Binance Smart Chain (BSC) is a product of the Binance exchange, which was launched back in September 2020 and was developed to enable smart contracts and compete with Ethereum and their increasing dominance in the Decentralised Finance (DeFi) sector.
Essentially, it is a copy of the Ethereum DeFi experience, but is much faster and cheaper, attracting millions of users at an incredible pace. It is however, not an exact replica as both chains run on different consensus models. Ethereum runs on the Proof-of-Work consensus model (PoS) while BSC has a Proof-of-Staked-Authority (PoSA) model. This model is said to enable lower fees optimising the whole network but is not completely decentralised.
Just a couple of months after its launch, BSC managed to gather 60 million active users and 2.53 million transactions/day, while $BNB the native cryptocurrency powering the BSC keeps breaking its previous ATH.
With the idea of a cheap, fast and almost identical version of Ethereum’s DeFi space, not only were users thrilled to migrate over from Ethereum, but also a large number of developers have created alternative versions of their Dapps running on BSC.
While Ethereum has gone through and overcame initial struggles, as well as some security incidents it is still the market leader in the DeFi sector closing in on $70 Billion in Total Value Locked (TVL).
Metamask, the Ethereum wallet service and browser extension recently reached a new milestone, recording 5 million active users marking the rapid growth of Dapp and DeFi usage in developing countries, as more people turn to Bitcoin and alt coins to avoid inflation. These users increasingly use Metamask to connect to Dapps in order to earn a supplemental income or make long-term investments, as most of them are unable to access their local banking system.
Ethereum’s blockchain is used by many established household names – these projects include Maker, Compound, Uniswap and Sushiswap to name a few.
DeFi is still a very hot trending topic in the crypto world with a combined TVL of $114 Billion and is a sector that is poised to offer users new and innovating products and feature developments.
Definitely something to keep track of!
With any kind of DeFi related project, it is HIGHLY ADVISABLE to do your own research as all projects carry some level of risk and losing your funds can be a high probability – this is in way or form financial advice
Have fun earning your interests