How to use BSC (BNB Smart Chain)
binance
Binance Smart Chain is a blockchain built and supported by Binance, one of the world’s largest crypto companies. It’s also one of the most popular ecosystems of dApps out there, so if you’re serious about crypto, you need to know how to use BSC!
Detractors will point to BSC’s relative degree of centralization and the fact that it emerged practically as a copy of Ethereum, but neither of these factors takes much away from BSC’s strengths. It’s a cheap, fast, and relatively secure blockchain that just about anyone can use.
So, how can you get started exploring BSC? We’ll answer that question and a whole lot more in this article!
What is BNB Smart Chain?
Formerly known as Binance Smart Chain, BSC is one of two blockchains under the aegis of the Binance cryptocurrency exchange and its crypto ecosystem.The original Binance blockchain, referred to as the Binance Beacon Chain, is distinct from the Binance Smart Chain in many ways.
The most crucial difference between the two is that Binance Smart Chain, or simply BSC for short, is compatible with the Ethereum Virtual Machine and supports smart contracts.
That means developers can set up and run dApps on BSC or even port dApps directly from Ethereum. This is more common than you may think, given that dApps on Ethereum tend to suffer from expensive gas fees. Making small transactions on any blockchain is very prohibitive when gas costs tens or even hundreds of dollars,and that was the situation Ethereum users faced throughout much of 2021.
BNB Smart Chain, in direct contrast, is very cheap to use. Of course, anyone with a little blockchain know-how is well aware that everything is a trade-off—Ethereum’s gas fees are a result of adhering to the strictest of security and prioritizing decentralization.
BSC, on the other hand, jettisons decentralization in favor of scalability, meaning speed and low fees. It uses a consensus mechanism called Proof of Staked Authority (POSA), where validators have to stake native currency but also be approved by Binance.
In fact, many of BSC’s 21 validators are operated by Binance themselves. This allows the network to work fast, needing to waste little time on consensus, but it’s hardly the permissionless, decentralized utopia that blockchain idealists talk about. Still, it’s fast and cheap, and that serves the purpose for plenty of users.
What Can You Do with BSC?
While it certainly is a downside when analyzing BSC objectively, the blockchain’s centralized nature isn’t as big of a limiting factor as you might think. For one thing, the network has never pretended to be anything else and is completely transparent about how centralized it is.
The main purpose of BNB Smart Chain is to provide a performative environment for developers to build decentralized applications. Just how decentralized these applications can be on BSC notwithstanding, the chain does allow for dApps to be built cheaply and easily.
Ethereum dApps, tools, and even ecosystem components can also be ported across to BSC with almost no effort. BSC isn’t the only chain that features the EVM compatibility that allows for this, but it’s definitely one of the most popular.
BSC launched in 2020 and experienced a meteoric rise in usage since it offered a low-fee alternative to Ethereum. It has billions of dollars in total value locked (TVL) across its decentralized finance dApps, and its popularity has ensured that the BNB coin remains very much in the upper echelons of the crypto market.
The low fees offered by BSC make DeFi extremely attractive to users without institutional-grade funds to play with. DeFi on Ethereum, as lucrative as it has been for many users, tends to get prohibitive when gas fees spike to three figures—and it’s really only hedge funds who regard these sorts of fees as insignificant.
So, if you aren’t a “hedgie” taking risks with other people’s money, DeFi on Ethereum may be tricky to navigate due to fees alone. BSC eliminates that problem and also makes it easy to engage in yield farming, where tokens can be staked to liquidity pools on decentralized exchanges for high yields.
How to Get Started with BSC
Whether you’re interested in BNB Smart Chain’s DeFi ecosystem, the NFT scene, or anything in between, you’ll need a few things to get started. What are they? Let’s take a look!
#1. BSC Wallet
To use any blockchain, especially those that support smart contracts and dApps, you need a wallet. Generally, a way to store crypto—a wallet, in this case—also provides a UI through which you can connect your blockchain address and the tokens in it to smart contracts and interact with them.
You may not be surprised to hear this, but the most popular wallet for BNB Smart Chain is MetaMask. It’s primarily an Ethereum wallet but is easily configured for other networks and is the go-to for practically every EVM-compatible blockchain out there.
To configure MetaMask to work with BNB Smart Chain, navigate to Settings, then Networks, and finally click Add Network. In the form that comes up, you can manually enter the following information in order to activate BSC:
- Network Name: Smart Chain
- New RPC URL: https://bsc-dataseed.binance.org/
- ChainID: 56
- Symbol: BNB
- Block Explorer URL: https://bscscan.com
However, all said and done, MetaMask isn’t the only option for BSC, even though it’s a very good one. Trust Wallet is part of the Binance ecosystem and works very well with BSC, and other wallets like Math Wallet, SafePal, Ledger, ONTO, and BitKeep all get the job done.
#2. BNB
Once your wallet’s up and running and you’ve secured your recovery seed, the next step is to fund it. This is important because performing many activities on a blockchain requires the payment of a gas fee.
Some blockchains do allow for core functions to be completed in a feeless fashion, such as ImmutableX. The majority do not, but one of the advantages of BNB Smart Chain is that its gas fees are far lower than those of competitors such as Ethereum.
So, it’s advisable to maintain at least a small balance of native network currency if you plan on using a blockchain a lot. Whether it’s minting NFTs or staking tokens, each operation will require a small amount of BNB to accomplish.
Luckily, BNB is a widely available coin, and you can even buy it outside of the Binance crypto exchange’s ecosystem. Once you trade for it, you simply have to send it to your wallet so that you can start using the blockchain.
There is one major pitfall to look out for when transferring coins and tokens to your BSC wallet. BNB Smart Chain uses a token standard called BEP-20, while the Binance Beacon Chain uses BEP-2. So, when transferring tokens to your wallet, use the BNB Smart Chain and the BEP-20 token standard, not the Binance Beacon Chain and BEP-2.
#3. Explore BNB Smart Chain
Armed with a BSC-compatible wallet funded with some BNB, you’re good to go! Now you can explore the wide world of BNB Smart Chain and check out some of its dApps and resources.
You may want to start with a website like BNB Smart Chain’s official DappBay or DappRadar to get an idea of what you can do on BSC. The Math dApp Store will also give you a few leads, but all that remains is to find the dApps you want to use and get stuck in!
Key Binance Smart Chain Resources
BNB Smart Chain is a permissionless ecosystem, meaning that you can visit and interact with any dApp that you want. That said, there are several resources and dApps that you may find indispensable throughout your BSC journey:
#1. BSCScan
A blockchain explorer is a must-have tool for using any blockchain because you can track the progress of your transactions with it.If you’re worried about why your transaction hasn't been completed yet, simply enter the transaction ID into BSCScan’s search bar to pull up all the details, including the transaction status.
Worried that you’ve been hacked? Pop your wallet’s public address into the search bar. That’ll give you a list of every single transaction ever made with that wallet, allowing you to verify each one if you so desire.
BSCScan is a great tool for all of this and more. It’s also useful to keep an eye on gas fees, and a quick glance every now and then will allow you to build up a sense of when the network is taxed and expensive to use and when gas is at its lowest.
The BSC blockchain explorer also allows you to track useful metrics such as daily transactions, the top BEP-20 tokens, and even the leading BNB Smart Chain validators.
#2. PancakeSwap
By far and away the top decentralized exchange (DEX) on the BNB Smart Chain, PancakeSwap is well known among users for being BSC’s answer to the likes of Ethereum’s Uniswap and Sushi.
Just like Uniswap on Ethereum, you can use PancakeSwap on BSC to swap between any BEP-20 tokens on the blockchain. As the network coin, BNB is the best bet for swaps, and it’s another reason to keep your BNB balance topped up.
As an automated market maker (AMM), PancakeSwap also allows you to play a part in the protocol itself by becoming a liquidity provider. To do this, you can deposit a pair of BEP-20 tokens (generally BNB plus one other token) of equal value into a liquidity pool.
People who swap between tokens do so against the pool, which your tokens are a part of. For providing this crucial service to the protocol, you’re rewarded with a share of the income that the pool makes via swap fees. This is a great way to earn a passive income, but you should also be aware of the risk posed by impermanent loss before diving in.
#3. Stargate Finance
Stargate is a relatively new project but has taken the BNB Smart Chain by storm, with millions of dollars in value locked to the protocol’s smart contracts. It is an interoperable liquidity protocol that lets you move assets between blockchains and different DeFi protocols without needing to rely on intermediaries.
This innovative DeFi dApp isn’t core to BSC, but it does add hugely to the usefulness of BSC, given the fact that it allows interoperability with other blockchains. On top of this, you can also become a liquidity provider with Stargate and even use the protocol for yield farming.
#4. Venus Protocol
Commonly thought of as a fork of Compound and Maker DAO, Venus Protocol integrates the functions of a money market protocol and a stablecoin minting protocol into a single, permissionless lending environment.
As with many DeFi dApps, Venus Protocol allows users with unutilized or idle coins to earn some returns. You can use BNB to earn interest or as collateral to borrow against, and you can also borrow and lend other BEP-20 tokens with algorithmic interest rates.
BNB Smart Chain vs. Ethereum
BNB Smart Chain and Ethereum share a lot of similarities, which comes as no surprise given that BSC originated as a fork of Ethereum. However, the two platforms differ in just as many ways, with BSC’s rise in popularity often attributed to its focus on areas where Ethereum suffers.
Security, scalability, and decentralization are the three axes of what is commonly referred to as the blockchain trilemma. In short, blockchain platforms generally have to compromise on one of these three factors in order to satisfy the other two.
Ethereum’s focus is on decentralization and security. The former is one of the basic ideologies behind cryptocurrency, and the latter is make-or-break—the result, therefore, is that Ethereum can’t score as highly on the scalability front.
For users, a lack of scalability means slow transactions and high fees. While many are willing to bear this burden in the interest of staying true to certain ideals, others are happy to adopt faster, cheaper alternatives.
Yield farming encapsulates this perfectly.While highly profitable when done right, yield farming is a strategy that also requires users to move their cryptocurrencies around a lot, on top of signing multiple transactions for staking and lending. BSC allows yield farmers to do this cheaply, but it’d be a painfully slow and expensive process on Ethereum.
Speed and low fees also bring other characteristics to BSC. The chain is known for a plethora of forks since its EVM compatibility allows developers to practically copy and paste Ethereum dApps across to BSC.
However, it’s also much easier to run a scam on BSC than on Ethereum. Since creating coins, minting NFTs, or even running a dApp is that much cheaper, scammers and rugpull artists are often happy to try their luck on BSC rather than risk the expense of Ethereum.
Benefits of using BNB Smart Chain
Here are some reasons you might consider using BNB Smart Chain:
- Speed. As mentioned previously, BNB Smart Chain is extremely fast, with an average block time of just three seconds. This makes BNB Smart Chain around four times faster than Ethereum, with the difference being exacerbated when considering the fact that various dApps require a certain number of network confirmations.
- Low fees. The second premier advantage offered by BSC is that its gas fees are extremely low. This makes the blockchain user-friendly, especially when it comes to situations where multiple transactions are required.
- EVM compatibility. Compatibility with the Ethereum Virtual Machine means that devs can deploy carbon copies of Ethereum dApps to BSC, allowing users the same functionality at lower cost and higher speeds.
- DeFi options. Since transaction fees are far lower on the BNB Smart Chain, you can do a lot more with DeFi. Yield farming is extremely popular on BSC for this reason, with the many transactions it requires being unfeasible on Ethereum but of no consequence on the BNB Smart Chain.
Drawbacks of using BNB Smart Chain
Despite the advantages offered by BSC, it isn’t perfect. Let’s look at the two main factors holding it back:
- Prevalence of scams. If you’re a scammer, BSC is the ideal place. As an honest user, you need to be on your guard because the low fees of BSC also make it an easy network to use for opportunists attempting to rid you of your funds via strategies like rugpulls. BSC has earned something of a reputation for being the go-to network for launching “shitcoins,” so you need to be on your guard.
- Centralization. While developers make few pretenses to the contrary, BSC’s centralization is a problem. The network is run by and depends on Binance, and it’s theoretically possible for the company to seize all assets from all of the blockchain’s users should they wish to. BSC has just 21 validators, and those that aren’t controlled by Binance are permissioned by the crypto giant.
Future of BNB Smart Chain
BNB Smart Chain is a fast, performative blockchain platform that’s seen incredible usage and adoption since its launch in 2020. It fits the niche left by Ethereum’s lack of inherent scalability very neatly, but all of that could change as Ethereum consolidates its post-Merge future.
Ethereum made the long-awaited switch to proof of stake consensus in September 2022, which, along with reducing the energy requirements of mining, was also aimed at improving scalability. This has already seen some success, and the days of three-figure Ethereum gas fees appear to be long gone.
That being said, Ethereum is propped up by a multitude of layer 2 scaling solutions that funnel traffic away. Even with this help, Ethereum gas costs a lot more than BSC gas.
For this reason, BSC may yet have a strong future ahead of it. If Ethereum continues to gain ground, attain mass adoption, and become the fundamental network that it appears destined to be, its gas fees may always leave a niche open for BSC to operate in.
Key Takeaways
The BNB Smart Chain is a blockchain forked from Ethereum and developed by the Binance cryptocurrency exchange. It’s Binance’s second blockchain, following the Binance Beacon Chain.
BSC was designed to be a high-performance, low-cost environment for developers to offer Ethereum-compatible dApps. If you can forgive the network’s lack of decentralization, given that it has only 21 validators, all either controlled or permissioned by Binance, it’s easy and familiar to use.
Just like with Ethereum, all you need to use BSC is a compatible wallet and some native currency. MetaMask tends to be the most popular wallet option for BSC users, and it can be configured for the BNB Smart Chain in mere moments.
Then, all you’ll need is the BNB cryptocurrency to power every transaction on the blockchain.
Using BSC FAQ
Can you use BSC with Trust Wallet?
Yes. In fact, Trust Wallet is one of the best wallets to use BNB Smart Chain with since it also falls under the Binance crypto umbrella.
How to use BSC testnet?
You can configure your wallet to use the BSC testnet just as you would the mainnet. The key details you’ll need to change from the mainnet settings in this article are the ChainID (97) and the New RPC URL (https://data-seed-prebsc-1-s1.binance.org:8545).
Is BNB smart chain legit?
Yes, BNB smart chain as a platform is totally legit, although you’ll need to exercise caution when using it. The low fees and generally high-risk appetite of the chain’s users make it somewhat infamous for scams, rugpulls, and shitcoins.
Can you do yield farming on BSC?
It’s not too controversial to suggest that yield farming’s home is none other than BSC. The high speeds and low fees on BSC make it a perfect network to engage in yield farming, although users will need to exercise caution—high yields generally involve a correspondingly high level of risk.