From Ethereum to Binance Smart Chain

William M. Peaster on 24 Feb 2021

Ethereum is the unquestionable king of the hill when it comes to smart contracts right now. In every metric and every regard, Ethereum is totally dominating when it comes to attracting demand for decentralized apps, or dapps, at the moment.

Considering the Ethereum ecosystem’s extensive organic activity lately, this dominance is set to continue for the foreseeable future. Yet this major demand has led to an acute spike in ETH gas prices, i.e. the fee paid for Ethereum transactions, a reality that’s boxed out many people from partaking in the Ethereum network lately.

Enter Binance Smart Chain (BSC). It’s a modified Ethereum fork and is thus compatible with the Ethereum Virtual Machine (EVM), meaning it can easily port over Ethereum apps and users. And we’ve been seeing more of these migrations lately as some apps have been trying to win over users with cheaper transaction fees.

A non-trivial portion of this BSC activity has seemed spoofed recently, but there’s no question that Binance’s in-house smart contract platform has also been attracting unprecedented interest in this current crypto bull run amid the backdrop of acutely high ETH fees.

All this said, let’s dive into what BSC is and what it can do so we can get a realistic idea of how to accurately consider it within the cryptoeconomy’s present conditions.

What is Binance Smart Chain (BSC)

Binance Smart Chain is Binance’s smart contract platform for decentralized apps (dapps).

Specifically, the network uses a modified version of proof-of-stake (PoS) consensus known as a proof-of-staked-authority (PoSA) algorithm. Simply put, this means BSC is centered upon 21 validators who stake BNB in order to validate the BSC network.

As such, this may be a layer-one (L1) smart contract platform, but it’s also extremely centralized with 21 validators compared to the 1,000s of validators that Eth2 will have. This small set of validators, vetted by Binance, makes it easier for the crypto exchange giant to exert direct control over the network.

Another central aspect of BSC is that it’s compatible with Ethereum’s EVM, which lets BSC developers to easily migrate over popular Ethereum dapps and solutions via loosely-modified forks. This is why the vast majority of dapps on BSC today are essentially direct copies of Ethereum dapps, like how PancakeSwap was forked from Uniswap and Sushiswap.

What is the difference between Binance Chain and Binance Smart Chain?

In the spring of 2019, Binance launched Binance Chain, which is distinct from the newer BSC. Binance Chain, which still runs today as the home of Binance DEX, is rather inflexible structurally speaking and thus is not well suited to power a wide range of dapps. Here’s where BSC comes in.

BSC, which now lives side by side with the original and more simplistic Binance Chain, is more advanced with EVM compatibility and support for smart contracts. So whereas Binance Chain is the home for Binance DEX, BSC is home to PancakeSwap and other more advanced dapps that have been readily forked over from Ethereum smart contracts.

This “parallel” blockchain dynamic has led to a situation where the Binance ecosystem has two central token standards (like Ethereum’s ERC-20), which are BEP-2 (the main fungible token standard of Binance Chain) and BEP-20 (the main fungible token standard of BSC). Accordingly, not only are BEP-2 and BEP-20 token addresses distinct from each other in format, they’re also both separate from, though inspired by, ERC-20s.

At the end of the day, you also must consider that Binance plays a central role in gatekeeping traffic to its blockchains, something that Ethereum as a headless and decentralized community simply cannot do except from its periphery via dapps frontends.

BSC Basics

So let’s say you’re ready to dive into the BSC ecosystem and give its projects a spin to see what all the recent fuss is about.

Where to start, then?

Like we’ve mentioned earlier, most of the BSC ecosystem’s infrastructure has been ported over from Ethereum projects. This makes it so that Ethereum users will find using BSC and its dapps generally familiar, albeit with different namings! Here, we’ll explore some of the more popular tools available today.

Etherscan Alternative on BSC

If you’ve been around Ethereum for a while, then you likely know that EtherScan is the gold standard as far as Ethereum block explorers and data dashboards go. It provides various excellent avenues to understanding Ethereum’s historical and ongoing activity, and if you’re not using it then you should be.

That said, BSC needs a reliable block explorer that can offer high-level insights in real-time, which is where the Etherscan fork BscScan comes in.

Source: bscscan.com

BscScan lets you explore on-chain happenings around BSC like EtherScan lets you explore on-chain happenings around Ethereum. Plug your desired address or transaction ID into the site’s search bar, and you’ll be surfing data in no time.

If you’re starting to experiment with BSC, then, BscScan is certainly a fundamental analytical tool you’ll want to have in your toolbox.

BSC Wallets

Whenever Ethereum veterans welcome newcomers into the blockchain space, they’ll recommend stalwart Ethereum browser wallets like MetaMask to these novices. But what are the MetaMasks of BSC?

Well if you want to keep things simple, MetaMask actually offers BEP-20 support. So if you’re wanting a very familiar wallet experience as a seasoned Ethereum user, MetaMask is naturally a solid option and you can read a good Binance Academy how-to onboarding guide here.

Beyond MetaMask, though, you’ve got two decent options currently:

Trust Wallet

Trust Wallet is a mobile wallet with multi-chain support, meaning it supports Ethereum assets like ERC-20 and Binance assets like BEP-2. In fact, Trust Wallet has proven to be one of the premier early avenues for converting BEP-2 assets to BSC’s BEP-20 tokens.

Source: trustwallet.com

Binance Chain Wallet

Created by the Binance Chain team, Binance Chain Wallet is a crypto wallet that offers support for ERC-20, BEP-2, and BEP-20 tokens. As such, it’s also proven to be a popular onboarding wallet for many Binance traders.

Source: binance.org

BSC Ecosystem

BSC’s compatibility with the EVM makes it so that the network can easily support dapps that have come to life on Ethereum. This has made it so many Ethereum dapps and websites have been forked lately and minimally changed to support BSC ecosystem efforts.

Love it or hate it, the strategy provides a plug-and-go system for BSC to lap up demand for crypto-native products.

Defipulse alternative on BSC

In Ethereum, DeFi Pulse has become something of a flagship DeFi data tracker and is known for popularizing the total value locked (TVL) metric, which is essentially DeFi’s version of assets under management (AUM) as understood in mainstream finance.

Going off that, the BSC arena is trying to breathe life into its own DeFi activities, so a natural starting point was creating a version of DeFi Pulse for BSC. The result? Defistation, which tracks data like BNB locked and volume around the BSC ecosystem.

Source: defistation.io

Uniswap alternative on BSC

If you’re reading this post, there’s a decent chance you came here because you heard of PancakeSwap. It’s the Uniswap-fork, automated market maker (AMM) that’s reportedly been bringing in lots of volume lately courtesy of eye-popping liquidity mining rewards.

Zooming in, then, you can superficially expect from PancakeSwap what you expect from Uniswap: the ability to trade in a variety of tokens. Yet PancakeSwap lacks what makes Uniswap magical: a truly decentralized and permissionless structure.

Source: pancakeswap.finance

Regardless, PancakeSwap’s lack of decentralization hasn’t stopped yield farmers from migrating over to cheaply farm BSC-centric tokens as of late. If you’re jumping into BSC projects, this is one you won’t want to miss accordingly.

yEarn alternative on BSC

yEarn is one of the most popular yield aggregator projects on Ethereum. The gist is that you deposit your tokens in and let the yEarn protocol automatically fetch you attractive yields on the money you’ve supplied to it.

As you can imagine, this model has become really popular because it makes fetching yields on Ethereum efficient and easy. So what’s the BSC ecosystem’s answer to yEarn? That’d be the autofarm project.

Again, we’re not really dealing with a whole lot of innovation here. The autofarm protocol is definitely a yEarn fork through and through. But what we’re interested in, and what others are interested in, is that it’s an early yield aggregator for BSC-centric token projects. So if you’re turning to BSC to yield farm, autofarm is definitely a starting point to consider.

Source: autofarm.network/

Zapper alternative on BSC

DeFi dashboards … what’s not to love? In the Ethereum community, dashboard projects like Zapper and Zerion make it easy for users to track all their various DeFi activities in one hub.

For BSC, then, there’s a Zapper fork worth noting called yieldwatch! This site is still really young so it focuses only on BSC yield farms for now. As time goes on, look for the project to open up and start tracking more kinds of BSC-related activities.

Source: yieldwatch.net

Moreover, variety is the spice of life so if you’re interested in checking out something beyond yieldwatch, be sure to check out farm.army. It’s not necessarily better or worse than yieldwatch, but you might prefer it’s aesthetic style more.

Source: farm.army

Bridge from Ethereum to BSC

To transfer assets to BSC, you will have to use the Binance Bridge. Bridge is obviously centralized and run by Binance.

Yet be forewarned, IP addresses from the following countries are barred from using the bridge: Albania, Bosnia and Herzegovina, Belarus, Congo (DRC), Côte d’Ivoire, Crimea, Cuba, Iraq, Iran, North Korea, Liberia, Macedonia, Myanmar, Serbia, Sudan, Syria, the United States of America, and Zimbabwe.

If these IP bans don’t apply to you, then you can follow these steps to migrate your assets over to BSC:

  • Make sure you have MetaMask or Binance Chain Wallet installed so you can interact with BSC-centric assets.
  • Navigate to the Binance Bridge page and connect your wallet.
  • You can now select the assets you want to migrate, like ETH or USDT. Once that’s done, select the network you want to transfer from (Ethereum) and the network you want to transfer to (BSC).
  • Select the amount of tokens you want to migrate and then confirm the transaction. You will have to pay a transaction fee to successfully complete this process.
  • If you want to verify that your transaction worked, take your transaction ID and plug it into BscScan, just like you would with an Ethereum transaction via EtherScan.

Here, you’ll want to keep in mind that once you’re on the Binance side of things, you’ll need to pay for transactions with BNB like how you pay for Ethereum transactions with Eth. The easiest place to acquire BNB is through Binance itself. You’ll also want to remember that BNB as a BEP-2 and BNB as a BEP-20 are two different things. Keep in mind which network you’re trying to deal with when trading for tokens accordingly.

Risks on BSC

Smart contract platforms are new in general. That means we’re still seeing in the here and now novel ways to attack dapps, as we’re watching blackhat hackers grapple in real-time with how best to take advantage of these unprecedented products.

In extension, then, BSC’s dapp ecosystem inherits the main vulnerabilities that we’ve seen around Ethereum DeFi to date, namely risks of impermanent loss (IL), smart contract flaws, oracle flaws, and so forth.

All this said, BSC hasn’t really seen any major hacks yet, most likely because most blackhats have their focus still on Ethereum where the big bucks (or gwei) is at. But that doesn’t mean these hacks aren’t coming.

In fact, it’s because BSC is so closely mirroring Ethereum that we can expect these kinds of DeFi attacks really any day now, particularly as BSC attracts more activity and value.

And none of this is even touching upon BSC’s centralization risk, which could lead to the chain censoring transactions that prove thorny for Binance proper.

Conclusion

We’ve seen wide ranging discussions in recent days regarding whether BSC is a net negative or net positive for the Ethereum ecosystem.

There are obviously an array of positions to take here, but what’s the fairest? That’s hard to say without the benefit of being able to see the future, but even still we can take a stab.

We think Ethereum is so far ahead of all its competition that there’s not really a serious discussion to be had as to whether Ethereum’s facing a real challenge from BSC now. Yet on the flip side, there’s also no question that Ethereum is facing a real UX squeeze right now from acutely high transaction fees. So where to from here?

A non-trivial portion of BSC activity seems inorganic right now while Ethereum’s activity is extensively organic, that much is clear. But none of the aforementioned realities means BSC should be ignored. In fact, the opposite is true: Ethereans should study BSC closely.

Why? Because BSC points to a future where the Ethereum Virtual Machine, or EVM, is the standard. And this is the factor that gives Ethereum a huge edge going forward. Because while the cryptoeconomy can make all the bridges it wants to different L2s, the reality now is that all these bridges are coming from one central hub at the moment: Ethereum.

So the EVM is increasingly becoming the standard in the cryptoeconomy, and this factor should increasingly improve Ethereum’s position as an internet of blockchains. Not Cosmos, not Polkadot, not BSC, but Ethereum. It’s the most credibly-neutral infrastructure to make this vision a reality.

At the end of the day, then, there’s plenty of room in the cryptoeconomy for BSC and other EVM-compatible chains. But let’s not lose sight of where the power flows in this EVM-dominant world, which is Ethereum!

About the author
William M. Peaster
William M. Peaster is a writer and curator of the DeFi Arts Intelligencer, a newsletter tracking Ethereum’s digital collectibles arena. He is not a financial advisor. The thoughts shared in this guest post are his opinions and reflect his personal experiences and personal optimism around Ethereum. He currently owns some cryptoart and ETH.

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