More and more companies are opting for the Binance Smart Chain and there is a real possibility that it could become much bigger than the Ethereum ecosystem. Let’s look at what this means.
What is the Binance Smart Chain?
Binance, the company behind the renowned digital exchange, launched their Binance chain in 2019, however it came with some downsides, namely the congestion it caused across the chain as well as its clunky scalability. Binance has now remedied this by launching the Binance Smart Chain (BSC) to grow the Binance ecosystem. It aims to be the leading blockchain in terms of transactions, speed and scalability. It manages to attain around 3 seconds per block and works with a Proof of Stake algorithm. Its goal is to become the go-to place for developers to build their own dApps. One of which, of course is the Binance digital exchange.
BSC, which runs in parallel to the original Binance chain, offers a much more scalable and functional approach for developers that is compatible with Ethereum, allowing interoperability between chains. That means that traders can enjoy fast trading on the original Binance chain and developers can use BSC for scalable apps. Developers meanwhile can also transfer their dApps and projects from Ethereum, as it supports Ethereum dApps and tools, without the prohibitive gas fees that come with Ethereum. This is a huge advantage for users of BSC.
As BSC is limited to just 21 validators, which are all monitored by Binance, the crypto exchange can retain direct control over the entire network and make sure fees are well under control. BSC is a standalone chain that doesn’t rely on the original Binance chain to function.
Users of the Binance smart chain can stake their own BNB coin holdings to become validators of the chain. That means if they put forward a block, then they can get transaction fees for all of the transactions conducted on their block.
A Groundbreaking Project on BSC
LiquidiFy is an ingenious project that will be launching on the Binance Smart Chain. It is a decentralized smart contract protocol that increases the liquidity of long-tail crypto assets. These are generally low liquidity assets with a low trading volume and low market capitalization. Those that hold these kinds of digital assets can use them through the LiquidiFy asset pool to turn them into synthetic tokens, LAT and LFY. These track the value of the long-tail assets which have been locked into the LiquidiFy liquidity pool, solving a major issue for many long tail asset holders, that of shallow liquidity. This could well make the Binance Smart Chain much more desirable as its long tail asset liquidity issues become a thing of the past.
There are no other projects out there doing what LiquidiFy are doing and there is a real interest for financial investors in long-tail assets. This is how investors can gain real exposure to this group of assets directly through the Binance Smart Chain.
The Future of BSC
In February 2021, it was reported that the Binance Smart Chain (BSC) had exceeded the daily transaction volume of Ethereum by 30%. Then a week later it was released that BSC was processing 70% more transactions than the Ethereum network. That day, BSC reported 2.5 million transactions over its network; with Ethereum processing 1.3 million transactions.
According to the report, "BSC daily transaction volume is up by 300% from YTD and bolsters an ecosystem of 100+ DeFi projects. Furthermore, the platform has succeeded in maintaining GAS costs as low as $0.04. Compared to Ethereum’s $5.53, BSC is 135 times less expensive!"
So the future is bright for BSC and potentially all those who sail on it.