A year ago, the Binance Chain went live as the basis for the Binance Coin (BNB) and the decentralized crypto exchange DEX. Now it is to be technologically expanded in the direction of Smart Contracts and DApps.
If you think of Binance as the world’s leading crypto exchange, you are right. However, it is often forgotten that Binance also does development work on basic principles of the crypto industry. In April 2019, for example, Binance proudly presented its own block chain solution called Binance Chain. This made it possible to base the Binance Coin (BNB) on its own blockchain and to launch its own decentralized crypto exchange DEX. Now the Binance Chain is to be technologically further developed and thus become more attractive for users and programmers. The Binance Smart Chain project has been christened.
Background to the Binance Smart Chain
A white paper for the Binance Smart Chain (BSC) has already been published here. The BSC is basically designed as a sidechain to the existing Binance Chain (BC), whose data packages no longer offer sufficient space for additional functions. This problem will be solved by the BSC and will enable some new standards in the future:
- The BSC will enable complex Smart Contracts in the Binance ecosystem.
- For the Smart Contracts at Binance in the BSC, the Virtual Machine on Ethereum (ETH) can be accessed, a popular and proven tool among developers.
- The BSC is to become compatible with the block chain of Ethereum, which also opens up the possibility of trading BNBs decentrally against ETH and ERC-20 tokens.
- In this respect, Binance sees the BSC as a crucial point to strengthen the Binance DEX. DEX as the decentralized version of Binance sees itself as the market leader in its niche. We have explained why a DEX is not automatically a good idea despite an intrinsically impressive concept using the example of front running.
- Smart contracts and the Ethereum Virtual Machine (EVM) should make it easy for developers to adapt their DApps to the Binance ecosystem.
A schedule for the launch of the BSC has not yet been presented. Binance is calling on BC in the forum to participate in the development of the BSC and offers rewards for doing so.
Conclusion: Binance is thinking about future security
For you as an investor, working in Binance’s engine room has no practical consequences at first. However, in the medium term, Binance is strengthening its native ecosystem through the BSC, into which dapps and smart contracts are now also moving. This will once again put you one step ahead of the competition from crypto exchanges such as Coinbase or BitMEX. NBB as the native crypto currency for Binance customers has not directly benefited from the announcement of the BSC, but could be positively influenced by it at the latest when the first projects in the BSC really go live. This is because the NBB is potentially expanding its profile from a discount token in a direction where it would like to keep up with ETH, EOS or TRON (TRX).