Other networks are actively working on faster transactions and lower gas fees. How will Binance Smart Chain (BSC) evolve and strengthen its position in the market?
Blockchain analytics platform Nansen has analyzed user activity on Binance Smart Chain (BSC) and highlighted the most interesting trends in a new research report.
BSC was created as a “parallel blockchain” to Binance Chain. The project offered programmability and smart contracts to developers who wanted to launch their tokens on the network. As a result, hundreds of projects such as PancakeSwap (CAKE), Venus (XVS), Auto (AUTO), and Beefy Finance (BIFI) were launched. Just to name a few.
The competitive advantage of BSC
BSC operates with a Proof of Staked Authority (PoSA) consensus mechanism where participants stake Binance Coin (BNB), the native token of the Binance Chain, to become validators.
While the blockchain is compatible with the Ethereum Virtual Machine (EVM), which was “created as a scalable infrastructure to process a large number of low-cost DeFi transactions without sacrificing speed,” it is supported by a variety of Ethereum tools and decentralized applications (dApps).
One competitive advantage BSC has over Ethereum (ETH) is that the price of gas, or the cost required to complete a transaction on the network, is “significantly lower,” the report says.
At its peak, the number of transactions on BSC was about ten times higher than on Ethereum. That suggests an inverse relationship between gas price and number of transactions.
The introduction of stablecoins
According to the report, Tether (USDT) has almost twice as many transactions as USD Coin (USDC) and DAI combined. The coin dominates stablecoin circulation on the Ethereum network by a wide margin.
“One would likely guess that Binance USD (BUSD), the 1:1 USD-backed stablecoin issued by Binance, would completely mop the floor in terms of daily transaction value and unique daily active users,” the report said. It reveals: This was only the case during the early stages of BSC.
“When Binance Bridge was released, supporting ERC-20 and TRC-20 cross-chain transfers, USDT was introduced into the system. People could seamlessly convert an ERC-20 USDT token on ETH to a BEP-20 USDT token on BSC, which led to USDT gaining traction,” the Nansen analyst team further explains.
“The chart of daily active users paints a similar picture for BUSD and USDT,” the report states. The shows USDT was able to outperform BUSD several times. DAI, on the other hand, ended up in a distant second with 40 to 50 times fewer users.
“This may be due to the native coin advantage that BUSD possesses,” the report says, noting that most pools on the BSC network consist of token pairs with BUSD and BNB.
The daily transaction volume of stablecoins peaked in mid/late April and dropped drastically thereafter.
The report clarifies:
“[This period] definitely rang a bell with many crypto crazies as Bitcoin (BTC) reached an all-time high before plummeting more than 50%, showing the correlation between Bitcoin and Stablecoin activity on BSC or DeFi as a whole.”
Overall capital/wallet size of BSC users.
According to Nansen’s research team, “the average value of stablecoin transactions is a good indicator of the overall capital/wallet size of BSC users.”
In April, CAKE by PancakeSwap increased by more than 120%. At the same time, the token’s total number of daily transactions surpassed Ethereum’s.
At the same time, stablecoin transactions worth $1 million or more consistently accounted for more than 90% of total traded volume.
The Nansen research team in the report: