Binance is a massive force within cryptocurrency circles. Its focus is much broader than the typical exchange, with the vision of creating an overall crypto ecosystem. Accordingly, the exchange launched the Binance Smart Chain in 2020, which is a robust platform today.
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This development introduced more dynamism to the industry. Binance is showing the possibilities one can have after creating a solid brand in this space. The precursor to this utility platform was the launch of the Binance Chain in 2019. However, the initial chain focused mainly on fast trading and did not feature the requisite functionality for supporting diverse applications.
BC.Game – About the Binance Smart Chain (BSC)
Binance developers sought to take the services the Binance Chain could offer a notch higher. This blockchain service allows developers to create dApps using smart contracts seamlessly. The earlier chain was limited to this functionality.
Expanding the scope of services is valuable in creating a complete blockchain ecosystem. One advantage of note is the compatibility of the Binance Smart Chain with the Ethereum Virtual Machine (EVM). Accordingly, this chain is capable of running dApps ported over from Ethereum.
Binance CEO ChangPeng Zhao didn’t just want to rebrand the original Binance chain. Instead, the Binance Smart Chain concept introduced a robust standalone chain that can work even if the original Binance Chain goes offline. Regardless, the two blockchains work in parallel to great effect.
The blockchain implemented the Proof-of-Staked Authority (PoSA) consensus algorithm to function. Different blockchains have different algorithms. Developers continually look for the most efficient solutions to new projects. PoSA is a hybrid of proof-of-stake and proof-of-authority consensus algorithms.
Accordingly, this platform requires validators to stake a minimum amount of BNB tokens. This stake allows them to play the valuable role of validating approved blocks for which they earn transaction fees and stake rewards.
The overall aim is for the two blockchains to work together in unison. Binance ensured that its two blockchains have cross-chain compatibility to allow users to transfer assets across them. This compatibility ensures that the two complement each other because the speedy trading capabilities of the Binance Chain and the smart contract functionality of the Binance Smart Chain fit like a glove.
By enhancing smart contract capabilities, Binance Smart Chain intends to have a seat on the high table. Currently, the Ethereum blockchain is the king of this sector. However, gas fees mean that developers have difficulties using Ethereum standard smart contracts. This market is ripe for disruption even though the competition will be intense after competitors like Cardano complete their rollout.
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Top Tokens in the Binance Smart Chain (BSC) Ecosystem
The following are some of the top tokens on the Binance Smart Chain ecosystem:
- Binance Coin (BNB)
BNB is the native coin of the Binance Chain and is one of the most significant coins in the entire cryptocurrency industry today.
The Binance team launched it through an ICO in 2017, committing to a maximum of 200 million BNB. This token allows users to conduct various activities in the Binance ecosystem. Additionally, it provides liquidity for trading fees, exchange fees, and other fees on Binance.
The development team has also conducted token burns to try and keep its value up. Having these measures reduces total supply and makes the coin a potential store-of-value asset. Binance has actively promoted BNB, including the creation of various partnerships to spread usage.
At press time, BNB traded at approximately $542.
- PancakeSwap (CAKE)
The emergence of PancakeSwap as a decentralized exchange has been remarkable. This token launched on the Binance Smart Chain (BSC) and intended to provide liquidity on the DEX while also meeting governance needs in line with the demands of a decentralized project.
Users can stake using CAKE and earn rewards. Liquidity providers are valuable in the DEX equation and ensure that trading and lending can happen seamlessly. CAKE will continue to grow in prominence as PancakeSwap rises further. At press time, one token was worth $19.79.
- BUSD
Stablecoins are a valuable asset in all cryptocurrency trading.
Binance USD is growing in stature as a stablecoin. It pegs its value on the US Dollar and has collateral to ensure this ratio remains constant. Users wary of volatility can hold BUSD when operating on the Binance Smart Chain.
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This service is possible with strict value controls. The token has regular independent audits to ensure that its dollar collateral is a tight ship. BUSD allows traders and developers who intend to maintain value to operate smoothly.
Notably, BUSD uses the ERC-20 standard. Its collateral is in American bank accounts, which Binance partner Paxos helps in maintaining.
As of writing, the stablecoin is one of the most liquid, coming third after USDT and USDC with a market cap of $12.7 billion.
Conclusion
Binance has laid down a marker with the launch of the Binance Smart Chain. This launch has expanded the scope of Binance services to accommodate a broader user base.
Major cryptocurrency exchanges like Coinbase are probably strategizing on how to compete better. Binance is not limiting its focus and intends to facilitate crypto commerce and compete directly with ecosystems like Ethereum and Cardano.
Binance Smart Chain (BSC) is proving to be a formidable entrant into the crypto landscape. This industry is all about efficiency. The BSC was a necessary upgrade to ensure that Binance could augment the services of its first blockchain and grow further. As it grew, the ecosystem began a breeding ground for innovative projects like CAKE and BUSD, key DeFi tokens supported by BC GAME.
