The horrific transaction fees of the Ethereum blockchain are tilting the divide in the DeFi market in favor of the Binance Smart Chain. Finally, the native currency of the largest BSC PancakeSwap platform takes advantage.
A power struggle rages on in the DeFi market. While Ethereum was able to focus most of its shares on itself until a few months ago, the Binance Smart Chain (BSC) is gradually gaining the upper hand. The increasing transaction costs of competition play into BSC’s growth cards. The increase in Ethereum gas fees has caused many users to switch to Binance Smart chain. The DeFi trench battle between Ethereum and Binance is also a distribution battle between the biggest trading platforms in each case. PancakeSwap is gradually taking pole position, which is reflected in the price evolution of the local currency CAKE. The price of CAKE has risen 138% in the past 30 days and only hit a new record high of $ 43.96 on April 30.
Pankaceswap is a decentralized exchange (DEX) through which BEP-20 tokens can be redeemed. In particular, the many passive sources of income such as staking and yield farming opportunities have fostered the platform’s rise in recent years. month. As with Uniswap, users receive returns on the cash made available – only at significantly lower fees and with faster transactions.
With just under 60,000 users, PancakeSwap is by far the largest platform in the Binance smart chain. At the start of the year, the average number of users was 8,000. Uniswap has 12,000 additional users. In terms of network activities, PancakeSwap has already overtaken the Ethereum competition.
On April 21, smart chain Binance recorded a record 9.1 million transactions, with PancakeSwap accounting for around 20% of the total. The number of daily transactions at DEX was latest to 2 million.
In comparison: according to Etherscan, the record for all Ethereum transactions on April 22 was 1.5 million. Uniswap currently has 247,000 transactions per day. PancakeSwap’s 24-hour trading volume also exceeds Uniswap’s by nearly US $ 30 million. With a total value of US $ 10.4 billion, the Total Locked-In Value (TVL) is also approximately US $ 2 billion above Uniswap’s TVL. In view of these developments, the evolution of the price of CAKE is not surprising. As long as Ethereum blockchain gas charges are in the critical zone, PancakeSwap’s growth trend is expected to continue accelerate.
One downside, however, remains: Unlike the Ethereum blockchain, the Binance smart chain is highly centralized in the hands of the world’s largest crypto exchange. This should not mean direct inconvenience to users. But the rise of Binance comes with growing influence in the market, which could also be noticeable in the statistics on PancakeSwap.
Critical voices are multiplying and doubts about the official figures are also increasing. The fact that a smart contract alone is responsible for nearly 2 million transactions has sparked speculation as to whether the transactions were possibly generated by a bot to artificially increase the volume of PancakeSwap.
However, the suspicion could not be proven. Sam Bankman-Fried, CEO of FTX and Alameda Research, although by On chain the analysis to the effect admitted that there would be “BSC majority of the actual volume”, “sure” was, but it did not.
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