Binance Smart Chain is a better ecosystem than ETH 1.0 but will not replace the upcoming upgrade, ETH 2.0, according to Binance CEO Changpeng Zhao.
It is currently more affordable to transact and efficient to develop on Binance Chain than on Ethereum, in almost all aspects.
“#BSC is not a #ETH replacement killer. I believe ETH 2.0 will be awesome when it comes out…Until then, BSC is more like #ETH 1.8. 100% backward compatible, faster and lower fees (97% lower.)”
BSC is EVM Compatible
Binance launched Binance Smart Chain (BSC) on August 31, 2020, as a parallel blockchain developer platform to Binance Chain. BSC was built to enable developers to create smart contracts and introduce the BNB staking mechanism.
BSC uses Proof-of-Stake (PoS) that enables individuals or organizations to become validators on the network. It is also fully compatible with the Ethereum Virtual Machine (EVM), which means BSC is one more smart contract blockchain that supports Ethereum protocol. Other supporting ecosystems include Cardano, Ethereum Classic, and TRON.
In the context of Ethereum, EVM ensures that on-chain smart contracts on the existing chain can still be operational in case of a hard fork or software upgrade.
While BSC is much more recent and yet to have massive developer support like Ethereum, Binance said that the compatibility will help to boost the utility of Binance Chain and BNB.
Binance CEO has also stated that the Binance community needs to build more since there’s much competition for BNB in the crypto market, unlike for Ethereum.
“Every coin could be a #bnb killer, so we (the bnb community) need to keep #building.”
On October 14, Binance granted developer funds to six DeFi projects out of more than 180 projects that applied for a grant to build smart contracts on Binance Smart Chain. Each of the DeFi projects, namely AnySwap, BakerySwap, Arkane Network, Bitquery, PancakeSwap, and Proxima, received 350,000.
Binance launched the $100 million Accelerator Fund in September to boost the development of quality infrastructure for the entire cryptocurrency industry.
BSC vs. ETH 2.0
Both blockchain system designs aim to facilitate scalability, low transaction fees, decentralized governance, and super-fast transaction speeds. BSC produces a block every 3 seconds, while ETH 2.0 will process 15 transactions per second.
BSC transaction fees can go as low as 1 cent, while Eth 2.0 transaction fees will be more scalable using layer 2 solutions like Optimistic Rollups (ORs). ETH 2.0 will be ready for launch in Q4 2020, as previously scheduled.