Note: This post has been written by a WazirX Warrior as a part of the “WazirX Warrior program.”
Why do I need to pay so much for sending my money? This is the first question that users have when they try to perform a transaction on Ethereum Blockchain. Users have spent hundreds of US Dollars in order to perform a transaction over Ethereum Blockchain. We need to consider that the solution for congestion and high gas fee on Ethereum Blockchain is still not found, and the work is in progress.
The Binance exchange launched the Binance Smart Chain in September 2020. It was fully programmable upon launch and arrived with full support for smart contracts. The Binance Chain preceded it, a Blockchain built using the Tendermint consensus model with instant finality,, but that supported just one application, the Binance DEX.
Just six months after its launch, the Binance Smart Chain (BSC) is the flavor of the month in the crypto space. The pitch of a cheap, fast,, and nearly identical version of the Ethereum DeFi experience has both developers and users excited. Ethereum protocols are beginning to deploy alternative versions of their DApps onto the BSC. Sushiswap, 1inch, Fantom, Polygon,, and Sakeswap have all created BSC equivalents of their protocols – generally citing the high gas fees as a motivating factor. User numbers have shot from 35 unique addresses at the end of its first day of operations to over 62 million active users by April 4th. Transactions per day on the network have grown from 122 on day one to 3.42 million on April 4th.
Is BSC a duplicate copy of Ethereum Blockchain? If so why do we see a low gas fee on BSC?
At its core, the Binance Smart Chain is an Ethereum copy that is much faster and cheaper than the original – and it’s onboarding millions of users at an eye-watering pace.
That being said, the Binance Smart Chain is not an exact replica of the Ethereum Blockchain. For example, the BSC uses an alternative to Ethereum’s Proof-of-Work consensus model called the Proof-of-Staked-Authority (PoSA) model. This PoSA model optimizes the network for low fees and high throughput.
The PoSA model allows the Binance Smart Chain to arbitrarily change the network’s block times and gas limits without worrying about congestion or fee hikes. The Binance Smart Chain’s block time is three seconds compared to 13 seconds on the Ethereum Blockchain. This means that the BSC has faster throughput and transaction times but has much higher data storage requirements.
|Gas Fee (USD)||22,00,000||13,000||0.60%|
|Per Tx Cost||2.158||0.061||2.80%|
Above is an illustration of how cheap the Binance Smart Chain is compared to Ethereum Blockchain, Binance Founder CZ did a tweet about this. As per the numbers above:
- BSC handled roughly 21% of transactions compared to Ethereum Blockchain
- BSC charged 0.6% of the fees.
- With 0.6% charges, BSC becomes 35 times cheaper against Ethereum Blockchain
BEP2, BEP20, ERC20, OMNI & TRC20 networks – What’s the difference?
- BEP2 – Token on Binance chain starts with BNB
- ERC20 – Token on Ethereum chain starts with 0x
- OMNI – Token on Omni layer network starts with 1J
- TRC20 is a token standard on the TRON network, and their address starts with TW
We can definitely imagine a world without Ethereum, which was not possible before BSC was launched.