Just yesterday, Binance Smart Chain was on Twitter trend table but you are a crypto trader without knowing what Binance Smart Chain is about.
The only rhetorical question on your lips was probably “what is Binance Smart Chain?”
Firstly, you need to understand that Binance is one of the global cryptocurrency exchange platform launched in 2017 with Chanpeng Zhao as the founder.
The platform’s official token is the Binance coin (BNB) which has experienced up to a 585% increase within the first quarter of 2021.
This article will tell you all you need to know about Binance Smart Chain
What is Binance Smart Chain?
Binance Smart Chain (BSC) is the Blockchain network and home to Binance’s official token. It was launched in 2019 with the sole aim of processing fast decentralized transactions.
The Binance Smart Chain has the Binance Decentralized exchanges (DEX) which is one of the best out there.
In order for BSC to operate effectively, it boasts of smart contracts functions and it is compatible with the Ethereum Virtual Machine (EVM).
One of the ideas behind the creation of BSC is to run it side by side with the Binance Chain while introducing the not to novel smart contracts into its ecosystem.
BSC can not be regarded as being dependent on the Binance Chain because it can operate on its own when Binance Chain is offline.
Due to BSC’s compatibility with Ethereum Virtual Machine (EVM), it allows developers to port from Ethereum tools and Decentralized Applications (DApps). An instance of interoperability is an important characteristic of blockchain networks.
How does Binance Smart Chain operate?
BSC makes use of consensus and interoperability/cross-chain compatibility to enable a better user experience.
Consensus in the sense that the blockchain network uses a Proof of stake consensus algorithm to solve the recurring problem of proof of work.
This simply means that each user is allowed to make corrections to the blockchain according to the system rules.
The Binance Smart Chain proof of stake consensus algorithm allows users to stake BNB to become validators. Once they propose a valid block, they receive a transaction fee. This feature enables faster validation of transactions.
The cross-chain compatibility feature of BSC is the ability to transfer token from one blockchain to another.
This gives ways to larger trade being conducted on Binance Smart Chai with a more friendly user experience.
Binance Smart Chain projects
Binance has launched many projects in order to boost its DeFi efficiency. Some of these projects include the Pancake Swap, 1Inch, Alpha Finance and SafePal.
The projects are geared towards providing a better user experience with BSC working in parallel with Binance Chain.
While these projects have done well in turning the gaze of developers to the opportunities Binance provides which led to about 585% increase in the price of Binance coin (BNB), the projects are no doubt, without their shortcomings.
In March 2021, Turttledex, a Binance Smart Chain project that presented itself as a decentralized storage platform was confirmed to have ‘rug pulled’ tokens of users worth $2.5m.
It should be noted that in early March, Meerkat Developer on the Binance Smart Chain project also reported that a theft worth $31m was carried out which most users considered a rug pull by the organization itself.
However, Binance CEO, Chanpeng Zhao had earlier declared that in order to safeguard good user experience and security, the company will help users in tracking down all forms of rug pull carried out on the Binance Smart Chain.
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