The rapidly emerging Dex platform Binance is proving to be an at par contender to Ethereum. It has witnessed a price growth of 108.5% in just the last 14 days. On the other hand, Etheruem still struggles with network congestion and high gas fees.
The Ethereum community has been eagerly anticipating the imminent and long-awaited release of Ethereum 2.0, as well as the transition from Proof-of-Work to Proof-of-Stock consensus.
This step is essential for Ethereum, as scalability has often reached its limits in the recent past.
Nicholas Merten tells his 428,000 subscribers that Since Ethereum Layer 2 scaling solution Optimism has delayed the public launch of its mainnet, some traders may have temporarily chosen Binance Smart Chain (BSC) to trade altcoins, pushing up the price of BNB.
According to Merten, If Ethereum wants to keep the crown of being the major layer one protocol that it thinks it already is and capture the next wave of users coming down the pipeline, it needs to move much faster on layer 2. Since they haven’t made it official yet.
Binance Smart Chain is a good example of this. They also proved how simple it is to disrupt this chain by identifying a single value proposition that Ethereum doesn’t have right now and discover something that someone is ready to sacrifice which is absolute complete decentralization.
Ethereum must act quickly to avoid losing another significant advantage. Today, other blockchain platforms are already more effective. It’s just a matter of time before they have some involved developers and users.
However, if nothing changes soon, a growing number of users and developers will abandon the platform in early 2021.
Though BSC and Ethereum appear to be in rivalry right now, Merten believes that the two chains will eventually coexist and complement one another.
Could it be that both chains exist? Could it be that BNB almost services as a layer 2 on top of Ethereum? Some people argued against that. They say that other layer 1s can’t be layer 2s. They’re not even comparable here. I think that that’s quite biased.
There’s xDAI, as well as many other blockchains and layer 2 solutions, all of which have roughly the same centralized or relatively centralized components as BNB and Binance Smart Chain. Is it possible that Binance Smart Chain has just landed a spot as a possible layer 2?”
Here is a comparison of some parameters to gauge the market relevance and pace of both the leading platforms.
Total value locked
Etheruem has a TVL of $51.87 Billion currently. The platform made a steady growth towards the end of last year, but this year the growth has been plateauing and stalling because of congestion and high gas fees of the platform.
Whereas Binance already has $30 Billion TVL, and the volume is growing faster and steeper.
Binance has an upper hand in small volume traders and stakers as it is cheaper than Ethereum. While for large traders and stakers high gas fees don’t make a difference and hence stay on Ethereum itself.
The user base of DApps
Etheruem has a huge number of DApps on its platforms, but the concentration of the user base rests only in the top 8 DApps of the platform like Uniswap, Sushiswap OpenSea Synthetix, and Axis Infinity, causing congestion problems.
Meanwhile, Binance has 6 times fewer DApps than Ethereum but the concentration of the user base is distributed among all.
In comparison, BSC’s Pancakeswap has 64K users whereas Uniswap has around 50K users. Here Pancakeswap has already taken over Ethereum.
Binance is taking over Ethereum in terms of daily transactions too. While Ethereum just has 1.5 Million transactions every day, Binance Smart Chain has 5 Million transactions per day. Hence, BSC has 3 times more volume than Ethereum does only because it is significantly Cheaper.
Block times and Unique Addresses
The average block time of Ethereum is 13 seconds which is quite good but Binance has a block time of 3 seconds consistently throughout all transactions. In terms of unique addresses,
Etheruem has unique addresses of 147 million, whereas Binance has 64 Million, i.e almost 3 times lesser, but it is catching up pace faster and better every day.
After a brief look at all the above parameters, it is safe to conclude Binance will definitely flip Ethereum, but what is to be watched out for is how much more time will it take to achieve that.