Binance Smart Chain: The Future of De-Fi

The Binance Smart Chain boasts faster and cheaper transactions than the Ethereum Network, which is excellent for De-Fi users.

By
Rich
on
November 12, 2020
Category:
BSC News

Introduction to the Binance Smart Chain (BSC)

The Binance Chain is a fast chain but has little support to run decentralized apps (Dapps) or decentralized exchanges (DEX). To continue innovating in the Decentralized Finance (De-Fi) space, Binance launched the Binance Smart Chain (BSC) in April 2019. The two chains run side-by-side, known as a “layer two chain” or “off-chain." This means that both chains run independently from each other. Even if the Binance chain were to go down, the BSC would still be able to run. The BSC offers ease of access as it is entirely Ethereum Virtual Machine EVM (EVM) compatible. The EVM makes it easy for developers to port their Ethereum projects onto the BSC. While the BSC is compatible with existing ERC-20 tokens, the BSC uses its own, the BEP-20 standard. This makes it possible to “peg” any existing coin onto the BSC.

 

The Appeal of BSC?

−      The BSC has a block time of five seconds compared to thirteen seconds on the Ethereum Network.

 

−      The gas fees pale in comparison to the costs on the Ethereum Network. The average is between $0.04 – $0.14. From experience, the lowest I have paid for gas fees on the Ethereum network is about $1.00 and up to $50.00

 

The cheap and fast transfers make it much more user-friendly, especially when using De-Fi apps, which require large amounts of transactions. Binance has launched Panama, which makes it effortless to begin using the BSC. It is a cross-chain bridge, making it easy to put funds on and off the chain. On top of this Binance aims to stimulate the BSC through the $100 million accelerator fund. The accelerator fund was set up to encourage high-quality De-Fi projects to build on the BSC. A few projects already have a percentage reserved to provide liquidity, these projects are DEX Automated Market Makers (AMM). The best-known ones being PancakeSwap and BakerySwap. Since the BSC is still young, new projects are born every day, and the user count has been increasing day by day.

https://www.bscscan.com/chart/address

DeFi on the BSC

The BSC is growing every day, both users (unique addresses) and projects. Many De-Fi projects are innovating on the BSC, such as PancakeSwap, BakerySwap, NarwhalSwap, ThugsFinance, BurgerSwap, SoftdrinkSwap, and many more. Unfortunately, not all projects have good intentions. There have been several so-called “rug-pulls” where the contract creators took all of the invested tokens from users or could mint new coins and sell those, ultimately draining the liquidity. This has been an issue as more projects began to flood the De-Fi space during the market’s top in August. On top of this, many De-Fi tokens are very volatile and contain high-risk associated with it. For this exact reason, it is always good to do your research before spending your money on new projects.

 

The Future of the BSC and De-Fi

The BSC has just launched and is taking on the new frontier of cryptocurrencies, the De-Fi landscape. Both look very promising, and growth is inevitable. For De-Fi new projects keep popping up, and the question is which ones will be here to stay and dominate the market place. I think the projects that keep building and stay “hungry” will be able to achieve exactly this.

 

Closing Thoughts

The BSC is set to have continued growth has more and more Ethereum users will find their way onto it. It is almost like being used to driving a 10-year-old Volkswagen and then driving a new Mercedes Benz; you don’t want to go back. I’ll leave everybody with this, I am super optimistic about the future innovations that will take place on the BSC, and there is only room for sentiment growth.

 

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Rich

Richard is a multilingual writer, located in the Netherlands, husband and father, cryptocurrency and tech enthousiast enjoys long walks and bicycle rides. Fervent Binance Smart Chain projects promotor.

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