What to know about Binance Smart Chain (BSC)

Binance is one of best trading platforms in the world. Its own blockchain suitable for smart contracts is called the Binance Smart Chain (BSC). Above all, this blockchain should not be confused with its native token which Binance Coin (BNB). Today, the Binance Smart Chain appeals to users because of the speed of its transactions as well as the low transfer fees.

This blockchain is similar to that of Ethereum. However, it is faster and requires fewer fees to complete a transaction (more details on the difference between the two chains here).

His plans to decentralized finance (DeFi) have therefore quickly attracted many users. In order to better present to you what BSC is, we will start by explaining Blockchain to you.

What is Binance Chain?

Before getting to the heart of the matter, it should be noted that there is a difference between Binance Chain and Binance Smart Chain. La Binance Chain is the first Blockchain launched by Binance in April 2019, just two years after the creation of the entity itself. This Blockchain gives a significant market platform for crypto assets.

The transition from a trading platform with its own crypto coin makes Binance a very strong competitor against other major coins, such as Bitcoin and Ethereum. Since its inception, Ethereum's transaction volume has really taken a hit.

So what can you do with Binance Chain?

Binance Chain is a public blockchain developed by the Binance team, one of the largest cryptocurrency exchanges in the world. Here are some of the possible use cases for Binance Chain:

Cryptocurrency trading
Binance Chain is primarily used for trading cryptocurrencies. Blockchain supports high-speed, low-cost cryptocurrency trading, allowing users to transact quickly and efficiently.

dApp development
Binance Chain also supports the development of dApps (decentralized applications) on the blockchain. Developers can use the Solidity programming language to create decentralized applications that can run on the Binance blockchain.

Issuance of tokens
Binance Chain allows users to issue their own tokens on the blockchain. Users can create custom tokens to represent digital assets such as stocks, bonds, real estate and more.

Staking :
Users can also participate in staking on the Binance blockchain. Staking involves locking funds into a blockchain validator node to help secure the blockchain and earn rewards in return. It is possible to earn money on Binance thanks to Staking.

Community voting
Binance Chain also offers a community voting system for protocol improvement proposals. Binance token holders can vote for proposals that interest them, allowing the community to participate in the evolution of the blockchain.

What is Binance Smart Chain (BSC)?

Binance Smart Chain (BSC) is a Blockchain compatible with which offers users the same functions as smart contracts. BSC's story begins in April 2019, when Binance itself launched its own Blockchain: The Binance Chain as said above.

Its goal was to create an ultra-fast Blockchain capable of supporting a very large number of transactions at the same time in September 2020. To achieve the goals, the Binance team chose to reduce the number compatible applications and focus on its main application: the Binance DEX.

At the same time, DeFi (Ethereum) is already very popular and Binance realizes that it needs smart contracts like those of Ethereum which are necessary to closely follow the movements.

In this platform, the codes execute when the conditions that have been predefined in advance are met, thus setting up bases for loans, borrowings and other activities related to decentralized finance.

After that, instead of adding the features directly on the Binance Chain, which could significantly slow down the network, they decided to launch the BSC. It is absolutely a Blockchain that is able to compete with Ethereum today.

What is the difference between Binance Smart Chain and Ethourum?

In setting up an alternative for the economy to Ethereum, the most important factor is time. To save itself from the tedious work of developing smart contracts, Binance is setting up its own protocol for evidence of authority (PoA).

Basically, the BSC uses a specific algorithm based on the PoA which is the established proof of authority. In the knowledge of this very particular protocol, only 21 validators have the ability to validate transactions. Thereby, BSC is the most centralized platform.

More so, Binance has made such a way that its platform is compatible with that of Etheruem. So that it can run applications, and even smart contracts through the Ethereum model, and it does this job by charging a small fee for transaction fees.

Being a centralized network, the BSC represents an economical alternative for Ethereum. It allows everyone to make transactions faster than others. The token that governs the network is that of Binance, BNB Faucet.

To be able to pay transaction fees, users will need this. To give you an idea of ​​acquisition rates, a BNB token is currently worth less than US$400.

In short, the BSC by working with the original bi, gives a very fast and secure experience to the various users with in addition to all this convenience with smart contracts.

Should we choose Binance Smart Chain or not?

You can try asking the one you want who is in DeFi what is his choice between Ethereum and Binance Smart Chain: certainly, the answer he gives you will surprise you. Binance Smart Chain has in any case brought several advantages to Binance, which today is a centralized entity, the same is true for DeFi as a whole.

Above all, we must not forget that, the Binance Smart Chain is the origin of Pancake Swap, which is the main DEX of the network and also one of the best appreciated DEXs in the DeFi space.

If you are new to DeFi, BSC gives you a practical solution, as well as those looking for an option less expensive than Ethereum. This does not mean that those who have a real passion for cryptos should leave Blockchains. On the contrary, Bi is one of the most reliable ecosystems which only statistics have proven to be very useful.

Advantages and disadvantages of Binance Smart Chain

The best way to understand BSC is to master its pros and cons. Here are a few:

Benefits	Drawbacks
It has low costs compared to other platforms	It is a non-decentralized platform
A very high speed in the processing of transactions which saves you time	Transaction validators must first approve by Binance
It is very easy to make a token transfer from your account to Binance Bridge
Highly Accelerated Funds in the BSC

Can BSC replace Ethereum?

Today, the powerful leader Ethereum as well as its adversary the Binance Smart Chain, will not be able to compete in the eyes of all. Not just because the BSC is not an outsider platform. But also because it belongs to a really huge (colossal) exchange platform.

The brake that separates the precursor from its successor gives Ethereum the certainty of maintaining its place at the top, at least in the near future. Most developers as well as users still need Ethereum.

It remains one of the main and major reasons for justifying the high transaction fees at Ethereum. But, we must not forget that the lack of decentralization inherent in the BSC plays a very big role in this regard.

Nevertheless, the very rapid rise and progress of BSC is truly remarkable and cannot end. Due to the fact that Ethereum is under strong pressure linked to the present difficulties and that it is lacking points thanks to a network which is very vast, some users will only be able to remain loyal to the BSC.

To have an unshakeable leader status, Ethereum must solve its Stability problems. From this, BSC will now see itself as an alternative.

Binance Leveraged Tokens (BLVT)

Leveraged tokens give you the opportunity to increase your position in a chosen asset, without worrying about the risk of liquidation. This therefore makes it possible for you to benefit from the substantial gains that a leveraged product can offer you without even worrying about managing your position.

What are Binance Leveraged Tokens?

Binance leveraged tokens on the acronym (BLVT); are assets that we can trade on the Binance spot market. Each token represents a set of positions that opens on the perpetual futures market. So a BLVT is the tokenized version of leveraged future position.

Among the premises of the available BLVTs, we have BTCUP and BTCDOWN

• BTCUP him, generates maximum gains when the price of Bitcoin evolves in an increasing way.
• BTCDOWN in turn generates gains when the price is falling.

All of its leveraged earnings are between x1.5 and x3. Today, Binance Leveraged Tokens can only be traded on Binance and cannot be withdrawn from the platform. It should be noted that BLVTs are not on-chain.

How do Binance leveraged tokens work?

There are several leveraged tokens, but one of the main differences between them and BLVT is that BLVTs do not seek to maintain leverage at a constant level. But they aim for an interval which gives rise to a variable leverage effect for the BTCUP et BTCDOWN, the interval is between x1.5 and x3.

Which acts as a perpetual leverage target for the tokens. The objective here is to maximize profits when prices increase beware of BTCUP, and reduce the risks of liquidation when prices are falling thanks to BTCDOWN.

Do not try to lever because it is not constant and is not visible. It is not simply because we want to avoid front-running. In reality, if these tokens reached an equilibrium according to a defined interval, it would be easy for other traders to use this information to make a huge profit.

Due to the fact that the effect of lever is not constant, they only rebalance when market conditions require it. The fact that this leverage effect is hidden prevents other traders from taking advantage of the information.

BLVTs are tradable only on the Binance spot market. But, they can also be exchanged for a value to which it represents. In this case, you will be charged an exchange fee.

Why Should You Use Binance Leveraged Tokens?

The concept of volatility drag is the main source of confusion about tokens. Binance leverage.

Simply put, the detrimental effect of volatility in your investment is the dampening of volatility over time. If volatility and the time horizon are felt, the effects of this on the performance of your tokens will be visible.

In the event of a strong trend and an important moment, your leveraged tokens work as you wish. This is not the case in a sideway market. The solution to this problem is therefore the leverage effect put in place by the Binance structure.

BLVTs only have the possibility of rebalancing in periods where volatility is very high. Although this does not completely solve the problem, this solution can greatly reduce the effects of long-term drag volatility.

What are the fees for using Binance Leveraged Tokens (BLVT)

When you are trading BLVT, you will need to be aware of the fees you will be paying. First, you will actually have to pay trading fees. Since BLVTs trade on a spot market like BTC, ETH, and even BNB, trading fees are the same for all.

A leveraged token is not a tokenized version of its positions. To keep these positions open, you have to pay a management fee of 0.01% per day, which amounts annually to a rate of 3.5%.

But there are two ways to close your position when you have BLVTs. You can buy and sell the Tokens on the market, which is the easiest solution. On top of that, you can redeem these for the value they represent.

If you exchange them, their value will be paid out in USDT. You will therefore have to pay a fee for 1% redemption.

If you have the possibility, close your position on the spot market. And the swap mechanism will provide an alternative way to exit your positions for exceptional market conditions.

How to Trade Binance Leveraged Tokens?

To get hold of the BLVT, you just have to go to the Binance spot market like any other coins or tokens.

But, you will find them in one specific place: below the ETH tab of the advanced trader interface. This gives you the opportunity to differentiate between these tokens of assets that are little used to trade.

Frequently Asked Questions

Q: What is Binance Smart Chain (BSC)?

The Binance Smart Chain (BSC) is a blockchain parallel to the main Binance blockchain, called Binance Chain. It was developed to offer advanced features such as smart contracts and decentralized applications (dApps).

Q: What are the main features of Binance Smart Chain?

The Binance Smart Chain is distinguished by the following characteristics:

• Smart contracts: It supports smart contracts based on the Solidity programming language, which allows developers to create decentralized applications.
• EVM Compatibility: The BSC is compatible with the Ethereum Virtual Machine (EVM), which means that dApps developed for Ethereum can be easily ported to the BSC.
• Low transaction fees: Transaction fees on BSC are generally lower than on Ethereum, making it an attractive option for users and developers.
• High confirmation speed: BSC offers fast confirmation times, allowing users to enjoy a faster transaction experience.

Q: How do I access Binance Smart Chain?

To access the Binance Smart Chain, you must configure your crypto wallet to connect to the BSC. You can use compatible wallets such as MetaMask or Trust Wallet and configure the BSC network by adding the BSC node URL.

Q: What is the BNB token and what is its role on the Binance Smart Chain?

The BNB token is the native token of Binance Chain and Binance Smart Chain. On BSC, BNB is used to pay transaction fees, participate in staking, vote on protocol improvement proposals and much more.

Q: What are the use cases for Binance Smart Chain?

Binance Smart Chain offers various use cases, including:

• Development of decentralized applications (dApps)
• Issuance of personalized tokens
• Token trading
• Staking and participation in rewards
• Community vote for protocol improvement proposals

Q: Is Binance Smart Chain secure?

Binance Smart Chain implements advanced security measures to ensure the safety of users and funds. However, it is important to note that like any blockchain, there is always an inherent risk related to security. Users are recommended to take extra precautions to protect their digital assets.

These answers are based on information currently available and may be subject to updates as technology evolves.