Cryptocurrency exchange Binance is launching a new smart contract blockchain. As shown in the newly released Binance white paper, blockchain will be Ethereum-compatible.
According to the statement, the cryptocurrency created a new Binance Smart Chain (BSC) in order to maintain the high performance of its current Binance Chain. The company uses the native blockchain to host its decentralized cryptocurrency exchange, which is the world’s largest by trading volume.
The cryptocurrency exchange said that the new Binance Smart Chain (BSC) would run in parallel to the original Binance Chain. This means it will be independent, despite the integration with the mainnet.
Binance claims that both blockchains will be connected through Binance Coin (BNB). The coin will as well operate as the native token of a new smart contract blockchain.
Compatibility with Ethereum
The new Binance Smart Chain allows building complex decentralized applications (dApps). Reportedly, it will be compatible with Ethereum and will have similar smart contract functionality. According to the Binance white paper:
The first practical and widely-used Smart Contract platform is Ethereum. To take advantage of the relatively mature applications and community, BSC chooses to be compatible with the existing Ethereum mainnet.
Since Binance removed its Binance Coin (BNB) from the Ethereum platform last year, the launch sparked the suspicions of the company’s plans to rival the Ethereum network.
According to the cryptocurrency research firm Messari, Binance Smart Chain with its strong financial support is a clear competitor to Ethereum. However, Messari admits that money can’t always override network effects and also predicts that in the nearest future BSC will be a more credible threat to other emerging Ethereum network rivals.
Reportedly, the new Binance Smart Chain will allow staking and add more functionality to Binance Coin (BNB). The users will be able to stake BNB on Binance Chain to vote and earn from transaction fees.
The Binance Coin (BNB) is a utility token, with a total supply of more than 187 million units and $2.3 billion market capitalization, according to CoinMarketCap.
As BNB is not an inflationary token, there will be no mining rewards contrary to those, generated by Bitcoin and Ethereum networks.