Why are DeFi projects moving from Ethereum to Binance Smart Chain?

Within six months of its mainnet launch, Binance Smart Chain had over 58,000,000 unique wallets created. Since February 2021, BSC network has been handling over 2 million transactions per day while Ethereum is handling only 1.2 million daily transactions. As a result, the total value locked (TVL) by DeFi projects on Binance Smart Chain has crossed $22.9 billion. Many leading blockchain projects like 1Inch, Cartesi, and Linear Finance have already embraced BSC to create token on Binance Smart Chain.

Is Binance Smart Chain superior to Ethereum?

As per Chang Pang Zao, Binance Smart Chain is not an Ethereum killer. Basically, it is designed to complement the Ethereum chain:

• Ethereum compatible:
Binance Smart Chain is EVM (Ethereum Virtual Machine) compatible. As a result, a user can connect an Ethereum wallet within seconds to the Binance Smart Chain network.

• Near zero fees gas fee
Ethereum’s transaction fee issues have become a major roadblock. In fact, a trade on Uniswap, the leading decentralized exchange built on Ethereum, costs close to $40. On the contrary, the same trade costs somewhere around 0.0004 BNB on DEXs built on BSC. That is a major reason why the 24-hour trade volumes on Pancakeswap, the DEX built on BSC, is surpassing Uniswap’s trade volumes. As a result, more developers now choose to create BEP20 token instead of an ERC20 token.

• Fast confirmation times
As a proof-of-stake consensus-based blockchain, Binance Smart Chain achieves 3 second block time. Irrespective of the number of transactions, the block times on BSC remain unchanged.

What advantages does BSC offer to the dApp owners?

• Building dApps in the rich and growing Binance ecosystem ensures you have access to the top technology stack.
• BSC supports cross-chain DeFi mechanisms, which increases the DeFi interoperability
• Binance ecosystem funds and bootstrap innovative DeFi projects.

Effectively, whether you create a dApp or create token on Binance Smart Chain, BSC is a better choice than Ethereum.

What kind of dApps can be built on top of BSC?

Apart from token development on BSC, the following types of dApps are being built on top of it:

• Decentralized exchanges on BSC

As BSC supports low-cost and high-speed transactions, DEXs with innovative features can be built on the chain. To state some examples:
• DEXs like 1inch.exchange built on BSC help traders avoid high price slippage.
• As BSC is a high-speed transaction chain, developers can combine on-chain analytics with trading capabilities.
• Innovative algorithms like PMM (Proactive Market Maker) have been developed. These algos provide on-chain and contract-fillable liquidity.
• Support stablecoin swapping with low slippage by developing DEXs on Binance Smart Chain.
• Support peer-to-peer trade so that traders do not have to give up control of their assets.
• AMM-based exchanges that incentivize LPs via farming, lottery, and NFTs.
• Users can swap between ERC20 tokens through BSC-supported automated liquidity pools.
• Building cross-chain bridges using Binance Smart chain that facilitate the bi-directional transfer of tokens from chains like Polygon, Ethereum, BSC, and more.

• Yield Aggregators
Yield Aggregators play a crucial role in the yield farming economy. These help traders maximize their profits by leveraging multiple DeFi protocols. The users will have to stake their funds in the aggregator so that they can earn a variable or fixed return on investment. Some innovative yield aggregator models on BSC are:
• By deploying yield aggregators that support Autofarm vaults staking.
• Multi-chain yield optimizer which helps maximize return on assets. The users do not need to worry about the cost and hassle of managing daily harvest.
• Deploy the latest farming techniques and then use automatic protocols to farm the highest yields.
• Auto compounding and yield optimization
• Cross-chain yield aggregator across blockchains like BSC and Ethereum.

Margin Trading on BSC   
Margin trading on Binance Smart Chain gives users access to additional assets compared to assets available on the Ethereum mainnet. Interestingly, it significantly increases the liquidity available on the platform.

Decentralized Lending on BSC 

Users can utilize decentralized lending services on BSC without worrying about high gas fees. For example:
• The lending protocols can be designed with altered pools and create Binance Smart chain Token.
• Platform can be designed to enable users to lend assets. The users can earn interest or enter leveraged positions.
• Indefinite-term loans and fixed interest rates can be designed. 
• The platform can allow used variety of tokens as collateral and mint stablecoins. 
• Synthetic stablecoin protocols can be designed on BSC.

Final thoughts

Binance Smart Chain greatly extends the functionality of the Binance Chain while remaining compatible with EVM. At Antier Solutions, we have a team of in-house developers who have expertise in building powerful dApps on BSC. We are ready to help you develop cutting-edge dApps running on Binance Smart Chain.

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