Comparing Binance Smart Chain and Ethereum
Are They Not the Same?
Mars Panda is powered by Binance Smart Chain (BSC), which is a hard fork of the Go Ethereum (Geth) protocol. This makes BSC very similar to the Ethereum blockchain. However, BSC has a different consensus mechanism, and this makes transactions cheaper and faster.
Most in our community are familiar with using Metamask and interacting with Ethereum decentralised applications (dApps). But some of us may not have encountered BSC. As such, we thought that it might be a good idea to briefly go through the similarities and differences between the two blockchains.
dApps and tokens built on BSC are compatible with the Ethereum Virtual Machine (EVM). You probably have noticed by now that your public wallet addresses are the same on both blockchains. There are also cross-chain projects that operate on both networks.
If you have made any BEP-20 or ERC-20 deposits into your wallet, you might also have noticed that your Ethereum and BSC wallet addresses are identical. So, for example, if you choose the wrong network when withdrawing your tokens from an exchange, you can easily retrieve them from the other blockchain.
If you accidentally withdraw ERC-20 tokens to BSC, you can still find them in the corresponding BSC address. You can also go through the same process if you accidentally send tokens from BSC to Ethereum. In both these cases, your funds are fortunately not permanently lost.
In the realm of decentralised finance (DeFi), many dApps cross-over between BSC and Ethereum due to the two blockchains’ compatibility. The easy portability of applications from Ethereum to BSC allows new BSC projects to reuse open-source code from Ethereum. The most popular BSC dApp, PancakeSwap, was created as a hard fork of Uniswap.
Interestingly though, Autofarm and Pancake Bunny, which are among BSC’s top five dApps by user count, are yield farms — a category that is not as popular on Ethereum due to its high fees. Similarly, Biswap and Apeswap, both of which are also popular on BSC, are automated market makers (AMM), which is also a category that is less used on Ethereum due to its high fees. As fees are so cheap on BSC and transactions significantly quicker, yield farms and AMMs tend to be more efficient on BSC, and that explains their popularity with BSC users.
Ethereum, similar to Bitcoin, uses Proof of Work (PoW) consensus mechanism. The contention with PoW is that it is energy-intensive, and due to its highly decentralised nature, has slow transaction speed. BSC on the other hand uses Proof of Staked Authority (PoSA) that combines aspects of Proof of Authority (PoA) and Delegated Proof of Stake (DPoS). PoSA is more energy-efficient and speedy, at the expense of decentralisation. However, this difference between Ethereum and BSC will disappear with the introduction of Ethereum 2.0, which will use a Proof of Stake (PoS) consensus mechanism instead.
BSC and Ethereum both use a gas model for transaction fees that measures the complexity of a transaction. BSC users can set a gas price according to network demand, and miners will prioritise transactions with higher gas prices. Ethereum’s London hard fork creates a new pricing mechanism with a base fee per block. The base fee changes depending on the demand for transactions, removing the need for users to decide on the gas price themselves.
For a simple transfer of an ERC-20 token to another wallet, the average price at the time of writing is $2.46. This number increases to $7.58 when using a Uniswap liquidity pool that involves multiple transactions. An equivalent transaction on BSC has a fee of just $0.03. This translates to potentially a 250x difference in fees.
In Ethereum, the transaction time can range from 30 seconds to 16 minutes. These numbers take into account successful transactions but not the extra confirmation requirements.
For example, if you deposit ETH (ERC-20) into your Binance account, you will need to wait for 12 network confirmations. With a block mined roughly every 13 seconds, this would add an extra 156 seconds when depositing ETH into your spot wallet.
For BSC, the average block time is 3 seconds. When we compare this to Ethereum’s 13 seconds, we’re looking at a speed improvement of roughly 4.3 times.
dApp Community Size
Ethereum is the first smart contract blockchain and has been around much longer than BSC. It naturally has a larger dApp community. In fact, there are more than 2800 DApps on the Ethereum blockchain compared to roughly 810 on BSC.
Despite being a newer blockchain, BSC has a strong community and is growing rapidly. The reason behind BSC’s growth is mainly due to faster confirmation times and low fees. Coupled with improved compatibility with popular crypto wallets, such as Trust Wallet and MetaMask, BSC growth has been consistent despite the promise of more predictable gas fees from Ethereum’s London hard fork.
If we look at daily transactions, there’s an even larger difference between the two. BSC has a peak of around 12 million daily transactions, whereas Ethereum never exceeded 1.75 million daily transactions. BSC seems to be more popular for users who need to move their funds regularly due to its speed and lower cost. As of writing, BSC currently has a higher number of users who also transact more on average.
Mars Panda and BSC
The similarity between BSC and Ethereum has proved to be a boon and a bane. Mars Panda benefits from the low fees and fast transactions, but it can sometimes cause confusion in our community, which is more familiar with Ethereum, especially when choosing the right blockchain to transact in their wallets.
That said, using BSC is not rocket science, and with a little education, it is very easy for Ethereum users to migrate and start experimenting with BSC. We strongly believe that BSC’s performance, efficiency, and innovative use of PoSA consensus mechanism will benefit our Mars Panda community in the long run.
About Mars Panda
Mars Panda is a complete eco-system which consists of:
• Games, Social Media and Ecommerce Aggregation
• Yield farming DeFi
• Mars Panda game with NFT game elements
• NFT Marketplace
We aim to fuse mainstream eCommerce and Gaming to the crypto world of NFTs and DeFi, on one seamless, unified platform.
Find us at:
Legatus Global Pte Ltd is an entity that has obtained a regulatory exemption under the Payment Services Act (“PSA”) for digital payments token services. Legatus Global is commissioned to handle the issuance of Mars Panda Token (MPT) as well as the KYC/AML during the private sales and distribution of tokens to private investors. Legatus Global is also handling the process for private sales and distribution.