Binance launches $1 billion fund to develop BSC ecosystem
Binance launches $1 billion fund to develop BSC ecosystem
Exchange

Binance launches $1 billion fund to develop BSC ecosystem

By Vincenzo Cacioppoli - 13 Oct 2021

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The Binance exchange has announced a massive $1 billion investment to fund Binance Smart Chain (BSC). The blockchain, which was launched a year ago to develop decentralized dApps through smart contracts, is a kind of low-cost competitor to the more famous Ethereum blockchain.

Binance and the fund to finance BSC

This fund is expected to increase the potential of the blockchain and even more its adoption, which was initially financed by a $100 million fund.

This new 1 billion fund should be divided into four different areas: Talent Development, Liquidity Incentive Program, Builder Program, Investment & Incubation Program. The first two areas should be funded with about $100 million each, while $300 million would be allocated to the Builder programme and $500 million to the Investment programme.

The company’s tweet reads:

“It’s time to accelerate Binance Smart Chain’s journey towards scaling and mass adoption. We’re announcing the biggest growth fund in the history of crypto – the $1 billion fund to push the adoption of not only BSC but the whole blockchain industry”.

Binance has announced $1 billion investment to fund Binance Smart Chain

Binance Smart Chain challenges Ethereum

Binance Smart Chain was launched in September 2020 with an endowment of $100 million to support and develop decentralized dApps, just as Ethereum does, but at significantly lower costs.

Since its inception, the new blockchain has been an explosive success, supporting and developing more than 200 decentralized finance start-ups. There are around 1 million daily active users on the platform spread across around 900 dApps as of today.

One of the largest decentralized exchanges built on BSC is PancakeSwap, which is reported to have reached a total locked value (TVL) of around $9.8 billion according to data from DeFi Station.

This massive investment will make BSC the leading ecosystem for dApps and decentralized start-ups, making it:

the most inclusive and used blockchain infrastructure in the world, creating the new Internet of Value for everyone”.

Ethereum versus BSC

Binance Smart Chain was created as an alternative to Ethereum, to solve problems related to the speed of transactions and their high cost.

For this reason, the two blockchains have many points in common. dApps and tokens based on BSC are compatible with the Ethereum Virtual Machine (EVM). The public wallet addresses of BSC users are the same as those of Ethereum.

There are also several differences.

The first concerns the size of the two chains. On Ethereum there are about 2900 dApps, while on BSC there are just over 800. According to DappRadar, BSC became the dominant DeFi blockchain in the second quarter of 2021. In June, the average number of transactions on BSC was more than 4 million per day compared to around 1.7 million transactions on Ethereum.

Among the main reasons for this exponential growth are faster confirmation times and much lower fees. BSC’s growth is also due to the impressive growth of NFT-related projects and its compatibility with popular crypto wallets such as Trust Wallet and MetaMask.

One of the other differences between the two systems is the consensus mechanism, which is the classic PoW (Proof of Work) for Ethereum, while for BSC it is the new PoSA (Proof of Staked Authority) system.

The system is based on 21 validators who take turns to produce blocks and receive transaction fees in BNB as a reward. Every 24 hours the whole process is repeated with 21 more validators, elected after solving a node or staking at least 10,000 BNB. This system allows for much faster and cheaper transactions.

 

Vincenzo Cacioppoli

Vincenzo was born in Genova but lived most of his life in Milan. He has a degree in political science. He is a journalist, blogger, writer, and marketing and digital advertising expert. After a long experience in traditional marketing, he started working with the web and digital advertising in 2011, creating a company called Le enfants. Passionate about the web and innovation, in 2018 he started exploring the topics related to blockchain technology and cryptocurrencies. Independent cryptocurrency trader since March 2018, he now collaborates with companies in the sector as a content marketing specialist. In his blog. mediateccando.blogspot.com, he has long been primarily focused on blockchain, which he considers to be the greatest technological innovation after the Internet. His first book about blockchain and fintech is scheduled for release in November.

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