Binance has released a White Paper detailing a new blockchain smart contract that it says offers a high-performance base layer for decentralized apps (dapps).. Tbut it may also be a challenge for Ethereum.
The cryptocurrency exchange said Friday that the new Binance Smart Chain (BSC) will serve as a smart contract layer running parallel to the existing Binance Chain.
The new blockchain is claimed to come with a matching engine capable of executing trades quickly and a new consensus mechanism. Designed to combine fast confirmation times with strong on-chain governance.
Although Binance did not explicitly state that BSC would be a rival to Ethereum. That provides clues throughout the White Paper that the new smart contract layer may perform better on some key metrics.
Will BSC Compete with Ethereum?
Furthermore, in a statement to CoinDesk, a spokesperson said the BSC was designed to ensure dapps can scale while still running on a high-performance layer to ensure a “fast and seamless user experience.”
That might give it an edge over Ethereum. Where scalability limitations sometimes create bottlenecks leading to soaring transaction fees and extended confirmation times.
Binance, which only moved its Binance token coin from Ethereum in 2022, denied it was trying to compete with the original “World Computer”.
Instead, a Binance spokesperson said the two would actually complement each other in growing the blockchain ecosystem. “The industry needs more high-performance infrastructure, not just a single blockchain.“
Binance also wants to make BSC fully Ethereum compatible. As the white paper says, it will layer smart contracts. The new contracts direct access to an ecosystem filled with “relatively mature apps and communities.”
One of the main problems afflicting other smart contract protocols is that it is very difficult to convince existing dapps to move away from Ethereum. The process can be long and complex: the development team must familiarize themselves with the new protocol and codebase. In the end, there is no guarantee that existing users will follow them to new chain.
But by building a direct door to Ethereum. Binance could find a way to streamline the way so that projects can more easily switch protocols. As the exchange puts it in its white paper, being fully compatible means “most dApps [Ethereum], ecosystem components, and tools will work with the BSC and require zero or minimum changes.”
Also Read: Binance is Building an Ethereum-like Blockchain
Of course, there are other competitors to “Ethereum Killer,”. But Binance’s innovation may be less than the potential high performance capabilities of the platform and more than that it has minimized the risk of dapps migrating to new chain. [S:Coindesk]
Perhaps the BSC motto should be: “What have you got to lose?”