The Binance cryptocurrency exchange ecosystem has broken into the decentralized application building market. They created a special parallel blockchain, Binance Smart Chain, to land smart contracts.
Smart contracts welcome on Binance Smart Chain
It was announced today that Binance started the native Binance Smart Chain, which is a 'parallel chain' to Binance Chain. Thus, it will be cross-chain interoperable by design. It will use a Proof-of-Stake Authority consensus, so Binance Coin (BNB) staking will be available.
Introducing @Binance Smart Chain: A Parallel #Binance Chain to Enable Smart Contracts
Binance Smart Chain is an innovative solution to bring programmability and interoperability to Binance Chain.
The white paper of Binance Smart Chain is now public: https://t.co/09msWPZzsJ pic.twitter.com/V8U1aJn7FJ— Binance DEX (@Binance_DEX) April 17, 2020
The Binance Smart Chain will host smart contracts. It will interact with the existing Binance Chain via sophisticated software architecture. According to the project white paper released today, this separate chain is required because:
The execution of a Smart Contract may slow down the exchange function and add non-deterministic factors to trading
Binance Smart Chain is Ethereum-compatible. Why does it matter?
When making the decision to launch BSC, Binance was aware of the situation on the dApps market. It looks like Ethereum (ETH), Tron (TRX) and EOS (EOS) platforms have managed to address the needs of dApp builders. As no next-gen platform like Matic (MATIC) or IOST (IOST) can compete with the Big Three, no prominent competitor has arisen.
That said, it's very crucial that Binance decided to make its chain EVM-compatible instead of using a Tendermint-based virtual machine. They highlighted in the WP that all Ethereum-based dApps:
will work with Binance Smart Chain and require zero or minimum changes
To sum up, this release poses one more threat to the Ethereum (ETH) domination in the dApps hosting room.