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Why can EVM compatible chains such as BSC rise so fast?

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What are the similarities and differences between the technical implementations of BSC, HECO and Ethereum chains?

Original title: "BSC to Ethereum, Kusama to Polkadot?

Original source: iOSG Ventures

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Last September, Binance Smart Chain (BSC) went live, ushering in a new era of exchange blockchain and quickly attracting a large number of projects. Within just one or two months, AMM, Lending, Stablecoin, NFT and other tracks have basically taken shape. Last December, Huobi's HECO chain set off the second wave of the boom in exchange chains. Following this, the OKEx chain is about to launch EVM modules to support smart contract development, following the launch of transfer, trading, and mining capabilities.

Exchange chain is a hot spot in the industry at present, and will continue for a long time. BSC is a leader in the exchange chain. Since its launch, BSC has quickly attracted a large number of users, decentralized projects, and significant growth of data on all kinds of chains. The total trading volume reached 1.2 billion US dollars just one month after its launch. The goal of BSC is to make the interconnection and transfer of assets between different blockchains easier and faster, and will support dApps and more application cases in the future. We are also looking forward to the implementation of Ethereum 2-layer capacity expansion technology and "PK" as soon as possible to work together to create a better user experience. This year, the BSC aims to build cross-chain financial infrastructure, unlock the Internet of Value, and build solutions that support more interconnections between blockchains. The BSC bridging service enables different DAPPs to interact with each other and transfer assets. Now the BSC is spending more energy on the research of dApp segmentation areas, such asAlgorithms, converged solutions, cross-chain and multi-chain, gamification, community and social tokens, synthetic assets, institutional DeFi, infrastructure and tools, and more.This also provides a huge scope for more and more projects to choose to migrate to the BSC.

As more and more projects choose to migrate to the BSC,In our view, the relationship between BSC and Ethereum can be likened to Kusama and Polkadot.Start-up projects can be tested at low cost in a real production environment with a large number of users. So far, the Tier 2 camp is not as strong as the exchange chain, and instead of migrating to Tier 2, projects and users are now migrating to BSC, etc. (all benefiting from Ethereum congestion).Up-and-comers have undertaken a large amount of Ethereum traffic spillover and have become a public chain ecology to be reckoned with. In our view, BSC itself will be more decentralized in the future, encouraging communities to run nodes and encouraging BNBNB holders to pledge revenue to nodes.In the long term, BSC will be an important part of the future multi-chain ecology.

For more BSC projects, please refer to:https://bscproject.org/#/projects

The exchange chain's response to the rapid growth of Ethereum's Defi ecosystem has been mixed reviews. IOSG thinks,Exchange-led chains, such as BSC, will remain highly popular in the short term.The main reasons include:

Large user base.Exchange has a much larger user base than Ethereum. In fact, many of the users of BSC (which also includes other exchange chains such as HECO) have never even touched Ethereum before, never installed a Metamask wallet, let alone participated in Defi. Exchange chain with a strong customer service force, even the founder personally, coupled with high subsidies and support efforts, quickly established a large user group.Low transaction fees, fast confirmation and substantial wealth effect,It also leads to good user engagement.

Capital precipitation is much.Exchange chains have a big advantage over Ethereum and other public chains in terms of the type and number of assets. The exchange builds a low-cost cross-chain approach, which leads to a very smooth user experience, and also gives older players who hold the previous generation of "major coins" (XRP, EOS, BCH, etc.) the opportunity to participate in DEFI. BSC was brought up when it came online"Ten thousand chains to one""And in a sense it is true.

Technology iteration is fast.Currently, both the BSC and HECO nodes are directly based on Ethereum code with some modifications. This reduces the difficulty of the underlying development and maintenance in the short term, and reduces the risk. However, we have also seen a number of technical highlights in the BSC. For example, it comes with a very useful native cross-chain function when it goes online, which realizes the function similar to IBC between the smart chain and the original COSMOS SDK-based coin security chain, and is commendable in terms of architecture. whileThe technological competition between the exchange chains is a bit of a "Cold War between the US and the Soviet Union", and the exchanges are certainly more efficient than the decentralized development approach of the Ethereum Foundation.

Exchange chain vs. Ethereum

The advantages of the exchange chain are obvious, but it is still not perfect and there are many problems. We think the main ones include:

High degree of centralization.Strictly speaking, the current exchange chain can not be called a public chain, can only calculate the alliance chain or even private chain. The number of BSC block producing nodes is 21, which is a small number. Although the community operation nodes are opened, the participation level is low due to the high mortgage threshold for BNB. So,The exchange chain has inevitably been criticised for being centralised by the "fundamentalist" Ethereum community.As Ethereum Layer 2 expands, users' demands and "tastes" for decentralization will rise, and both companies will have plans to gradually increase the degree of decentralization.

Node burden is heavy.BSC is currently directly following the code of EVM, and by adopting the POA consensus, increasing the block size and shortening the block production time, it can reach the capacity of Ethereum by a factor of ten. However, such a simple and crude way to expand capacity, when confronted with rapid user growth, will cause a more serious "state explosion" problem than Ethereum. Similar to the super node of EOS, the node of the exchange chain has relatively high requirements on the equipment and operation and maintenance of the operator, which will become higher and higher with the growth of time. State explosion will bring a bottleneck to the degree of decentralization and performance ceiling of the exchange chain, which we believe is an urgent problem to be solved.