Coinlink and Blockchainability on Binance Smart Chain
Users in the crypto space might think there is not all that much to tell about the Binance Smart Chain, or short BSC. It’s perceived by most to be quite simply an Ethereum clone that is run by one of the largest companies in the crypto space, Binance.
However, there is more to that. When BSC started in 2019 users went in droves from Ethereum to BSC. Transaction costs on Ethereum were high, execution speeds low, and BSC promised to alleviate these problems drastically. The reason why this is so can simply be revealed when looking to how BSC operates.
It is estimated that a mere 21 nodes are the sole validators of the Binance Smart Chain, thus making it much more a centralized blockchain than Ethereum with it’s estimated still 3,000 nodes*. The 21 BSC validators are chosen by just 11 validators that themselves belong to the Binance Chain. The fact that this selection of BSC validators takes place on a daily basis doesn’t really prove that there is true decentralization in the form of randomness. In fact there are indicators that lead observers to believe that it’s basically Binance who governs the selection, not only of the nodes but also their operation. Clear patterns can be seen in what order new blocks are produced on the chain, which runs contrary to the logic that a proof-of-stake based chain would show nodes randomly generating new blocks.
BSC’s contribution to DeFi
And yet even though BSC’s degree of centralization seems in some places to defeat the purpose of DeFi, still it can be seen as a valuable contribution to the space. BSC offers smart contract capability that is essentially 100% compatible to the Ethereum Virtual Machine (EVM). This compatibility accounts for the fact that BSC is the host of many direct clones of dApps that had formerly been deployed on Ethereum, such as Pancakeswap being a clone of Uniswap and Sushiswap.
By outperforming Ethereum in speed and lower costs, BSC and the DeFi apps it hosts gave a large number of everyday users the opportunity to fully explore the benefits that the DeFi space has to offer them. Still, while waiting for Ethereum v2 to arrive, it would be prohibitively expensive to do, say, a $100 worth of trade on an Ethereum based Dex.
Looking at it that way, it becomes clear that the quick adoption of BSC by dApp developers and users alike was a factor that helped spark Ethereum’s efforts to come up with a newer version of their blockchain, Ethereum v2, which seeks to eliminate the obstacles that are currently barring small-amount traders from using DeFi. Hadn’t it been for the competition through BSC, probably a lot of users wouldn’t even have gotten into the space, so even if it sounds ironic, BSC will in the long term contribute to DeFi’s prominence in the everyday world—and has already done so.
How to move between the two worlds
To transfer assets between Ethereum and BSC users need to use the Binance Bridge which is operated by Binance. The process is fairly straightfoward and yet still a lot more cumbersome that one would expect from an easy-to-use app. You have to open up the Binance Bridge, connect your wallet, start the transfer, and when it’s done you wouldn’t be the first user to discover that unfortunately you overlooked to check the box which allows you to convert an additional tiny amount into BNB during the process, which is the currency you need to do your next transaction on BSC. If that indeed happened to you, you are not completely lost, but nevertheless find yourself in a situation where you need to get BNB through Binance directly only so you can use the funds you just transferred from Ethereum.
Are there simpler solutions?
Sure there are, one being in the future Coinlink that will have an Ethereum-BSC bridge integrated and lets users send their assets back and forth between the two chains. More than that Coinlink will allow users to use DeFi services on both chains starting from the other chain, then send assets to the target chain and stake them into a liquidity pool in just one go.
Considering Binance’s rank in terms of market capitalization one can expect BSC and the DeFi services it hosts to stay around for quite a long time, which is why Coinlink has decided to integrate BSC in the future.
Blockchainability — we’re getting there!
*At the beginning of September 2021 a problem occurred with Ethereum’s most widely used blockchain software, Geth. A bug in Geth caused a large number of nodes to spin off of Ethereum’s mainnet which effectively has created an unintended fork of the chain. To date it is still unclear why not all of these spun off nodes have recovered and returned to the mainnet. These issue needs to be resolved, and once it is Ethereum’s node count will most likely rebound to the number it used to be before the bug, which typically was around 8,000 nodes.