If you have been in crypto long enough, you must have heard about the famous blockchain becoming as popular as Ethereum—BNB Chain. Today, BNB Chain hosts several decentralized crypto exchanges and DApps. Hence it is crucial to understand the mechanics of the BNB Chain.
The Technical Fundamentals of BNB Chain
The team also tweaked a few other parameters, like the block time and the gas limit per block. Some properties of the network had to be sacrificed since optimizing the network comes with some tradeoffs. These trade-offs align with the blockchain trilemma, which posits that security, decentralization, and scalability cannot be achieved simultaneously. Since BNB Chain improved speed and scalability, the blockchain became less secure and decentralized. BNB Chain resolves the trilemma to a great extent using a novel proof-of-staked authority consensus mechanism.
Transactions in proof-of-staked authority are validated by a set of nodes called validators which can be active or inactive. The number of active validators is limited to 21, with only active validators eligible to validate transactions. Active validators are determined by ranking them based on the amount of BNB they hold. The top 21 validators with the highest amount of BNB become active and validate blocks on the network in turn. Validators can also encourage BNB holders to delegate their BNB tokens with them and share in the reward for validated transactions. Since the network’s gas limit was optimized, leaving it with a limit of 30 million blocks. At the same time, Ethereum has just 12.5 million, and the amount of data on the BNB Chain increases ten times faster than the data on Ethereum. The speed of growth in transaction data makes consumer-grade hardware quickly inefficient at resolving transaction problems.
Development Possibilities on BNB Chain
CDeFi, a term coined by the CEO of Binance, is a term that combines the benefits of decentralized finance and centralized finance. BNB Chain is a good example of a solution that allows users to get a feel for using DeFi without paying high transaction fees. Users of BNB Chain can use decentralized exchanges, lending protocols, yield aggregators, liquidity aggregators, and tools like Metamask and block explorers. With BNB Chain, new developers can build and deploy their projects using the same tools on Ethereum. These developers can test their smart contracts at a fraction of the cost, which has led to a growth in adopting the BNB Chain. Users can switch their Metamask network to BNB Chain and use the various protocols and decentralized projects that have expanded from Ethereum to BNB Chain. BNB Chain leverages the popularity and power of Ethereum while serving as a cheaper alternative.
Benefits of BNB Chain
Ethereum and BNB chains have become the two major blockchains for deploying smart contracts. DeFi platforms now let people do many things they used to do with traditional financial instruments and institutions. Ethereum is the first to allow the creation of decentralized financial solutions, but the fee limitations on the blockchain left developers with no option but to keep looking elsewhere.
BNB Chain is more scalable and charges lower fees than Ethereum. Projects on Ethereum can also move to BNB Chain with little changes to their source code. The network used a proof-of-staked authority consensus mechanism which increased its security using the combined power of 21 validators using industry-grade hardware. All network users can also stake their tokens to share in the block rewards. BNB Chain also has a faster transaction time of 5 seconds.
Are There DEX Crypto Exchanges on BNB Chain?
Many crypto users often need an in-depth understanding and clarification on what DEXs are. A decentralized crypto exchange is a gateway to the crypto world for users interested in completely decentralized alternatives to failing centralized solutions. The most popular DEX crypto exchanges on BNB Chain work like those on Ethereum and enable the exchange of cryptocurrency assets. These exchanges also charge lower fees since their native blockchain is cheaper and the transaction time is faster. DeFi users are also borrowing, farming, lending, and saving in stable assets on these decentralized crypto exchanges on the BNB Chain. Examples of DEXs on the BNB chain are Pandora, Pancakeswap, Midex, Biswap, Nomiswap, DODO, Bakeryswap, and Titano Swych.
Why Decentralized Crypto Exchanges Like Pandora Are on BNB Chain
As a high-yield DEX crypto exchange and the first gamified rewards exchange platform, Pandora was built from scratch to be accessible by all while offering the maximum benefits of any decentralized exchange. Using BNB Chain improves the user experience while the same functionalities and benefits of Ethereum, the most popular DeFi network, can be implemented.
Since its launch, Pandora has built a range of products that users continue to benefit from for their usefulness and timeliness. Like other decentralized exchanges on Ethereum and BNB Chain, Pandora offers yield farming, stablecoin farming, and DroidBot staking, all yield rewards claimable by users who invested in the respective pools. Lately, the platform launched the first decentralized bonds backed by traditional institutions, the Pandora NFT Securities, which allow users to earn up to 12% APY in interest and up to 200% APR in staking rewards simultaneously.
Conclusion
BNB Chain is a fork of Ethereum’s GO client, GETH, optimized for faster transactions with the adoption of a new consensus algorithm, proof-of-stake-authority to resolve the contains that comes with an optimized decentralized network. Even though layer2 scaling solutions on the Ethereum blockchain are becoming increasingly popular, the future of BNB Chain remains promising as it offers comparable solutions to layer2s on Ethereum. Pandora is a decentralized exchange on the Binance Smart Chain that offers some of the best opportunities for DeFi users. From yield farming to consistent rewards for using the platform, and now Pandora NFT Securities, the commitment to serving users remains a core objective of the project.
These materials are for general information purposes only. They are not investment advice, a recommendation, or solicitation to buy, sell, or hold any digital asset or engage in any specific trading strategy. Some crypto products and markets are unregulated, and you may not be protected by government compensation and/or regulatory protection schemes. The unpredictable nature of the crypto asset markets can lead to loss of funds. Tax may be payable on any return and/or on any increase in the value of your crypto assets, and you should seek independent advice on your taxation position.
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