Binance is entering the decentralized finance (DeFi) game following an integration of its Binance Smart Contract (BSC) platform with data provider Chainlink, according to a blog post shared with CoinDesk. The collaboration was announced Thursday.
The integration highlights Binance’s intention to create an alternate platform for Ethereum dapps, particularly aimed at the currently popular DeFi market. Chainlink provides data from on-and-off chain sources called oracles for decentralized applications (dapps). The network has integrated with numerous DeFi projects such as bZx over the first half of 2020.
As reported by CoinDesk, Binance released its smart contract platform’s white paper in April (it is currently gearing up for a mainnet release). The exchange said the platform was not meant to compete with Ethereum, the largest dapp blockchain by market capitalization at some $25 billion, but perhaps complement it. For example, BSC projects are interoperable with the Ethereum Virtual Machine (EVM).
Yet, Binance did list numerous metrics such as transaction speed, latency and scalability under its hybrid Delegated Proof-of-Stake (DPoS) and Proof-of-Authority (PoA) consensus algorithm that would beat out Ethereum in the paper.
Binance did not return questions for comment by press time.
Cutting into the DeFi market
An integration with Chainlink and a new tool set to dig into the DeFi marketplace speaks more readily to Binance’s intentions, too.
“The programmatic functionality of Binance Smart Chain enables developers to build DeFi applications in lending/borrowing and derivatives. These DeFi applications can source market prices, tap into liquidity, or make settlements based on data from Binance DEX,” Binance said in the blog.
These new features combined with BSC’s existing metrics and characteristics make its compatibility with Ethereum an even more navigable two-way street: Dapps on BSC will work on Ethereum, but Dapps on Ethereum will likewise be able to migrate more easily to BSC.
“Chainlink takes a blockchain agnostic approach that allows the highest quality data providers to make its way onto advanced smart contract development platforms like Binance Smart Chain,” Chainlink co-founder Sergey Nazarov said in a private message.
Ethereum has a hefty head start though. The protocol saw its first notable DeFi project, MakerDAO, go live in 2015. Five years later, DeFi has become the “it” project everyone wants (but few understand) with some $3.25 billion assets locked on various smart contract–based products, according to DeFi Pulse.
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