Binance has extremely low transaction fees for starters compared to Ethereum, which is quite evident in the exponential growth of the number of projects launching on the Binance Smart Chain. So much so that Uniswap has lost its position to Pancake.
Binance has optimized its smart chain network for both speed and cost, two of the factors that have made it challenging to launch and trade tokens on the Ethereum network. The adoption of Binance smart contracts is also creating a ripple effect felt across the Binance ecosystem. At the moment, Binance is making new highs every day and is currently hitting over $500 per BNB.
Besides the cost aspect making the Binance ecosystem quite a threat to Ethereum dominance, there is a host of other factors that make the Binance ecosystem primed for growth. One of them is its robust DeFi ecosystem. DeFi is huge, and though it had taken a backseat during the recent NFTs rally, it seems to be back with a bang.
Compound, one of the world’s most significant DeFi projects, has a total value locked of $10 billion. This is exponential growth in just one quarter, considering that it had a total value locked of $2 billion at the beginning of the year. With the overall market traction growing again, DeFi could grow even bigger, and for its efficiency, Binance could take a sizeable chunk of this market.
A huge number of DeFi projects are already running on it, including Aave, DForce, MCDEX, 1inch. Exchange, WazirX DODO, DeBank, Bounce Finance, ForTube, and MCDEX. As this number grows and the total value locked increases, the overall value of the Binance ecosystem will grow.
Given that projects issued on the Binance network are compatible with the Ethereum Virtual Machine, developers find it easy to port projects, adding to Binance-based projects’ growth. It is not hard to see why the balance of power in DeFi could be shifting away from Ethereum and towards Binance.