Binance announced the upcoming launch of its new Binance Smart Chain (BSC), a new blockchain that will allow developers to create their own smart contracts, just like the Ethereum blockchain. The popular crypto exchange introduced its Binance Chain (BC) last April and also the Binance Decentralized Exchange (DEX), which runs on the Binance’s namesake blockchain. However, the downside to utilizing the BC is that there is not much flexibility and functionality for developers to build decentralized applications (dApps) on the blockchain directly.
“Flexibility and usability are often in an inverse relationship with performance. The concentration on providing a convenient digital asset issuing and trading venue also brings limitations. Binance Chain’s most requested feature is the programmable extendibility. Digital asset issuers and owners struggle to add new decentralized features for their assets or introduce any sort of community governance and activities,” the whitepaper reads.
This is where the BSC comes into play – it combines the features of the DEX blockchain with the Smart Contract function to provide developers with added programmability and interoperability on the blockchain.
Binance could have built the frequently requested Smart Contract and Virtual Machine functions on the existing BC. However, doing so would not only slow down the efficiency of existing trading functions, but also “increase the learning requirements for all existing dApp communities”. As a result, the BSC was created in parallel to the BC to support the Smart Contract function in the simplest way possible for developers to utilize.
A community-driven initiative, the BSC provides on-chain governance based on a Proof of Staked Authority (PoSA) consensus with 21 validators producing blocks. These validators can be voted in or out based on its staking governance system. The Binance Coin (BNB) will be used to pay for the fees on the BSC and can be transferred between both the BC and BSC.
Before the testnet launch of the BSC goes live, Binance will proceed with further testing on all the functions on the BSC and also move an unspecified amount of BNB to the new blockchain under a “seed fund”.
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