In 2020, the world witnessed drastic changes in the way money works. Decentralized finance (DeFi) exploded and became one of the most revolutionary and disruptive sectors in the financial technology industry. Ethereum, the world’s leading smart contract network, was the obvious center of all the DeFi innovation and experimentation.
However, plans of being the global DeFi infrastructure of choice were put on hold when Ethereum was hit with a series of scalability issues. This led to a surge in transaction fees and slow transaction times.
While Ethereum continues to refine its protocol and scalability solutions, the world began to look for new DeFi infrastructure from which to innovate. This is when a new kid on the block, the Binance Smart Chain (BSC), began to make a name for itself as a viable competitor to Ethereum for a nation-wide DeFi infrastructure.
What is Binance Smart Chain?
Introduced in 2020 as an alternative to Ethereum, Binance Smart Chain (BSC) is a decentralized platform that operates parallel to Binance’s existing blockchain and that encourages developers to build decentralized applications (DApps).
Binance Smart Chain (BSC) is designed to provide a faster, cheaper and more secure platform to create and deploy decentralized applications. It is capable of processing thousands of transactions per second while keeping most of the Ethereum-like features.
BSC is thus extremely well suited for DeFi projects and dApps, allowing users to transfer value, create programs and interact with smart contracts without relying on Ethereum or any other blockchain. BSC also allows for faster processing time, as well as cheaper transactions that occur almost instantly.
BSC as a Global DeFi Infrastructure
Since its launch in 2020, Binance Smart Chain has experienced significant growth as a go-to destination for global DeFi building and applications. From the world’s top fin-tech companies to decentralized apps and from blockchain startups to major crypto exchange’s, BSC is being used as the de facto option for their respective DeFi building initiatives.
Benefits of BSC for DeFi Applications
BSC presents several advantages for both developers and users over Ethereum as a global DeFi Infrastructure. These include:
• Low transaction fees: BSC allows users to deploy smart contracts and transact with assets at almost no costs.
• Fast execution: Transactions are much faster on BSC in comparison to Ethereum, as they can be executed within seconds.
• Ethereum compatibility: BSC is compatible with Ethereum Virtual Machine, making it easy to integrate existing projects with the platform.
• High through-puts: BSC offers much higher speeds than Ethereum, allowing hundreds of transactions to be processed per second.
• Security: BSC is secured by Binance’s world-class security measures, making it extremely secure for users and developers alike.
• Streamlined development: With BSC, developers can quickly and easily develop and deploy projects due to its user-friendly interface.
• Industry-leading compatibility: BSC is compatible with major blockchains such as Ethereum, BitCoin and other BEP-20 tokens, thus making it even more flexible for users.
BSC-Powered DeFi Applications
Since its launch, Binance Smart Chain has become the catalyst for the launch of a variety of decentralized financial applications. These are some of the major ones:
• PancakeSwap: The world’s largest decentralized exchange, PancakeSwap is an automated market maker (AMM) platform that allows users to trade a variety of coins and tokens and also yield farm.
• Venus Protocol: A deflationary yield farming protocol, Venus Protocol is designed to facilitate cross-chain interoperability between Binance Smart Chain and Ethereum.
• UniSwap: UniSwap is an automated liquidity protocol designed to offer low-cost access to the crypto market using Ethereum and BSC.
• Yearn Finance: Yearn Finance is a platform designed to provide users with automated yield farming services. It facilitates portfolio diversification, a decentralized credit system and aggregation services.
• 1inch Exchange: 1inch Exchange is a DEX aggregator for decentralized trading on BSC, Ethereum and many other protocols.
BSC is quickly becoming the go-to infrastructure for global DeFi building and applications. With its low transaction fees, speedy execution and industry-leading compatibility, BSC is proving to be an ideal replacement for Ethereum, allowing developers and users to easily create and deploy their projects. As more projects continue to launch on Binance Smart Chain and more users begin to explore their offerings, it is clear that BSC is here to stay, and become the world’s go-to option for decentralized financial applications.
