What is BSC?
Before talking about Binance Smart Chain, we need to briefly popularize Binance Chain (hereinafter referred to as BC). BC was launched in April 2019 and is the first public chain in Binance's dual public chain plan. In addition to the basic functions of token issuance, use and exchange, BC also has the characteristics of high throughput and low latency comparable to centralized systems. It is the transaction speed and good performance of Binance Dex. Guarantee of experience. On the basis of inheriting the professional financial product module of Binance Centralized Exchange, Binance Dex tries to use the advantages and concepts of decentralized exchange to solve a series of pain points such as false currency increase and opaque user assets of centralized exchanges. The control of assets is returned to the user.
After having a certain understanding of Binance Chain BC, let's return to Binance Smart Chain BSC. BSC can be regarded as a blockchain parallel to Binance Chain. At present, it mainly serves the Binance DeFi ecosystem and also makes Binance's dual public chain model more complete. BSC has a certain innovation in the consensus algorithm. It adopts the PoSA (Proof of Stake Authority) consensus algorithm, which combines the functions of the Delegated Proof of Stake (DPoS) and Proof of Authority (PoA) mechanism, and is built on a network of 21 verification nodes. , The second-level block time can establish a high-speed infrastructure for the DeFi protocol. The word smart in BSC is reflected in the functions related to smart contracts: BSC supports smart contract writing functions, compatible with the existing Ethereum Virtual Machine (EVM) and all applications and tools under its ecosystem , Developers can easily implement the migration and deployment of Ethereum DApp, saving development effort. Finally, as a parallel chain that can interact with BC, BSC natively supports cross-chain communication and transactions.
Why do you need BSC
At the beginning of the article, I made a point that in today's general environment, the addition of Binance is inevitable. Why am I so sure that Binance will join, and why does Binance's DeFi ecosystem need BSC?
Although as the top of the food chain in the currency circle and the top spot in centralized exchanges, Binance still knows how to be prepared for danger in times of peace and has been following the hot spots of the market. For centralized exchanges, no matter how rich the business types are, token trading is its unshakable foundation. Binance itself also achieved curve overtaking with 94 opportunities and a wealth of token trading pairs that year. But now, the times have changed! With the rise of rookie Uniswap and the popularity of automatic market maker AMM, a new generation of swap-type DEX with AMM mechanism as the core has benefited a lot from this wave of DeFi, sweeping away the weak image of DEX in the past. It is no exaggeration to say that the new generation of DEX and its liquidity providers are shaking the foundation of centralized exchanges and completely breaking the original dominance of centralized exchanges. The mainstream altcoins led by Ethereum have changed rapidly, from the main force supporting the trading volume of centralized exchanges to the terrible enemy that cannot be ignored in the future. While with a hint of irony, they are in line with the development trend of blockchain. reality.
Obviously, Binance also predicted these from market trends and started its own dual public chain plan. From the launch of BC and Binance Dex in 19 to BSC today, Binance has completed the technical implementation of DEX and smart contracts on its main chain, which has established the foundation for the Binance main chain ecology. In this year’s DeFi boom, the drawbacks of Ethereum have been amplified again. High-frequency transactions based on contract interaction have aggravated the congestion of the Ethereum network. The slow transaction speed and skyrocketing transaction gas fees have increased the Ethereum DEX. The transaction threshold has discouraged many small-value retail investors and restricted the development of Ethereum Dex. Such obvious pain points naturally become the goal of latecomers to concentrate on improving. In Binance’s dual public chain mechanism, smart contracts and DEX transactions are placed in two parallel public chains, BSC and BC, respectively. Users can develop DApps on BSC and benefit from Binance Dex’s high-speed transactions. Network congestion caused by high-frequency trading. After talking about the design of the Binance dual public chain, regarding the launch of BSC this year and the business development and ecological establishment of Binance DeFi, I personally think that the significance and necessity of BSC are reflected in the following aspects:
1. Smart contract
In the previous brief introduction about BSC, the smart contract writing function of BSC was introduced by the term Smart. DApps with different functions are the basic elements of the DeFi ecosystem, and smart contracts represent the underlying rules and operating logic of DApps. At the same time, programmability also greatly increases the scalability of BSC and realizes the diversification of DApp functions. Therefore, smart contracts are the cornerstone of the Binance DeFi ecological "building".
2. Compatible with EVM
BSC is compatible with the existing Ethereum Virtual Machine (EVM) and all applications and tools under its ecosystem, which greatly reduces the threshold for developers to develop DApps. Developers can easily implement the migration and deployment of Ethereum DApp, saving development effort. The significance of being compatible with EVM is that it can be compatible with the current hottest Ethereum ecosystem to the greatest extent, attracting developers and overflow funds on Ethereum, and has a significant role in helping the new Binance DeFi ecosystem start. Of course, there are many people who think that BSC is used as a starting point, and that BSC, like TRON, is only a copy of Ethereum to a certain extent. Different people have different opinions on this point.
3. Cross-chain function
The significance of cross-chain is to enrich the currency of the DeFi ecosystem and increase liquidity. Up to now, Binance’s "Token Canal" has completed the development of BTC, ERC20 on Ethereum (ETH, LINK, USDT, DAI, etc.), XRP, BCH, LTC, ADA, DOT, XTZ, EOS, ONT and other assets. Cross-chain interoperability. This means that these assets can be migrated to the Binance Smart Chain and become liquidity for DEFI operations.
