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- Binance has come up with a new Blockchain that features Ethereum compatibility.
- The cause for Binance to launch BSC is the lack of flexibility and freedom to dapps developers on the Binance Chain.
- Binance Smart Chain’s token is set to be BNB. Thus, token holders are allowed to participate in staking and earning rewards.
Binance has come up with a new Blockchain that features the compatibility of Ethereum. And whose native token is set as BNB. Binance is a cryptocurrency exchange for the provision of a trading platform for various cryptocurrencies. It was founded by Changpeng Zhao.
This new blockchain is the Binance Smart Chain (BSC) and will have smart contract features similar to that of Ethereum. According to the whitepaper released on April 17, 2020, Binance reasoned out as to why it has added Ethereum compatibility to its new blockchain. The whitepaper states, to make full use of the relatively mature applications and community, BSC has chosen to add Ethereum Compatibility. It is also acclaimed that Ethereum is the first practical and widely-used Smart Contract platform.
Reason to launch Binance Smart Chain
The cause for Binance to launch BSC is the lack of flexibility and freedom to dapps developers on the Binance Chain. Binance Chain (BC), powers the decentralized exchange called Binance DEX. To add improvements and to compensate for the features Binance Chain lacks, Binance has launched Binance Smart Contracts.
Binance Smart Chain will run parallel to Binance Chain and also, interoperability will be enabled. Binance elucidated that the Binance DEX will remain on both chains as a liquid exchange venue of assets. It stated that the dual-chain architecture will result in empowering the users to build their decentralized apps and digital assets on one blockchain. It will also let the users take advantage of the quick trading in order to exchange on the other.
BNB holders can participate in Staking
As mentioned above, Binance Smart Chain’s token is set to be BNB. Thus, it signifies that holders of the token are allowed to participate in staking and to earn rewards.
Binance enlightens that BNB holders are provided with an attractive opportunity to stake BNB. It also added that the staking would result in supporting the development of the Binance Smart Chain and the earning of rewards.
According to Binance, the BSC validators included in the current validator set will be given rewards with transaction gas fees in BNB. Binance further notified that there would be no mining rewards as that of the Bitcoin and Ethereum network. This is since BNB is not an inflationary token. The gas fee itself will be the major reward for validators.
The crypto exchange stated that all of the existing Ethereum tooling will be supported by BSC. In addition to faster and cheaper transactions.
Regardless of what is stated, the move appears to create space for Binance into a competitive edge. Therefore, it is a clear indication that Binance has paved a way for itself to compete with Ethereum. Ethereum is the second-largest public blockchain.
