Binance releases whitepaper detailing a new Ethereum-compatible smart contract platform

Binance has released a whitepaper detailing a new “high-performance” blockchain that supports smart contracts and decentralized applications (dApps). The proposed network, dubbed Binance Smart Chain (BSC), will run parallel to the company’s existing Binance Chain.

This new smart contract layer will feature a hybrid mechanism for validating transactions, combining an EOS-like delegated Proof of Stake (DPoS) system with Proof of Authority (PoA), to maintain a high-level” of performance. A group of 21 nodes selected and governed by BNB holders will serve as the network’s validators. Binance also plans to make BSC fully compatible with Ethereum, which, according to the whitepaper, will give the new chain access to a more mature application ecosystem and developer community.

Why it matters:

• According to CoinDesk, Binance denied that the new chain intends to compete with Ethereum. But the language in the whitepaper says otherwise, consistently pointing out BSC’s perceived advantages over its counterpart. Make no mistake; BSC is a clear competitor to Ethereum and, like EOS, one with seemingly endless financial support. But money can't always override network effects, so in the short-to-medium-term, BSC is a more credible threat to other emerging ETH Killers.
• The move makes sense from a business strategy perspective. The new chain will add more functionality to Binance’s BNB token, as users can eventually stake BNB on Binance Chain to vote on BSC validators and collect a percentage of transaction fees. It’s important to note BSC will not feature an inflation reward for stakers like most other PoS chains, thereby keeping BNB’s deflationary emission schedule intact.

Let us know what you loved about the report, what may be missing, or share any other feedback by filling out this short form. All responses are subject to our Privacy Policy and Terms of Service.