Binance is set to enable a system that can support smart contracts on a parallel blockchain – the Binance Smart Chain.
Binance recently published its whitepaper for the Binance Smart Chain. It will run in parallel with the existing Binance Chain, offering fast, reliable, and scalable functionality for smart contracts.
Binance considers limitations, enhances existing blockchain
Binance recognizes the significance of its decentralized exchange platform, it but considers the limitations of its existing blockchain in providing “enough freedom and flexibility” to decentralized app (dAapps) developers.
The Binance Chain Development Community (BCDC) collectively pushed for the Binance Smart Chain.
According to them, it will keep all the features of the Binance Chain while enabling an infrastructure capable of supporting the creation of smart contracts.
“This innovative solution brings the interoperability and programmability of the Ethereum Virtual Machine (EVM) to Binance Chain,” according to the post.
Binance’s smart contracts: main features
Here are some of the main features of the Binance Smart Chain detailed in its whitepaper:
- It is a sovereign blockchain. It is not governed by any central authority or financial intermediary, making it safe and secure for all members of the network.
- It is EVM-compatible. Other existing Ethereum tools can be used in the new chain.
- It is interoperable. It allows for cross-communication and scaling of dApps.
- It operates on a proof-of-stake (PoS) consensus model. The new chain will have 21 validators in charge of transaction confirmations. BNB will function both as the “gas” for smart contracts and tokens to stake in the system.
Binance Smart Chain will be accessible to every developer aiming to make use of smart contracts to build applications.
Potentially, this could give birth to more dApps capable of providing exchange services, tokenization, and trading systems.
According to the BSDC, the testnet of Binance Smart Chain will begin with some test nodes. Eventually, the Trust Wallet and other digital wallets available in the Binance Chain will also be deployed in the Binance Smart Chain.
As soon as all these functions are deemed to be fully-functional on the testnet, the mainnet of Binance Smart Chain will be rolled-out to the public.
BNB will also be the native cryptocurrency adopted by Binance Smart Chain. Its “seed fund” will come from the owners of BNB who will be selected and migrated to the new chain.
Because it works on a proof-of-stake consensus model, validators will be chosen from the top 21 “highest staked candidates.”
What is a smart contract?
Smart contracts are a set of computer protocols capable of performing fully-automated actions if certain standards specified in a contract are met.
They can perform without the need for any third party to facilitate or enforce the obligations stipulated in a particular contract.
Smart contracts were initially introduced in the Ethereum blockchain because of its processing capacity. Some of its use cases are in payment services, self-parking vehicles, and legal agreements, among others.