The two networks are beginning what could be a long road of competition to bring new adopters and innovators to their platforms.
The Value of DeFi
The explosion of Decentralized Finance (DeFi) in 2020 put serious strain on the Ethereum network, with gas fees soaring and transaction speeds slowing. The price alone of the network has priced out all but the very biggest crypto traders. Little has changed in 2021, with nothing to indicate that Ethereum is capable of solving its scaling issues in the short or even the medium term. For that reason a number of players in the market have sought to create a more cost effective DeFi blockchain that can cater to smaller and medium traders as well as whales.
The Major Players
While there have been many contenders to Ethereum’s crown, two players have made significant inroads in the market. The first is Binance Smart Chain, which was launched by Binance in September 2020, and now has a vibrant and growing ecosystem. The second is Polygon, a layer 2 solution for Ethereum developed by Matic. Here we take a closer look at the two to consider the benefits and advantages of both.
Advantages of Binance Smart Chain
In a relatively short space of time Binance Smart Chain has managed to secure an enviable position in the market, with considerable adoption and a burgeoning ecosystem of Decentralized Exchanges (DEXes), yield farms, staking options, and tools. In essence, BSC has protocol dApps of all shapes and sizes. The network has even eclipsed Ethereum in terms of both volume and users.
The consensus model for BSC is Proof of Staked Authority (PoSA), a hybrid between Proof of Stake (PoS) and Proof of Authority (PoA). Proof of Authority is known for its ability to prevent 51% attacks from occurring making it an incredibly safe way to secure a blockchain.
The typical cost of a transaction on Binance Smart Chain is a few cents. Compare this with a transaction on Ethereum which is typically in the dollar range and has even exceeded $100.
Transaction times on Binance Smart Chain are near instantaneous.
The native token of Binance Smart Chain is BNB. BNB is the native token of both Binance Chain and Binance Smart Chain, with the two chains running in parallel. BNB can be used to run smart contracts on BSC.
Advantages of Polygon
Polygon is the younger of the two networks. Developed from Matic – a layer 2 scaling solution for Ethereum – Polygon has gone on to rebrand as ‘Ethereum’s internet of blockchains’ scaling through multiple parallel chains similar to Polkadot or the scaling technology of Cosmos.
Consensus on the Polygon network is reached through validators in a Proof of Stake (PoS) mechanism.
While the cost of transacting on Binance Smart Chain is low, the cost on Polygon is lower still, just a fraction of a cent.
Transaction times on Polygon are also near instantaneous.
The native token of Polygon is the Matic token, a legacy from the fact that Polygon was born out of the Matic project.
As a layer 2 for Ethereum, Polygon supports the ERC20 and ERC721 token standards.
Both Binance Smart Chain and Polygon present significant advantages over Ethereum in terms of price and speed. While Binance Smart Chain has focused on creating its own thriving and diverse ecosystem, Polygon presents itself as an escape valve for Ethereum itself. Polygon currently remains a small part of the larger Ethereum network, should more projects move over to Polygon it could conceivably become as far-ranging as Ethereum itself. Polygon gives Binance Smart Chain plenty of reasons to look over its shoulder and create further separation, but as of now BSC has been able to attract more users. With no sign of Ethereum fixing its scaling issues on its own in the near future, users can expect both Binance Smart Chain and Polygon to thrive. There is perhaps no right answer as to which is the ‘best’ chain, but there are plenty of opportunities for each network to distinguish themselves.
Source : bsc.news
Founded in 2020, BSCNews is the leading media platform covering decentralized finance (DeFi) on the Binance Smart Chain (BSC). We cover a wide range of blockchain news revolving mainly around the DeFi sector of the crypto markets. BSCNews aims to inform, educate and share information with the global investment community through our website, social media, newsletters, podcasts, research, and live ask me anything (AMA). Our content reaches hundreds of thousands of global investors who are active in the BSC DeFi space.