The meteoric rise of the Binance Smart Chain and Binance Token (BNB) has hijacked the current crypto bull market, every crypto trader and blockchain project is considering switching partially or fully to the Binance Smart Chain. This crypto experiment was born out of a desire for crypto traders to trade on decentralized exchanges while paying low trading fees.
Apart from scalability, transaction fees are a very important area of concern for anyone looking to use a particular blockchain. The transaction fees on the Ethereum blockchain and trading on Ethereum based decentralized exchanges like Uniswap has become a nightmare. Small traders and investors can no longer afford these high fees which has made the ethereum blockchain seem like a blockchain exclusively for lambo owners.
Binance Smart Chain
Binance Smart Chain or BSC, is a blockchain developed by Binance the biggest cryptocurrency exchange in the world. This blockchain was developed purely to compete with the Ethereum blockchain by offering cheap transaction fees and better scalability. BSC for me is a complete clone of the Ethereum blockchain as it is compatible with the Ethereum Virtual Machine (EVM) and also supports Ethereum tools and DApps.
There’s currently a mass exodus of crypto traders, investors and blockchain projects moving from the Ethereum blockchain to Binance Smart Chain, with majority of them citing cheap and affordable transaction fees as the major reason.
The Binance Ecosystem is growing
The native token of the Binance ecosystem, BNB has not been left out in all of these. BNB today hit an all-time-high price of $295 and is currently the third cryptocurrency based on market capitalization after Bitcoin and Ethereum.
There are almost 2x more transactions on #BSC than on ETH.
If you want more users for your Dapp, you need to be on #BSC now. pic.twitter.com/ZYnbFOVysc
— CZ 🔶 Binance (@cz_binance) February 18, 2021
Also, the biggest decentralized exchange on BSC, Pancakeswap just flipped Uniswap to become the biggest decentralized exchange based on trading volume with a $1,751,394,201 24h volume at time of writing.
If the fees are cheap, will they come?
This hasn’t entirely been the case for some blockchains despite their cheap transaction fees. Tron for example offers little or no fees for transacting on their network but mass adoption hasn’t really come for them. Polkadot blockchain was always thought of as the Ethereum killer but Binance Smart Chain just came out of nowhere to surprise everyone.
This shows that low transaction fees aren’t entirely behind this mass exodus but Binance Smart Chain interoperability feature which is its compatibility with the Ethereum Smart Chain, I will talk more on this in the next heading.
BSC’s Ethereum Virtual Machine compatibility
One important feature of the Binance Smart Chain is its compatibility with the Ethereum virtual machine (EVM). This means you can literally deploy Ethereum tools and DApps on BSC. For instance, with just a few tweaks DeFi enthusiast can start farming or trading via their Metamask or Trust Wallet DApp paying very low fees. People want to farm, trade and lend using Decentralized Finance (DeFi) protocols while paying low transaction fees and Binance Smart Chain currently provides this.