Why are Binance Smart Chain and PancakeSwap still an important part of DeFi?

The blockchain analytics platform Nansen recently launched an a. released report analyzes user activity on Binance Smart Chain (BSC) and shows interesting trends.

BSC was developed as a “parallel blockchain” for Binance Chain and offers developers who are interested in introducing their tokens in the network, programmability and smart contracts and opens hundreds of project projects such as PancakeSwap (CAKE), Venus (XVS), Auto (AUTO. ). ) and Beefy Finance (BIFI).

BSC’s competitive advantage

BSC works according to a Proof of Staked Authority (PoSA) consensus mechanism in which the participants use Binance Coin (BNB), the native coin of the Binance Chain, to become validators.

Although BSC is compatible with the Ethereum Virtual Machine (EVM), it was created “as a scalable infrastructure to process a large number of DeFi transactions at low cost without sacrificing speed”, used by a variety of Ethereum tools and decentralized applications is supported (dApps).

“One of BSC’s competitive advantages over Ethereum (ETH) is the gas fee that is required to carry out a transaction on the network, which is significantly cheaper.”

Ethereum vs. BSC daily gas fee

At its peak, the number of transactions on BSC was about 10 times higher than on Ethereum, showing a negative correlation between gas fees and transaction numbers.

Ethereum vs. BSC. Trading volume

Apply stablecoins

In the Ethereum network, Tether (USDT), the leading stablecoin by market capitalization, dominates the stablecoin in circulation with enormous margins, where it is again traded almost twice as much as USD Coin (USDC) and DAI plus.

“One would have guessed that Binance USD (BUSD), the 1: 1 USD-backed stablecoin issued by Binance, would beat in terms of daily transaction value and daily unique active users,” said the early stages of the BSC report.

“When Binance Bridge was released to support cross-chain trading from the ERC-20 and TRC-20 platforms, USDT was introduced into the system. People can seamlessly switch from USDT ERC-20 to Ethereum to USDT BEP-20 to BSC, which gives USDT traction. “

“The daily graph of each active user paints a similar picture for BUSD and USDT,” which shows that USDT has managed to outperform BUSD several times while DAI fell behind in third place, with the number of users 40-50- times less.

Daily activity from stablecoins

“This is probably due to the advantage of the base coin that BUSD owns”, since most pools in the BSC network have token pairs with BUSD and BNB.

The daily trading volume of stablecoins peaked in mid-April and then declined significantly.

Daily trading volume of stablecoins

“This period certainly signals to many crypto fanatics that Bitcoin (BTC) hit an all-time high (ATH) before falling more than 50%, showing a correlation between Bitcoin and activity. Stablecoin movement on BSC or DeFi in general. “

Capital size and wallet address of BSC users

“The average value of stablecoin transactions is a good indicator of the capital size and wallet addresses of BSC users,” said Nansen.

As Cointelegraph reported, PancakeSwap’s CAKE token has grown by more than 120% and its daily trading volume surpassed Ethereum in April.

At the same time, the value of stablecoin transactions of $ 1 million or more consistently accounts for more than 90% of the total transaction volume.