Ethereum network, while there the network's own token is ether, in which we pay the transaction cost, while in the case of Binance Chain such a function is performed by the BNB. We can issue new tokens (BEP-2 tokens) that can be traded on the Binance DEX (decentralized exchange), the Binance decentralized exchange that runs on the Binance Chain.
In order to make quick transactions on the Binance Chain, certain features were left out of the network that would have slowed it down, such as creating smart contracts. However, the problem can be solved with a network that runs in parallel with the Binacne Chain but does not overload it, for which the Binance Smart Chain (BSC) was created. Both networks would run independently if the Binance Chain were to shut down, leaving the BSC running. Although the Binance Smart Chain is a separate network, it is still a complement to the existing Binance Chain, allowing users to easily send tokens from one network to another. This allows them to use the fast transaction network and other services provided by the smart grid at the same time.
Tokens moving on the BSC are collectively referred to as BEP-20 tokens. These can be tokens created on the BSC itself, or a so-called “pegged” version of tokens running on another network, so we can move LINK to XRP or other tokens on the Binance Smart Chain network.
PROJECTS ON THE BINANCE SMART CHAIN ??(BSC) NETWORK
The world of DeFi (Decentralized Finance) is growing rapidly, with more and more applications being discovered and the number of users growing. The Ethereum network provided the most stable ground for these projects, as it is the largest smart contract network. However, Ethereum's network is overloaded, with almost 100% utilization of the network at all times, so transaction costs have also increased brutally. Until the system is fully transitioned to the Proof of Stake mechanism - which is another 1-2 years - the overload is likely to persist.
We have seen this problem before, it will come, many have mentioned “Ethereum killer” projects as an alternative and solution to the problem. Now that the problem had indeed occurred, it was expected that alternative networks would be used by users as well. One such option is the Binance Smart Chain, where you can realize everything you do on Ethereum. In addition, there is no need to worry for a while that the network will be overloaded thanks to the Proof of Stake Authority (PoSA) consensus mechanism, which is a more efficient method than the Proof of Work (PoW) currently used by Ethereum.
The Binance Smart Chain can also implement the kind of decentralized stock exchange that Uniswap represents on Ethereum, the largest project like this at BSC is currently Pancake Swap. Here, too, we can join liquidity pools or trade BEP-20 tokens, as we are used to on Uniswap.
The largest of the lending protocols is Venus, which provides a similar service as Maker, Aave, or Compound. Even $ 2 billion was tied up on Venus at the time of writing, $ 4.75 billion on Compound, $ 5.9 billion on Aave, and $ 6.7 billion on Maker.
The growth of the largest DeFi projects can be easily tracked separately, if you are interested in Ethereum, you can find summaries on this page, if you are interested in Binance Smart Chain, then on this page.
BINANCE SMART CHAIN ??IN NUMBERS
Like Etherscan, which monitors the Ethereum network, Binance Smart Chain has a site called BSCscan where you can track transactions, project starts, changes in transaction costs and other useful information.
We pay BNB for the transactions and measure the price of the transaction in gwei similarly to the Ethereum network. A gwei is 10-9 ether, or 0.000000001 ether.
We can also track the number of addresses available on the BSC network, but it is important to add that if 100 addresses are used on the network, it is not necessarily 100 different users. Nevertheless, from the ever-increasing number of titles, we can conclude that the number of users is indeed increasing.
There is also a growing trend in the number of transactions, but it should be added that smart contracts can drastically increase this number, as more transactions can run when run.
The network is not overloaded at all, even in its most utilized state we have reached only 20% of the capacity. However, this can grow rapidly as more and more users leak over and prefer to use this network. Assuming that the utilization of the network increases in direct proportion to the number of transactions, we conclude that the number of current transactions that the network can still handle can increase up to 5x.
SUMMARY OF BINANCE SMART CHAIN
Overall, I see no reason why more people shouldn’t use Binance Smart Chain instead of Ethereum in the future, as the same features can be found in both locations. Transactions on the BSC are faster and cheaper and this is true even if your turnover increases.
To mention not only positives, let’s turn to a negative or two. The fact that the projects running on the BSC are even smaller than those running on Ethereum, as well as less choice. It is possible that one or two bugs will arise later, as was the case with the projects starting at Ethereum.
We have interesting months and years ahead, the DeFi market is growing, changing and innovating incredibly fast, it’s hard to keep up if we don’t keep up. The question, I think, is not whether these projects will be successful, but how successful they are, as they are already successful in a sense.
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