Binance is launching a new Ethereum-compatible blockchain

Quick Take

  • Binance is set to launch a new Ethereum-compatible blockchain
  • The new blockchain will have BNB as a native token, thus supporting its staking 
  • The move appears to put Binance in direct competition with Ethereum 

Crypto exchange Binance is launching a new Ethereum-compatible blockchain, with BNB as a native token.

Dubbed “Binance Smart Chain” (BSC), the new blockchain would have smart contracts functionalities like Ethereum.

“The first practical and widely-used Smart Contract platform is Ethereum. To take advantage of the relatively mature applications and community, BSC chooses to be compatible with the existing Ethereum mainnet,” Binance said in a whitepaper published on Friday.

Binance already operates its native blockchain called Binance Chain (BC), which powers its decentralized exchange Binance DEX. But as it "doesn’t provide enough freedom and flexibility to the developers of decentralized apps (dApps)," Binance is launching another native blockchain. 

BSC would run in parallel to BC and be interoperable.  "The Binance DEX will remain a liquid exchange venue of assets on both chains. This dual-chain architecture will empower its users to build their decentralized apps and digital assets on one blockchain and take advantage of the fast trading to exchange on the other," said Binance. 

BNB staking 

Notably, Binance Smart Chain’s native token would be BNB, thus allowing holders of the token to participate in staking and earn rewards.

“BNB is the token used to stake for BSC,” said Binance, adding that its an “attractive opportunity for all BNB holders who are interested in staking BNB to support the development of Binance Smart Chain and earn rewards.”

"All the BSC validators in the current validator set will be rewarded with transaction gas fees in BNB. As BNB is not an inflationary token, there will be no mining rewards as what Bitcoin and Ethereum network generate, and the gas fee is the major reward for validators," said Binance. 

The crypto exchange further said that the BSC will support all of the existing Ethereum tooling along with faster and cheaper transactions.

The move appears to put Binance in direct competition with the second-largest public blockchain Ethereum

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Aug 11, 2021, 5:18PM UTC