Decentralized Finance is no longer an experiment. It has turned into a movement that is leveraging blockchain to transform the entire financial system to run without middlemen. DeFi development started as a use case of Ethereum blockchain but slowly and steadily blockchain like Binance Smart Chain (BSC) has started to catch up. According to DeFi Prime, Ethereum Network has 232 DeFi projects running on it and Binance Smart Chain has 31 of them built on it.
Recent data by TheBlockCrypto.com suggests that the total value locked (TVL) in Ethereum DeFi Apps is close to $80 billion. On the other hand, the TVL in BSC DeFi Apps has crossed $34 billion. As value locked has proven to be a clear indicator for evaluating the adoption scale of a DeFi project, it is evident that more users are rushing toward BSC.
Of late, Binance Smart Chain has been on a tear. In early 2021, it surpassed Ethereum blockchain in terms of transaction count and daily unique active wallets. On May 1, Binance Smart Chain processed 6 times more transactions than Ethereum. While Ethereum processed 1.4 million transactions, BSC processed 7.3 million.
While Total Value Locked in DeFi apps built on BSC is trying to catch up with Ethereum, the trade volumes of BSC-based decentralized exchange (DEX) PancakeSwap have surpassed the trade volumes of Uniswap and Sushiswap. On April 29, PancakeSwap traded $1.6 million, while Uniswap trailed behind, with $1.1 billion. This is a remarkable achievement for a relatively new DEX, PancakeSwap.
Binance Smart Chain (BSC) was launched in September 2020. Since then, it has demonstrated that it is unarguably one of the best blockchains for the DeFi space. Here is why:
• Interoperable Blockchain
The current space is infested with good performance blockchains but all these are working in solace. Binance Smart Chain was designed to bridge the gap between blockchains. Basically, it is built with a dual chain architecture which makes it even more suitable for DeFi to support the entire financial system so that users can easily transfer their assets. Because of interoperability, BSC becomes a blockchain that can support many use cases and DeFi is one of them.
• Low Gas fees
In the recent past, a single Ethereum transaction was costing over $100 to the users. Some users lost the entire transaction amount as the transaction fees. This network fee goes to the miners or validators. Because of the network scalability issues, the Ethereum Network started facing high transaction fees and clogged networks. As a DeFi app involves multiple transactions, the DeFi users had to pay very high fees at almost every step.
On the other hand, Binance Smart Chain was charging somewhere between $0.01 — $0.05 for the same transactions. This is because Binance Smart Chain off-chains many activities that lead to the final transaction. As a result, decentralized finance development using Binance Smart Chain is saving hundreds of dollars as trading fees.
• Faster transactions
Ethereum’s scalability challenges led to the transactions being stuck on chain for days together. Due to this, between February 23 and 27, the total value of ETH sent across the network fell from $11.1 billion to $3.84 billion. That’s a whopping 65% drop.
For DeFi development, avoiding unnecessary delays is very important. Thus, DeFi developers need to be very careful while deciding the blockchain underlying the app. Interestingly, BSC was designed to address the scalability issues and to deliver high throughput. This makes it perfectly suitable for DeFi App developers.
Undoubtedly, Binance Smart Chain is a faster and cheaper alternative to Ethereum blockchain. Along with that, it supports easy porting of Ethereum dApps to BSC because of its Ethereum Virtual Machine (EVM) compatibility.
With Binance Smart Chain’s growing popularity, decentralized finance development is also reshaping. Antier Solutions is keeping pace with the changes in the space and is developing cutting-edge DeFi apps on Binance Smart Chain. If you are looking for a development partner on BSC or are looking for ways to port your app from Ethereum to BSC, we can be your reliable technical partner.
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