An in-depth comparison between Binance Smart Chain and Fantom Opera mainnet (BSC & FTM)
++ Update from 20.04.2021: I updated the graphic below with the comparison, but not the whole article text. The changes in the graphic are a result from (1) a recent Fantom network upgrade, (2) changes in market caps due to market volatility +++
This article should give the reader an in-depth understanding of the technical fundamentals of both the Binance Smart Chain and the Fantom Opera mainnet. The article is structured as follows:
- Purpose of the comparison: Why the focal question is relevant today
- Snapshot: Binance Smart Chain
- Snapshot: Fantom Opera
- Comparison of both along pre-defined metrics
Sources are given whenever possible. If there are any errors, please report them in the comments. To increase readability, I will refer to both chains as “BSC” and “FTM”. Please be advised that this article was written on 13th March 2021 and does not include any changes subject to BSC and FTM that occur in the future (as it is not a time-traveling article).
Purpose of the comparison: Why the focal question is relevant today
In the last years, and pretty much from the beginning of the crypto craze, the Ethereum blockchain (ETH) has positioned itself as the go-to chain when it comes to smart contract. Trends from 2015 to today, incl. ICOs, decentralized finance and NFTs were able to strive due to the possibility to easily and quickly write smart contracts on ETH. Even today, complex protocols such of those of Uniswap, are “only” a juxtaposition of transactions which miraculously enable users to swap tokens or yield. However, Ethereum is struggling with congestion, and as a result, transaction times, and especially transaction fees are increasing a lot. At this moment, the medium gas price is 181 gwei ($6.98).
If you want to find out what you can by for $6.98, go here: https://www.amazon.com/Gifts-Under-7-Dollars/s?k=Gifts+Under+7+Dollars — for example, a keychain with “I hope your day is as nice as my butt”.
Truth is, most developers, and people in general, do not want to start from the beginning when it comes to developing code on a new blockchain. If developers already did all the work on Ethereum, why repeat it? That is why blockchains that support the Ethereum Virtual Machine (EVM) are easier to use and may be adopted sooner than “more unfamiliar” counterparts. Additional, both BSC and FTM attract a significant amount of partnerships at the moment. Due to EVM-compatibility, every day new projects are deployed to BSC and FTM, and especially DeFi and NFTs are growing by the minute on both chains. These are the reasons why this comparison will feature BSC and FTM.
Do not get me wrong, there are other chains that support EVM, too (incl. RSK, TOMO, AVAX, TRX, xDAI, MATIC). However, the comparison between BSC (a chain from a massive and powerful unit — Binance — with unlimited resources) and FTM (with an aBFT consensus protocol the only Direct Acyclic Graph (DAG) chain that supports EVM) is a very interesting use case into how the future of crypto could look like.
(If you want to find out more about how “usual” blockchains such as Ethereum or BSC differ from “DAG” blockchains, read it here)
Snapshot: Binance Smart Chain
Launched in September 2020, BSC (based on a code fork of Ethereum) features a Proof-of-Stake Authority (PoSA) consensus mechanism. It has a fixed amount of 21 validators and a 3-second block time. BNB acts as the native token (BNB is for the Binance Smart Chain as ETH is for Ethereum).
BSC allows 300 transactions per second (TPS), while Ethereum can only process 15 transactions per second (source). Please note that these 300 TPS are not confirmed and there are no conclusive statements of Binance on that matter. The time-to-finality (TTP) of BSC is approx. 45 seconds ((⅔*N+1)*Blocktime; given N=21 validators and blocktime=3 seconds). With slashing, it can be reduced to (1/2*N+1)*Blocktime= 33 seconds. (source)
(Many argue that TTF is more important than TPS. Definition: “Finality is used to measure the amount of time one has to wait for a reasonable guarantee that crypto transactions executed on the blockchain will not be reversed or changed. In other words, they will not be lost.” — Binance Academy)
Because BSC is EVM-compatible, it launched with support for the rich universe of Ethereum tools and DApps. In theory, this makes it easy for developers to port their projects over from Ethereum. For users, it means that applications like MetaMask can be easily configured to work with BSC. Seriously — it’s just a matter of tweaking a couple of settings. Check out Use MetaMask for Binance Smart Chain to get started. — Binance Academy (Both BSC and FTM support EVM-compatibility)
- Sending 1 transaction of BNB from A to B: Nearly instant (approx. 3 sec) and 0.00021 BNB ($0.06) transaction fees (hash)
- Swapping BNB for another token (example on 1inch, swap from BNB to BAKE): Nearly instant (approx. 5 sec) and 0.0019536 BNB ($0.55) transaction fees (hash)
Everyone being familiar with the Ethereum blockchain realizes how impressive those figures really are. However, please take into consideration that both coins — BNB and BAKE in this case — are now on the BSC chain, and if you would need to use those on the Ethereum blockchain you would need to transfer them via a bridge, which might be more costly (esp. if it involves ETH transactions, which it certainly will).
A controversial topic surrounding the Binance Smart Chain is centralization: “The limited amount of nodes on the BC (21) are all operated by Binance and therefore gives Binance total control of the blockchain. Already, the BSC has prevented withdrawals for users, which is unacceptable. It raises the concern that Binance can prevent users from accessing and moving their funds in the future. No blockchain should allow for that. As the mantra goes, not your keys, not your coins.” — Source with further deep dive into the topic. For now, I will assume a centralized node structure.
Snapshot: Fantom Opera
Fantom is a fast, high-throughput open-source smart contract platform for digital assets and dApps. Its aBFT consensus protocol should deliver unparalleled speed, security, and reliability. Its native token is FTM. It features a Leaderless Proof-of-Stake system. It has 44 validators, but the amount is not fixed and the validator prerequisites are currently lowered to increase validators and decentralization even further.
(For a short excursus into Leaderless Proof-of-Stake and why having leaders in a Proof-of-Stake mechanism can lead to centralization problems, I think this gives good reasons. I will deep dive into the topic in another article.)
Due to its unique consensus protocol, there is no valid data on how much tps Fantom can support. Estimates range from 1,500 TPS to up to 300,000 tps. While the latter seems to be very over-exaggerated, it seems reasonable to assume 1,500+ tps. The time-to-finality TTF of Fantom is 1–2 seconds (read up on it here).
At first glance, Fantom seems to be near identical to BSC: It supports the Ethereum Virtual Machine (the smart contracts on Fantom are equal to those on ETH and BSC). The transaction fees and speed are on-par, if not better, then those of BSC. Even the addresses are the same (you can have the same address on ETH, BSC and FTM). However, under the hood, it is completely different.
Lachesis, Fantom’s algorithm, is asynchronous, leaderless, and final while also being Byzantine Fault Tolerant. Short and easy: (1) BSC (as a fork of ETH) has a lot of blocks on a chain: Block-Block-Block-Block-… This is how most blockchains are built up. (2) FTM does not have a consecutive chain of blocks. Imagine it more like a motorway in which blocks drive on different lanes, sometimes they leave, sometimes they enter again.. but the motorway itself defines the rules. This website gives detailed information on Lachesis, and this one on DAG which I think is quite good.
- Sending 1 transaction of FTM from A to B: Instant (approx. 1–2 sec) and 0.0004664 FTM ($0.0001944) transaction fees (hash)
- Swapping FTM for another token (example on SushiSwap, swap from FTM to USDC): Nearly instant (approx. 5 sec) and 0.002621542 FTM ($0.00108978) transaction fees (hash)
Also here everyone will be impressed by the ultra-low transaction fees ($0.001089 for a token swap sounds surreal). As with BSC, be advised that are these coins are now on the FTM chain, and if you would need to use those on the Ethereum blockchain you would need to transfer them via a bridge, which might be more costly (esp. if it involves ETH transactions, which it certainly will).
Comparison of both along pre-defined metrics
Both technologies are amazing, and it is phenomenal that more and more chains can compete with the versatility of Ethereum, while offering significant improved metrics.
Below, I have summarized all relevant and observed metrics: EVM compatibility, consensus mechanism, TPS, # of validators, TTF, node structure, transaction speed and cost and the current market capitalization.
One element I did not mention until now is cross-chain communication and the relevance of bridges. Due to their EVM-compatibility it is possible, and in many cases already implemented, to build bridges between chains and e.g. transfer tokens from ETH to FTM and to BSC. This opens up the possibility to use Layer 1-chains (like FTM and BSC) as helpers for the congested Ethereum chain and transfer a majority of transactions to FTM or BSC to decrease the transaction amount on ETH (therefore speeding up the change and making fees more affordable). I will cover this topic in another article.
In this article I have given you an overview of two very interesting technologies — the Binance Smart Chain and Fantom. Both offer significant faster and cheaper transactions than Ethereum, both support the EVM, both grow by the minute — while being built on completely different technologies.
If you want to find out more, you can get information at:
https://academy.binance.com/ for Binance Smart Chain
https://fantom.foundation/ for Fantom
or https://twitter.com/AlexejRomanovic to follow or contact me.
Have a nice day and stay safe.