In Binance's own words, "Binance Smart Chain (BSC) is best described as a blockchain that runs in parallel to the Binance Chain. Unlike the Binance Chain, BSC boasts smart contract functionality and compatibility with the Ethereum Virtual Machine (EVM). The design goal here was to leave the high throughput of Binance Chain intact while introducing smart contracts into its ecosystem."
Binance Smart Chain achieves ~3 second block times with a Proof-of-Stake consensus algorithm. Specifically, it uses something called Proof of Staked Authority, where participants stake BNB to become validators. If they propose a valid block, they’ll receive transaction fees from the included transactions