Review and Rating
Binance Smart Chain SVET System Review and Rating
SVET. System (Security-Velocity-Engineering-Transparency)
Binance Smart Chain (BSC) blockchain is the second blockchain solution of Binance, one of the biggest cryptocurrency exchanges. BSC adopts a proof of staked Authority which provides security to the blockchain [1]. To build a network to compete with Ethereum a faster, cheaper solution, the code of Ethereum was forked giving rise to BSC. As much as Security audits are performed on the network by Certik [2]and no recorded security breach, however, the security of the projects deployed on it are highly are being questioned. About several breaches in 2021[3] and $80million loss in January 2022[4] have been recorded on the network. Many of the breaches recorded on BSC are from when attackers spot and exploit vulnerabilities such as flash loan attack DDoS, re-entrancy in contracts code [5]. BSC is thus deemed less robust and vulnerable to manipulation. Some security concerns of BCS are outlined on the GitHub repository [6] which includes bugs running on the network giving nodes hard time synchronizing and ensuring system instability, unprofessional ethics and negligence of developers. Security B-
The consensus mechanism adopted by the BSC network solves it scalability issue thereby giving it a higher throughput when compared to blockchains running on a Proof of Work (POW) mechanism like Ethereum which is its main competitor. The BSC chain has 21 validating nodes which validate transactions l using proof of stake of Staked Authority. This eventually gives BSC a block time of 3 seconds [7], finality of 1second [8] and $0.15 transaction fees and throughput of 64.2 to 160 TPS depending on network usage [9]. This gives it an edge over Ethereum and eventually led to onboarding of new and existing projects from Ethereum to the BSC network. Velocity C
BSC is built to run in parallel to Binance chain it offers interoperability, smart contracts functionality, EVM compatibility and faster transaction speed and far cheaper transaction cost solving scalability. It is built on a proof of staked authority which is its consensus mechanism for its validating nodes. Above the consensus is the Ethereum virtual machine layer which allows BSC build smart contracts, run decentralized applications (DApps) native to the BSC network and support projects deployed on Ethereum. Since it runs in parallel to the Binance chain, for the two chains to communicate since they have the same token economy, the Oracle layer is created to initiate communication with the Binance chain oracle layer while another layer, the BSC receives sends information Binance chain regarding staking, governance, refund from the crosschain module of the Binance chain module through its smart contract layer [1]. Engineering B+
The Binance smart chain is a highly centralised network having 21 validators [1]. This is a small number for a blockchain company. This leads to the heavy criticism of its level of decentralization. It appears that the company chose scalability over decentralisation. Its proof of Authority makes that the identity of the validating nodes are public leading to conclusions that the validators of the network are handpicked by the Binance. Also being a validator requires a substantial amount of BNB this makes it hard not to presume that each Binance Chain validator is in some way connected or tied to Binance[10]. The BNB token appears to have a total number of 1,227,481 holders and 50% of the token supply is held 81 holders [11]. Transparency B
BINANCE SMART CHAIN SVET. System (Security-Velocity-Engineering-Transparency) Rating: B/C/A/C
References
1. https://github.com/binance-chain/whitepaper/blob/5ee18e3bf59595656006d9e959f813bdd6bc2980/WHITEPAPER.md#bc-to-bsc-architecture
2. https://www.certik.com/projects/binance
3. https://finance.yahoo.com/news/another-binance-smart-chain-project-102143651.html
4. https://decrypt.co/91447/binance-smart-chain-ethereum-crypto-bridge-hacked-80-millionhttps://finance.yahoo.com/news/another-binance-smart-chain-project-102143651.html
5. https://immunebytes.com/answers-to-the-top-faqs-on-binance-smart-chain-auditing/
6. https://github.com/binance-chain/bsc/issues/553
7. https://www.bscscan.com/chart/blocktime
8. https://academy.binance.com/en/glossary/finality
9. https://academy.aax.com/en/binance-smart-chain-vs-solana-comparing-the-key-differences/
10. https://uk.finance.yahoo.com/news/ethereum-binance-smart-chain-blockchain-defi-crypto-074504608.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAFbBI8NWv6P_WrgA1flUTC18NAAk6nXT6rXxW_y12jepNWsO058pYFj0_4ki4tsU0MIhTGacHZRNBBxV6OPA7hGrLxLoMzSj8wIJcaKrN6YFwc9P39ACrI1A8lWeBH5WwH5VpXV1wXKyPbJVu5ZgtxfbZrCRC2Z53pmOgIsSdMgD
11. https://www.certik.com/projects/binance