What is Binance Smart Chain

Binance Smart Chain (BSC) is an alternative to the Binance mainnet at the base layer, with the ability to create and deploy smart contracts. The blockchain will run in parallel with the original Binance Chain, while being compatible with the Ethereum Virtual Machine (EVM). The leading cryptocurrency exchange seems to be starting to fully engage in the world of cryptocurrencies and expand from a mere trading exchange to the entire ecosystem with Binance Smart Chain.

Binance Smart Chain (BSC) is an alternative to the Binance mainnet at the base layer, with the ability to create and deploy smart contracts. The blockchain will run in parallel with the original Binance Chain, while being compatible with the Ethereum Virtual Machine (EVM). The leading cryptocurrency exchange seems to be starting to fully engage in the world of cryptocurrencies and expand from a mere trading exchange to the entire ecosystem with Binance Smart Chain.

Basically, the new mechanism operates as a standalone blockchain rather than a layer 2 or off-chain solution. In other words, Binance Smart Chain does not need to be associated with Binance Chain and can run independently even if other chains are shut down. From a design perspective, the two chains have similar characteristics.

How does Binance Smart Chain work?

Consensus

While the Proof of Work (PoW) mechanism is valuable, it has a negative impact on the ecosystem and also requires more than half of the network to maintain security. Binance Smart Chain uses the consensus mechanism Proof-of-Stake-Authority (PoSA) to keep the ecosystem in sync. PoSA is a mechanism for validators to stake BNB and prove the validity of transactions. This model is more efficient from an energy point of view and less expensive than other variants. Governance associated with the PoSA consensus algorithm of 21 transaction validators will provide decentralization and enable large-scale participation in market transactions.

Cross-chain compatibility

The need for blockchain interoperability is becoming increasingly important. Cross-chain compatibility enables interoperability between two or more blockchains. This feature makes it easy to swap assets from Binance Chain to Binance Smart Chain. Even in the case where the two blockchains work independently, they can still communicate with each other. Users can use the solution to convert three of Binance’s most popular BEP standards: BEP2, BEP8, and BEP20 tokens.

Ethereum Compatibility

In addition to native cross-chain communication, Binance Smart Chain is also compatible with the Ethereum mainnet for lower transaction fees and faster processing compared to normal base Time supports all existing Ethereum tools or coins.

In addition, Binance Smart Chain will support the existing Binance Chain, jointly maintain the high performance of Binance DEX (Binance Decentralized Exchange), and enable investors’ smart contracts. With EVM-compatible programming capabilities and native support for cross-chain communication, developers will enhance functionality.

BSC Yield Farm

BNB holders who are keen on staking BNB can also contribute to the development of Binance Smart Chain and generate incentives from this participation. Binance Smart Chain showcases all current DeFi projects on its Yield Farming dashboard. Users can easily keep track of all information and track the ones with the greatest potential integrated with BSC.

The major projects currently listed include Oracle Network (Chainlink, Band Protocol, Gravity), autonomous market makers (Bounce, Pancake Swap, Pancake Swap, DODO), derivative protocols (MCDEX, Hedget), and lending platforms (Fortube, Hard Protocol) and defi ecosystem projects.

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