Binance has launched a new blockchain that could compete with Ethereum in the world of smart contracts and decentralized finance (DeFi).
In a new blog post, the crypto exchange reveals that Binance Smart Chain (BSC), which runs parallel to Binance Chain, is now live.
BSC is an Ethereum Virtual Machine-compatible blockchain. It introduces the new proof of staked authority (PoSA) consensus mechanism for Binance’s native token BNB, which rewards validators for helping maintain the network.
“BSC creates an ecosystem where validators, token holders, developers, and users all benefit from a rewarding blockchain that offers high performance and ample space for further innovations.”
Messari researcher Wilson Withiam touts BSC as a direct challenger to Ethereum, which is the platform that most DeFi protocols currently operate on. Binance’s new blockchain has smart contract functionality, which allows users to run DeFi apps on the network. It’s designed to feature cheap transaction fees, high performance, and cross-chain mechanisms aimed at increasing DeFi interoperability.
Binance is launching the smart-contract enabled blockchain amid an exponential rise of interest and trading in decentralized finance.
According to DeFi Pulse, which tracks the decentralized finance market, the total value locked in DeFi contracts is now approaching $10 billion.