Binance Smart Chain outstrips Ethereum: New wave of dApp migration to BSC


In a pleasantly shocking turn of events, Binance Smart Chain overtook Ethereum in terms of daily transactions. As Gas fees on Ethereum climb to new heights, it seems like market participants have found a haven in BSC. Changpeng Zhao, CEO of Binance, responded to the news with optimism and stressed the importance of enabling cost-effective transactions.

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According to CryptoSlate, the tokens in the Binance Smart Chain (BSC) ecosystem are booming. The whole sector expanded by 135% in the past week alone. As DeFi has been witnessing exponential growth since last summer, the cost of asset transfers has also been steadily increasing. The exorbitant fees charged for Ethereum is understood as one of the primary factors driving users to BSC instead.  

What exactly is this much-hyped about Binance Smart Chain? Why is it a better alternative? Let's take a look. 

What is Binance Smart Chain? 

Binance Smart Chain (BSC) is a blockchain that runs parallel to Binance Chain, launched by Binance in April 2019 to facilitate fast, decentralized (or non-custodial) trading. Binance Chain had its shortcomings which Binance Smart Chain efficiently solves. The smart contract functionality and its compatibility with the Ethereum Virtual Machine (EVM) are some of the features that set Binance Smart Chain apart from its predecessor. In effect, Binance has managed to leave the high throughput of Binance Chain despite incorporating smart contracts into its ecosystem.

Now, both Binance Chain and Binance Smart Chain work side by side to facilitate seamless transactions. Although similar in many aspects, Binance Smart Chain is designed in such a way that even if Binance Chain goes offline, it can run without any glitches. Since BSC is EVM-compatible, it can support a multitude of tools and apps on Ethereum, making it easier for developers to port their projects over from Ethereum. With a little tweaking of some settings, it can be done in no time. 

Consensus

Using a Proof-of-Stake consensus algorithm, Binance Smart Chain achieves ~3 second block times. In particular, it makes use of Proof of Staked Authority (or PoSA). This way, participants can stake BNB to become validators. When they propose a valid block, the fee generated from the transactions in the block is transferred to the validator. Since the Binance team regularly conducts coin burns to maintain the deflationary nature of BNB, there is no block subsidy of freshly-minted BNB. 

Cross-chain compatibility

Binance Smart Chain was designed to be independent. It acts as a complementary system to the existing Binance Chain but can also function very well on its own. To facilitate the seamless transaction of assets from one blockchain to another, dual-chain architecture is employed. Binance Smart Chain will enable the development of powerful decentralized apps. This opens up a great deal of endless opportunities for users as they are now exposed to a wider ecosystem. They can apply BSC in myriad use cases. 

Tokens on the Binance Smart Chain stand a better chance of being listed faster and easier on Binance Exchange, e.g. CAKE tokens on PancakeSwap. The decentralized exchange dedicated to swapping BEP20 tokens on Binance Smart Chain is now listed on Binance, BKEX, MXC.COM and Bithumb Global, in addition to PancakeSwap. 


Who’s already there and how do they benefit?

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Some of the top-performing dApps running on BSC include PancakeSwap, JulSwap, Autofarm, BakerySwap and Venus. Applications like PancakeSwap allow the trustless exchange of assets, as followed on Uniswap on BSC. It is now one of the fastest-growing DEX/AMM running on BSC. Users can engage in yield farming, vote on proposals and do much more through the partnership. On the other hand, BakerySwap is the first AMM+NFT platform on the Binance Smart Chain. By running on BSC, the protocol aims to be a faster and cheaper version of Uniswap. BSC gives you more stability, flexibility and control over your assets. The adaptability of Binance Smart Chain enables assets from a number of different chains to be used in the growing DeFi space. 

More to follow suit

More and more dApps are extending their services on BSC. Recently, IDEX went live on BSC to improve its trading experience. The alliance is expected to give access to new assets and bring down the trade settlement costs by up to 1000 times. Earlier this year, Mirror, the synthetic assets protocol built on the Terra blockchain,  integrated a cross-chain bridge to Binance Smart Chain (BSC). Terra’s native token LUNA, the stablecoin UST, the governance token MIR and Mirrored Assets (mAssets) have been ported to Binance Smart Chain, bringing synthetic assets to the realm of BSC. 


Staking LP tokens on third-party platforms is nightmarish. Newbie users on BSC have a hard time coming to terms with the risks that lurk in the dark. SpaceSwap, an aggregator of the most trending services like AMMs, Indexes and NFTs in the DeFi space, is also a one-stop-station that unites the most innovative DeFi protocols and all the major DeFi protocols like Uniswap and other liquidity pools (Curve, Compound, Yearn, etc.) in one place. SpaceSwap recently announced its plans to integrate its advanced Shadow Staking technology into Binance Smart Chain. It will offer users already on BSC a safe farming technology.

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A lot of users are irked by the ever increasing Gas fees on Ethereum, which is what urges the SpaceSwap development team to bridge the gap between Ethereum and Binance Smart Chain. To benefit users from both platforms, SpaceSwap Ethereum and SpaceSwap Binance Smart Chain will be constantly interacting with each other. This will save users from the trouble and risks attached to staking valuable LP tokens on third-party platforms. 

It is evident that the benefits of migrating to BSC are not just limited to cost-effectiveness and speed. In the constantly evolving world of DeFi, scalability is a huge concern that Ethereum has not quite been able to resolve satisfactorily. dApps on a growth trajectory will benefit from the migration to BSC. 

Some of the dApps that would greatly benefit from integrating BSC include: the TokenSets protocol that bundles crypto-assets into tokenized baskets; the Minds crypto social network that allows users to earn token rewards for their contributions without impeding their freedom; and Aave open-source DeFi protocol.

Wrapping Up 

Alternative chains are getting stronger with each passing day, as proven by Binance Smart Chain. In the future, as more chains join the trend, more protocols will bridge the gap between this multitude of blockchains. Despite being just a fresher, Binance Smart Chain has proven its efficiency in a short space of time. It will hopefully push developers beyond the limits so they can make more powerful, scalable decentralized applications.

 

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SpaceSwap Captain
SpaceSwap Captain

I am the Captain of SpaceSwap team. Please join our project: www.spaceswap.app


SpaceSwap Captain
SpaceSwap Captain

The blog of the Captain of SpaceSwap team. The SpaceSwap project aims to become a one-stop-station for major DeFi protocols. Welcome to our project: www.spaceswap.app

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