Binance, the world’s leading cryptocurrency exchange, published a new white paper for a solution called Binance Smart Chain. It’s a new blockchain that will run in parallel to Binance Chain and will also support smart contract functionalities.
Binance Announces Smart Chain Blockchain
In a recently published whitepaper, Binance announced the development of Binance Smart Chain – a new blockchain that will support smart contract functionality.
The new network is described as an innovative solution, bringing both the interoperability and programmability of the Ethereum Virtual Machine (EVM) to Binance Chain. It will run on a Proof-of-Stake consensus algorithm, intended to increase decentralization and community participation.
Moreover, the blockchain will be EVM-compatible, meaning that it will support all the existing tooling of Ethereum but with reportedly faster finality and cheaper transaction fees.
In essence, Binance Smart Chain will be a parallel blockchain off the current Binance Chain. This is intended to retain the high performance of the native DEX and to support smart contract functionality at the same time.
Commenting on the matter was the Binance Chain Development Community (BCDC).
“This dual-chain architecture will be ideal for users to take advantage of the fast trading on one side (Binance Chain) and build their decentralized apps with smart contracts on the other side (Binance Smart Chain). BNB holders who are interested in staking BNB can also support the development of Binance Smart Chain and earn rewards. In the long term, we hope to continue working closely with the blockchain community to strengthen our infrastructure for digital assets and provide the community with the best platforms for digital asset creation, circulation, and exchange.” – Commented BCDC in a press release shared with CryptoPotato.
Binance Flexibility A Serious Benefit
Undoubtedly, the major player in the field building a new blockchain network for smart contracts is a serious development.
Speaking on the matter was the popular cryptocurrency commentator and influential member of the community, Udi Wertheimer.
“Ethereum’s main weakness is its permissionless nature, which makes it inflexible and slow to change. Popular “dapps” on Ethereum are centralized anyway, so there’s not much to gain from having a permissionless infrastructure.
Binance, Tron, and others are taking advantage by taking Ethereum’s most popular component – the EVM – and putting it in a system that is flexible and can adapt to market changes quickly.
For “dapp” developers it is easy to migrate to these EVM-based networks, so we will find out soon if there’s value in them for developers.”
Facing Serious Competition
Regardless, Binance is entering a competitive field, seriously dominated by Ethereum for quite some time now.
According to a report for 2019, Ethereum, TRON, and EOS account for 98% of all the decentralized applications, with Ethereum being firmly in the lead in any possible category, including active dApps, active users, and transacted volume.
DApp Rankings By Platform. Source: Dapp Review ReportEven though it’s still relatively early to produce statistics for 2020, numbers from the State of the Dapps reveal that Ethereum continues to lead.
Apart from that, there are other serious projects, including Steem, NEO, Ontology, Waves, and so forth. Binance is entering a competitive field, and it will be challenging to claim a portion of the existing market.