Binance Smart Chain Report

11 Feb 2022 by Altal

BINANCE SMART CHAIN SVET. Report

Introduction
Binance smart chain is a smart contract programmable chain of the Binance network offering chains interoperability and Ethereum compatibility. It is the second blockchain of the Binance Exchange and runs parallel to the Binance chain. The smart chain was designed to provide ease of transaction when the Ethereum network was struggling with high transaction cost and slow time to finality. launched in September 2020, it adopted the already existing BNB token of the Binance chain as its native token. BSC brings with it expanded features to compete in the emerging DeFi market. This positioned the Binance network to becoming a major player in the crypto industry.

Design and Engineering
The Binance Smart Chain is a full fledge chain layer -1 chain capable of running without the Binance chain. It is designed to communicate with Binance chain and share resources native to them through the relay mechanisms. The BSC is built with having the Ethereum compatibility enabling to run smart contracts and deploy Decentralized Apps. Staking and governance is also available on the Binance Smart Chain network, a functionality previously not available on the Binance chain.

Security and Consensus Mechanism
The smart chain platform offers an energy efficient and scalable solution compared to its direct competitor, Ethereum. At the core of this is its proof of staked authority (PoSA) consensus mechanism. BSC has 21 validating nodes running with each one taking its turn in the validation process which gives a 64.2 to 160 transactions per second, average block time of 3 seconds and finality time of 1 seconds. [1]
However, its choice of PoSA may not be an excellent choice for an industry which places premium on decentralisation and security because the validating nodes’ identity are known and be easily manipulated. The BSC security appears to be regularly audited [2] but its platform has become a target for malicious attacks due to negligence on the part of project developers.

Use Cases
Binance Smart Chain provided an alternative platform for Decentralized apps smart contracts and choiced place due to its high energy efficient system and low gas fees compared to Ethereum. BSC supports the transfers of assets across multiple blockchains and assist developers build decentralized apps. Its native Token, BNB, has gained lots of utility and acceptability. It is used to
a. pay fees on Binance Ecosystem,
b. pay “gas” to deploy Smart Contracts on
c. reward block validators
d. lend liquidity to liquidity pools
e. yield farm
f. Getting loans.
The platform is exploring new solutions to corporations in tourism, finance and energy sectors. [3]

Market Performance of BSC
Not long after its launch, the price of the token shot to $44.9 in October recorded $1.2 billion in transactions within a month. BNB reached a high of $17billion volume on 19th February, pulled back to $3.13 billion on 23rd February 2021, then resumed an upward trend to reach its all-time high of $690.93 on 10 May but at a lower trading volume of $6.57 billion. The price dropped to $213.52 in May 2021 as the cryptocurrency markets sold off. Rallied again over the summer and dipped in September before the rally in early November bringing BNB price back up towards the $600 level. The markets dipped again in December 2021. currently BNB token ranks fourth in market cap but its value has fallen from its ATH to $432 shedding about 63% being capped at $71.37 billion [4] at the time of this writing.

User’s Engagement
Binance smart chain is quite an appealing platform which has seen quite a worldwide adoption with over 1.235 million token holders. The number of transactions has increased from 470,000 in 2020 to over 16million transactions per day in November 2021[5]. Its number of unique addresses have also been on the rise from 870,500 to 134.30 million in 2022.
The BNB token is heavily traded on the Binance Exchange, FTX, Gate.io and KuCoin. IT is available for trade in Several pairs: BNB/USD, BNB/BTC, BNB/USDT, BNB/ETHBNB/GBP, BNB/AUD, BNB/CNY, BNB/JPY and BNB/EUR. BNB can be stored on with several wallets including Binance Extension wallet, Ledger, Trezor Metamask, Safe Pal, Math wallet and Trust wallet [6] being its official wallet

Team
BSC was launched by Binance a cryptocurrency exchange founded by the renown CEO Changpeng Zhao (CZ) together with He Yi as cofounder and Chief marketing officer. They both bag lots of experience from their previous work engagements. CZ had worked with Bloomberg before founding Bijie Tech and later moved on to launch Binance. The Binance team has other executives and 2,607 global outstanding developers in 2019.

Regulatory Sanctions
The corporate existence of the Binance somewhat in question. It claims to be registered in the Cayman Islands but no valid details seem to exist. Binance has continually faced sanctions and restrictions from operations in several countries as it doesn’t meet their requirements to operate in theses territories. These countries in US, China, UK, Thailand. [7]

Tokenomics
BNB has a maximum supply of 200,000,000 with 165,116,761 BNB currently in circulation.
50% of its supply was allocated to public sale.
40% of the total supply (80,000,000 BNB) distributed to team and founding members
10% of the maximum supply was split among angel investors [8].
Binance has conducted 16 quarterly burning of its token. This continues 100,000,000 BNB are destroyed [9].

Conclusion
The Binance smart chain has built itself a name in the cryptocurrency space with lots of followers. Binance easy to use and diversified services makes it a go-to place for new users and other players looking for profitability, thereby increase its token use. Despite the rise of other competitive blockchain solutions offering a more scalable solutions, the smart chain and its token still appears to be a strong and stable. Other regulatory sanctions imposed on it seem not to have so much a negative effect on it. This could be a fundamental pointer to the astronomical demand and growth of the Binance smart chain.

References
1. https://github.com/binance-chain/whitepaper/blob/5ee18e3bf59595656006d9e959f813bdd6bc2980/WHITEPAPER.md#token-economy
2. https://www.certik.com/projects/binance#
3. https://www.binance.com/en/bnb#BNB-ECO-SYSTEM
4. https://coinmarketcap.com/currencies/bnb/
5. https://bscscan.com/chart/tx
6. https://docs.binance.org/smart-chain/wallet.html
7. https://en.wikipedia.org/wiki/Binance
8. https://whitepaper.io/document/10/binance-whitepaper
9. https://www.binance.com/en/bnb#