DataDash discussed in a video posted what the future has in store for both the entities, and how the traction might be reversed by Ethereum.
Binance Smart Chain was introduced to replace its precursor, Binance Chain, in September 2020. Ever since, with certain common decentralised financial networks (DeFi) switching to BSC, Binance’s blockchain has evolved tremendously.
Nevertheless, Nicholas Merten, creator of the crypto YouTube channel DataDash, informed his 330,000 subscribers that one of BSC’s greatest weaknesses has always been its centralised existence.
This isn’t even a negative thing by the way, though. It enables BSC, for one, to charge fairly competitive rates. While completing a transaction on Uniswap tends to cost a consumer up to $40, it just requires a dime to do that on BSC platforms such as PancakeSwap.
Dapps driven by BSC are becoming very common in the past few months. PancakeSwap is ranked as the number one in terms of amount of consumers around the world, one place before Uniswap, as per DappRadar. In volume perspective, the two leading slots are both filled by BSC dapps.
At $33 billion, Venus is the total champion,outclassing Autofarm, which is raking in $27.4 billion in volume. nnAt only $ 1.8 billion and $ 1.1 billion, respectively, the Ethereum networks dYdX and Uniswap take up the next two positions.
.@PancakeSwap flipped Uni as the highest volume DeFi Swap. That was so fast. What an achievement. You guys rock! 👏👏👏 https://t.co/YJ0zqhCfIR
— CZ 🔶 Binance (@cz_binance) February 19, 2021
Nevertheless, with regards to overall valuation that has been locked, Ethereum dapps win, with Uniswap setting the pace at $7.6 billion. MakerDAO, SushiSwap, and Compound join each other in the following three positions. The dapps operated by the BSC that have the biggest TVL are Venus ($4.3 billion) and PancakeSwap ($2.34 billion).
Put simply, BSC has been relegated to the chain with the third-largest number of distinct active wallets. According to DappRadar, there are more than 50,000 exclusive wallets connected with it. This is fewer than 18,000 ETH, notwithstanding the fact that it came into being almost five years later.
In addition, Binance has already drawn in several developers who have been working on Ethereum by making its chain compatible with the Ethereum Virtual Machine. This helps Ethereum-based dapps to operate on Binance Smart Chain.
Eventually, the advent of DeFi on the Binance Smart Chain has sped up the emergence of the Binance Coin, which has rallied to insane levels. BNB is officially the world’s third-largest digital currency, with a market capitalization of over $43 billion. The price rallied 700% last month and hit a all-time peak of $337 last week.
In spite of quick growth, BSC faces some issues, Merten cautioned. To begin with the venture is centralized as it was built by a centralized exchange. Binance continues to hold considerable control on the network, he pointed out.
There could be worries when an increasing number of assets are hosted on the network, in case there are no adequate control mechanisms. As it is decentralized to a lesser extent, therefore the level of security is a bit less.
Furthermore, Merten trusts that BSC has been gaining from the issues faced by Ethereum. This includes huge gas fees and a dearth of decentralization on Ethereum blokchain. After Ethereum addresses the issue, it could gain ground against the BSC again.
The crucial factor that will decide the dominance of Ethereum with respect to DeFi is the installation of Layer 2 scaling solution.