Binance Smart Chain (BSC) is a blockchain network built for running smart contract-based applications, allowing users to get the best of both worlds: the high transaction capacity of Binance Chain and the smart contract functionality of Binance Smart Chain.
To ensure a seamless cross-chain compatibility between Binance Chain and Binance Smart Chain, they share the same native token, BNB. This allows for the transfer of assets across the two chains.
Binance Smart Chain uses a consensus model called Proof of Staked Authority (PoSA), which combines elements of Proof of Stake (PoS) and Delegated Proof of Stake (DPoS). In this model, validators stake BNB to become validators. If they propose a valid block, they’ll receive transaction fees from the transactions included in it.
Furthermore, Binance Smart Chain is compatible with the Ethereum Virtual Machine (EVM). This means it supports all the existing Ethereum tooling along with DApps and protocols, making it easy for developers to port their projects over from Ethereum.
One of the main attractions of Binance Smart Chain is its low transaction costs and high performance. While Ethereum is currently capable of processing about 15 transactions per second, Binance Smart Chain can process much higher volumes, making it a popular choice for decentralized finance (DeFi) projects, among others.
However, it’s worth noting that Binance Smart Chain’s focus on speed and transaction capacity does come with a trade-off. The BSC network has fewer validators than many decentralized blockchains, which means it’s arguably less decentralized and could potentially be more susceptible to certain attacks or forms of manipulation.