What is Binance Smart Chain? - Explained

What is Binance Smart Chain(BSC)?
BSC - A Parallel Chain to Enable Smart Contracts

Binance Smart Chain, shortly termed as BSC is a new blockchain that runs parallel with the Binance Chain which is enabled by smart contracts built to be Ethereum Virtual Machine (EVM). BSC is built to provide the ability to develop and deploy DApps on Ethereum which is on Binance’s New Blockchain.

Binance Smart Chain boosts the functionality and compatibility with Ethereum Virtual Machine (EVM). The BSC is launched with the goal to provide support to the Ethereum tools and DApps.BSC supports for cross-chain transfers, creation of pegged coins. These pegged coins on BSC, BEP 20 act similar to ERC 20 tokens.

How does Binance Smart Chain (BSC) Works?
Let us look at the working of Binance Smart Chain in detail.

Consensus Algorithm
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.

As Binance conducts coin burns regularly, the supply of BNB decreases over time.

Cross-Chain Compatibility
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.

The easiest way to move tokens from one chain to another is the use of Binance Chain Wallet, which is available on Chrome and Firefox.

DeFi with Binance Smart Chain
There are many digital assets such as BTC,ETH,EOS,LTC and XRP which are already existing on the Binance chain as Peggy Coins.These coins are tokens pegged to assets on their own native chains.By doing this, we can effectively port those assets on the Binance Chain.

The flexibility offered by Binance Smart Chain, the way to transfer assets from one chain to another, makes this BSC be used in the growing DeFi world.

DeFi platforms like Pancakeswap, Uniswap allow users to exchange assets, engage in yield farming and vote on proposals. There are many DeFi projects such as BurgerSwap,BakerySwap which work the same.

Thus, this Binance Smart Chain has wide opportunities for Decentralized Finance and Dapps as whole.

Explore here -> Introduction to Binance Smart Chain

This Binance Smart Chain is adopted for smart contract development, decentralized application development and defi protocols and more. We Bitdeal - Leading Blockchain Development Company extends our services of developing and deploying smart contracts, dapps, defi protocols on Binance Smart Chain in addition to Ethereum, EOS and more.

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