What is Binance Smart Chain? Overview of things to know about BSC
What is Binance Smart Chain? Find out about the highlights, development roadmap and featured projects inside BSC right here!
What is Binance Smart Chain?
Binance Smart Chain is a blockchain built by “big man” Binance on Ethereum’s EVM virtual machine mechanism. Binance Smart Chain (BEP20) and Binance Chain (BEP2) are two blockchains that work in parallel and independently of each other, many people are still often confused on this point.
Although there is no infrastructure that stands out from other blockchains on the market like Solana, it is EVM compatibility that makes it very easy for projects built on Ethereum to migrate to Binance Smart Chain.
Binance Smart Chain has a native token of Binance Coin (BNB) – also the token representing the Binance exchange. This has made the BNB token influential not only on Binance but also in the BSC DeFi space.
Basic parameters on the Binance Smart Chain Blockchain:
- TPS: 100.
- Blocktime: 75s.
- Total Tx: 359 million.
- Avg. Tx fee: $0.5.
Difference between Binance Chain and Binance Smart Chain.
Highlights of Binance Smart Chain
Binance Smart Chain is EVM-compatible, which means that dApps on Ethereum can be swapped over to Binance Smart Chain with only minor changes.
Both Binance Chain and Binance Smart Chain share the same Native Token as Binance Coin (BNB), which helps create a lot of value for the Binance Chain and BNB Holder ecosystem.
Thus, some outstanding features on BSC can be mentioned as:
- As one of the ecosystems with DeFi TVL ranked in the top #2.
- Backed by giant Binance.
- Easy to attract developers because it is EVM blockchain.
- The ability to catch trends and keep up with the market very quickly.
Featured projects on Binance Smart Chain
Number of Dapps on Binance Smart Chain
The number of Dapps built on the Binance Smart Chain ecosystem is still unknown because new projects are deployed every day. The estimated number can be up to 450 projects. In there:
- DeFi (DEX – Liquidity): ~150 projects.
- NFT: ~80 projects.
- Lending: ~25 projects.
- IDO Platform: ~15 projects.
Oracle is a system that provides real-time data for blockchains and smart contracts. Thanks to Oracle, blockchain and smart contracts (on-chain) can interact with external data (off-chain).
The 3 prominent Oracle projects on Binance Smart Chain are:
- Chainlink: The market leading Oracle project has announced its successful integration with Binance Smart Chain.
- Band Protocol: In terms of market capitalization, Band Protocol is Chainlink’s most formidable competitor in the Oracle segment, Band Protocol announced its integration with Binance Smart Chain recently.
- Gravity: A Crosschain-enabled Oracle Network announces the integration of Binance Smart Chain.
AMM (Automated market maker) is a trading method that uses an algorithm to calculate the token price at the time of purchase. The AMM mechanism does not have a seller concept, instead, the smart contract will act as an intermediary, the seller puts the assets in a place called the liquidity pool, then the buyer will swap the assets they have with the assets. assets in the pool through smart contract.
The 3 prominent AMM projects on Binance Smart Chain are:
- Bounce: A Swap Token platform similar to Balancer.
- PancakeSwap: AMMs with a model similar to Uniswap, the mechanism to encourage users by Liquidity Mining.
- DODO: A DEX that solves the problem of impermanent loss by combining AMM with Oracle. Recently, DODO announced its integration with Binance Smart Chain.
Derivatives (or Derivatives) are assets whose value is derived from another asset or benchmark. Typical examples of derivatives are futures and options. In which buyers and sellers trade contracts that track the future prices of assets.
The 2 prominent Derivative projects on Binance Smart Chain are:
- MCDEX: A decentralized derivatives exchange. It is currently based on Ethereum and there are plans to add support for Binance Smart Chain.
- Hedget: A Protocol that allows users to create options based on the underlying asset. Hedget recently voted successfully and added Binance Smart Chain.
Synthetic (or Synthetic Asset) are digital representation tokens of derivatives. Where derivatives are financial contracts that provide customized exposure to the underlying asset or financial position, synthetic assets are a tokenized representation of those positions.
The 2 prominent Synthetic projects on Binance Smart Chain are:
- Spartan Protocol: A clone of Synthetix on the Binance Smart Chain platform.
- Linear Finance: A Platform that enables the creation, management and trading of Synthetics Assets. Linear Finance is integrating more Binance Smart Chain.
Lending (or lending) is a form of users using their assets or money to lend to other Borrowers (borrowers) at a certain interest rate. After a period of time, they will get back the principal and interest as originally agreed. Borrowers here can be other users, or organizations such as exchanges.
The 2 outstanding Lending projects on Binance Smart Chain are:
- Fortube: A Lending Platform developed by The Force Protocol. Currently, Fortube is the Platform with the highest TVL on Binance Smart Chain (according to statistics on DeFiStation).
- Hard Protocol: A Lending dAPP developed by Kava labs.
A project consisting of many small products combined, prominent projects in this segment on Binance Smart Chain, we have Venus Protocol, Alpha Finance Lab, Kava.
Partners & Investors
Binance Smart Chain is an ecosystem with many partners to strengthen its platform. Some notable partners (excluding dApp builds on BSC):
- Security: CertiK, Quantstamp.
- Oracle: ChainLink,…
- Binance Smart Chain Wallet: Coin98 Wallet, Math Wallet, Trust Wallet,…
Backers & Investors
Binance Smart Chain is an improved product from Binance Chain and was officially launched from September 2020.
BSC’s biggest backers is the Binance exchange, which is also an experienced investment fund in the market when it officially entered the crypto market in 2017.
Roadmap of Binance Smart Chain
Period 4/2020 – 9/2020
This is the period when the Binance team publishes the whitepaper for Binance Smart Chain and improves the BSC from Binance Chain. During this period, they launched Testnet with cooperation from ChainLink, Ankr, Band Protocol,….
By September 2020, BSC was officially launched with the application of BNB token.
Period 9/2020 – 3/2021
During this period, the cash flow in DeFi is mainly in the Ethereum system. DeFi at Binance Smart Chain is still very “empty”. However, BSC has had a lot of smart strategies including the Most Valuable Builder program, Build Reward Program with a total prize of up to million dollars to attract developers from the BSC system.
Until about February 2021, when the transaction fees on Ethereum were too high, the Binance Smart Chain ecosystem formed a clear DeFi Stack, and the money flowed into BSC was very large. TVL in BSC DeFi has grown strongly at times to 40 billion dollars.
Period 3/2021 – 6/2021
March 2021 is the time when DeFi in BSC system develops very strongly, most notably PancakeSwap, starting from an AMM DEX, PancakeSwap has become the liquidity center for the whole BSC system and also expanded into many other areas. .
By June 2021, DeFi at BSC was somewhat saturated, this is also the time when the NFT trend is taking over. Binance also announced that around June 2021, Binance will launch the NFT Marketplace. Let’s wait and see what strategy Binance will have with NFT.
So I introduced you to what Binance Smart Chain is and a few outstanding projects inside, of course there are many other projects built on Binance Smart Chain that I have not talked about.
Those interested can refer to the details of each puzzle piece with projects inside the BSC ecosystem, along with projections of potential and investment opportunities with BSC in the future through the following article: General BSC Ecosystem – Any opportunity for long-term investors
Don’t forget to regularly follow (or bookmark) the Binance Smart Chain column to get the fastest updates on all the information and outstanding events in the BSC ecosystem, along with the author’s comments to give you a glimpse. The most objective about that ecosystem!