DeFi Growth Continues on Ethereum, Stutters on Binance Smart Chain

Binance has become more prominent in the news recently per regulatory issues, banks bans and several other challenges facing the leading crypto exchange.

Binance Smart Chain is also beginning to feel the impact and it is starting to lose its competition against Ethereum in their fight for the heart of the decentralized finance ecosystem.

According to a review from Messari, while Defi has enjoyed tremendous growth in the last one year, the space has experienced some downturn in Q2 2021 and Binance Smart Chain is taking the most hit.

Messari, the cryptocurrency data provider, said in its Q2 2021 DeFi review that “DeFi protocols saw activity decrease in the second half of the quarter as speculation in markets died down.” Decentralized Exchanges volume jumped from $221 billion to $404 billion between April and June, however, the figure dropped from $203 billion to $95 billion towards the end of the quarter.

Messari attributed the excessive loss in May to Binance Smart Chain, with extension to DeFi apps, owned by Binance. The provider says, “Combined with a series of hacks and exploits on BSC leading to hundreds of millions of dollars in losses, BSC saw speculation dry up dramatically in June, leading to PancakeSwap volumes diving 69% in June.”

Messari noted that BSC “may have been a victim of short-term thinking.” Blamed investors for using BSC product-based with little use. In contrast, Ethereum-based product, Polygon is gaining because its host blockchain offers to-scale solutions to hedge against speed and cheaper transactions.

DeFi Growth Continues on Ethereum

Per a report, Ethereum’s DeFi ecosystem is showing no sign of slowing down. A Dune analytic data reveals that Ethereum’s unique addresses with DeFi hit 3 million. The result from July 13 shows over 3 million addresses interact with the ecosystem.

Furthermore, Ethereum’s top decentralized exchange, Uniswap, is becoming the most popular with over 2.3 million unique addresses. Compound, a decentralized money market, is currently placed second, racking up 325,000 addresses since launch. 

Additionally, Ethereum-based DEX, UniSwap, reclaimed the position as the king of the DEX market. However, Binance cannot be underrated within the ecosystem for its capacity; though its several regulatory scrutinies may not be to its  advantage.

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