The rise of Binance Coin (BNB) took the crypto industry by surprise, but it also led to the emergence of another influential blockchain in the ecosystem. Binance Smart Chart or BSC is currently pointing out to the industry and as evidenced by a marked increase in demand.
Taking an immediate example based on on-chain metrics, Ethereum Daily Transactions recorded on February 20 is 1.33 million. BSC registers 2.88 million, which is a minor drop considering it recorded 3.22 million transactions on the 19th.
Binance Smart Chain: Objective untangling with DeFi’s success?
Much like the majority of blockchain systems, Binance Chain had inherent blockchain issues when it came to flexibility and smart contract deployments.
As BSC promoted an effective level of flexibility and interoperability, various DeFi protocols began to flow their development into the BSC network. The main example remains PancakeSwap, a DeFi protocol that has seen over 1000% liquidity growth since the start of 2021. The switch to BSC also stems from the growing demand for DeFi products at an affordable rate.
Eat the Ethereum Market?
Last month, AMBCrypto reported that BSC already had over 100 projects on the parallel Binance chain and that the team was planning to develop DeFi infrastructure for those projects.
The ETH blockchain continues to face high levels of congestion resulting in higher gas fees on all transactions.
This is not an ideal condition for DeFi developers as they have to worry more about transaction fees than innovation. Therefore, a huge advantage with Binance Smart Chain is its EVM compatibility Ethereum virtual machine. Since BSC is EVM compatible, developers have access to the same Ethereum tools and dApps, making it easier for developers to migrate their projects to Ethereum.
Is there a possibility that Ethereum and BSC will prosper together?
Although BSC is a side chain for Binance, it can more or less act as a side chain for Ethereum. According to Messari’s Ryan Watkins, he indicated that EVM compatibility can easily allow Ethereum protocols to derive “incremental” value from the less expensive structure of BSC.
Cross-chain deployments between BSC, Ethereum, and other interoperable blockchains can lead to collective industry-wide growth and reduce congestion on Ethereum.
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