What is the Binance Smart Chain, and how does it connect with Metamask
Reading time: 6minutes
Binance is not just Binance, it is also Binance Smart Chain.
Why has it become so popular for its DeFi protocols? Above all thanks to the gas fees, the commissions, extremely low when compared to those of Ethereum. And also at the fastest transaction speed. They are two fundamental elements to attract all those traders or even interested ones who do not have princely figures and who therefore are very careful about their savings. If you see yourself in this range, you definitely want to know more.
Not subscribed to Binance? Do it with this referral linkto save 20% on commissions forever, you have an advantage and I have an advantage. Otherwise don't use it! It is also not a problem because, disclaimer time, I am not a financial advisor and everything I say is absolutely not aimed at giving advice for investing online in cryptocurrencies. I use this platform to memorize concepts that would otherwise get confused in my head. I could do it on a notepad, but I've always thought that sharing is caring. The only advice I would like to give you is: always be careful, if you want to trade in crypto, to be covered that you are investing an amount that you can afford to lose without affecting your life in the least.
The BSC (Binance Smart Chain) hosts many DeFI platforms that make high or low yields, which therefore have a higher or lower risk level respectively. Always pay attention to where you go to deposit your funds, there is full of scam (rip-offs) also on the Binance Smart Chain.
What is the Binance Smart Chain
The BSC is in fact an alternative to Ethereum: they are both blockchains that travel in sync: all applications built on ETH are potentially compatible with the BSC. If ETH has such high fees (commissions) it is caused by the fact that the network is congested, there are many validations performed every second around the world (ETH is a blockchain precisely decentralized) and to enter one of these nodes, the user must be willing to pay much more than the others. The BSC is centralized, there is a small number of nodes but much better performance. The BSC is obviously part of Binance, but it is not to be confused with the Binance Chain which is the part of the Exchange. Binance Smart Chain, on the other hand, allows the possibility of executing Smart Contracts and developing dApps (decentralized applications).
The transfer of funds to the BSC, whether from an external wallet or directly from the wallet on Binance is the very first thing to pay the utmost attention to. The Binance Chain has the BEP2 standard (Binance Chain Evolution Proposal 2) while the Binance Smart Chain has the BEP20 standard. Beware, they are two different things.
Now let's see how to configure Metamask to connect to the BSC and how to securely transfer funds to the BSC.
How to connect to the BSC with Metamask
Metamask is undoubtedly the most comfortable bridge with the DeFi world (I'm talking about it here): it is a browser extension (runs on a chrome-compatible browser) that allows you to interact with these applications. Eye in the download, there are fakes that run. You can download the official one by going to the company website, metamask.io.
Once installed, you can choose to create a new wallet or import a wallet that you have elsewhere: where each wallet is written within the blockchains, Metamask acts as a bridge and accesses that wallet, it is an intermediary. It is also possible to import a hardware wallet (a physical wallet to keep in your pocket - security is never too much. Remember: not your keys, not your crypto!) We will also delve into this topic.
Since Metamask was created to communicate with the Ethereum network, once the extension is activated that will be the network selected by default, it can be seen at the top near the fox.
However, you can see that it is also a drop-down menu: if I click on it, at the bottom I have the entry Custom RPC. This item allows you to enter parameters that will allow us to connect Metamask to the BSC.
Why do I have a balance with Ethereum and do I see it empty with the BSC? Because as mentioned before, they are two different blockchains! We are now ready to deposit funds into our BSC-linked Metamask wallet and use them on DeFi and its applications.
Deposit funds on the BSC
So how do you deposit funds on our new wallet on BSC? It is done directly from Binance. Entering your wallet at the top right, on the Main Account screen we find the Withdraw button. In the Withdrawal section we choose Cryptocurrency, we choose the crypto we want to transfer and on the right we can choose that we want to transfer them in coins on the Binance Smart Chain.
By selecting this option, the system asks us: are you sure you are moving them to a platform or app that supports them? Watch you lose them! But we have just set up Metamask, we are ready to do it.
Binance, which turns out to be a very serious company, even takes a small quiz to make sure you know what you are doing. I don't want to give the answers here, it is important to understand this before doing so. Read my guides carefully.
By setting the address of our wallet, which we retrieve from Metamask under Account 1, and the amount of crypto we want to transfer, we just need to confirm the transaction with our Authenticator and that's it. To show you this proof, I moved 0,1 BNB, about 20 €.
I wrote in a blockchain node that 0,1 BNBs have been moved to the BSC, at the address I told them. Copy the transaction address and check it on BscScan.com if you want to check these steps. The blockchain is by nature public and available to everyone.
Here, if I go back to my Metamask, I see the transferred figure converted to BNB. Sometimes it takes a few minutes, other times a few hours… I noticed a few differences. But they come.
There is also another method there BinanceBridge, which allows you to transfer crypto from a physical wallet directly on the BSC.
We can finally interact with the BSC and its DeFi applications.
Where are the DeFi applications located on the Binance Smart Chain?
defistation.io: Defistation is basically a DeFi project ranking and analytics website for decentralized finance projects that have been built and run on Binance Smart Chain. This project is developed and maintained by Cosmostation and funded by Binance. You can check the total locked value in DeFi projects on the Binance Smart Chain in real time. The metrics and charts displayed on Defistation allow you to get insights into the trends and growing movements in decentralized finance.
All DeFi projects listed on Defistation go through an initial screening process, followed by rigorous due diligence and a series of communications to confirm the validity of the information shown to us. Projects that have a “Verified” badge next to their name are projects that have confirmed that the list of contracts included in the TVL calculation is up-to-date and accurate.
Defistation collects the list of contracts and ABIs (the interface between the modules) of the contracts of each project to monitor their economic balance on the Binance Smart Chain. The total balance of each Smart Contract is then calculated by aggregating the total amount of BNB and BSC tokens each hour. The total locked value is displayed by taking this amount and multiplying it by the dollar (USD) value of each token.
As soon as you enter defistation.io you see this ranking of DeFi projects, and by default it is sorted by Locked, that is the amount of money (the amount of money that is used in the project itself).
This is the right place to choose the DeFi project that interests you most, click on the project you are interested in (eye that the first one with the word Ad is an advertisement - Advertisement), and start studying it.
With the button Open Dapp you will be catapulted into the project.
Some of these dApps would be worth analyzing… stay tuned.