Binance Smart Chain Is Starting to Rival Ethereum: Here's Why

Binance Smart Chain (BSC) is starting to match Ethereum (ETH) on some key network numbers—but it’s all dependent on one single application, according to DappRadar’s report published today.

“In January BSC reached new heights in terms of transaction volumes and unique active wallets. If the trend continues in February, BSC might become the number one blockchain in terms of transaction volume,” the researchers summarized.

In January, the total transaction volume on BSC amounted to $15 billion. This is up considerably compared to previous months.

But Binance Smart Chain has all of its eggs in one basket. Out of 66 BSC-based decentralized applications (dapps) tracked by DappRadar, Venus (XVS) is responsible for over 90% of the total transaction volume. With $24 billion of value already transferred during the first third of February alone, it is now the largest dapp (across all blockchains) by this metric.

In comparison, Ethereum-based dapp Curve, which is currently the second-largest dapp across all blockchains, has generated just over $18 billion during the same time period. 

There are some big differences between Ethereum and Binance Smart Chain. The former has a much larger ecosystem with transaction numbers spread more widely among a greater number of dapps. It is also fully decentralized with thousands of developers. In contrast, Binance Smart Chain is supported by a centralized exchange and has centralized elements in order to process so many transactions at such a low cost.

Such rapid growth, however, has managed to rub off on Binance Coin (BNB). Just yesterday, the token reached a new all-time time high of $100 and today it continued its rally up to around $130.

While PancakeSwap, another “killer dapp” on BSC, can’t brag about similar performance in terms of its transaction volumes, it is ranked second by the total number of daily active wallets—only 12,000 users behind Uniswap.

“The reasons behind such a surge could be that PancakeSwap added more gamification recently, adding non-fungible tokens (NFTs), profiles and teams,” the researchers noted, adding, “Through these playful elements they want to onboard new users into the DeFi ecosystem while giving them early access to liquidity pools, and exclusive digital collectibles.”

In the near future, PancakeSwap also plans to reward its top users with governance credits.

While BSC’s native dapps are showing big results all by themselves, Binance is also actively working on expanding its ecosystem. For example, the exchange has announced a $10 million fund to support projects on Polkadot and $2.4 million funding for Plasm Network.