Binance, dubbed as the leading crypto exchange to date, is set to dominate the cryptocurrency realm. The exchange also made its plans about dominating the newly-emerging DeFi sector evident by launching new products and services almost every week.
The latest addition in Binance’s DeFi portfolio, dubbed Binance Smart Chain, already gained popularity among new DeFi-based liquidity provider protocols. A wide array of DeFi clones emerged on Binance’s Smart Chain, including BakerySwap, BurgerSwap, and Cream Finance, all within the past couple of weeks.
According to Binance, the new Smart Chain enables developers to build various dApps on top of it and provides a high-speed infrastructure for DeFi protocols. Also, the decentralized network utilizes a Proof-of-Stake Authority (PoSA) consensus algorithm, as well as a series of cross-chain mechanisms, which enable interoperability between the new blockchain and the Binance Chain. The consensus algorithm is built on a network of 21 validators and produces one block per 3 seconds. The validators will get BNB rewards for executing tasks on the blockchain, thus ensuring stability and incentives.
Binance’s CEO Changpeng Zhao tweeted that the new Smart Chain is now accounting for 14% of all Ethereum trading volume. Also, Zhao emphasized that the market cap of Binance’s native BNB coin reached a tenth of Ethereum’s which indicates Zhao’s efforts to battle Ethereum.
According to data from BSCScan.com, daily transactions on the Smart Chain reached almost 140,000 on September 13, while Ethereum recorded close to a million transactions daily. However, most of the activity on the Smart Chain comes from a single swap protocol, called BurgerSwap, which managed to raise as much as $400 million in BNB in 24 hours.
Meanwhile, Changpeng Zhao showed his bullish sentiment for DeFi, inviting Ethereum-based DeFi projects to join Binance Smart Chain. However, Binance’s CEO explained that the Smart Chain is not a rival to Ethereum, “stressing that BSC never aimed to replace ETH, BSC is just ETH-compatible”. “Smart projects are giving their users more options. Option for cheaper fees." Zhao tweeted.
In the meantime, the DeFi frenzy gave BNB a massive boost in its price, as the new Smart Chain enables liquidity providers to make deposits and yield rewards in Binance’s native token.
On September 14, BNB reached a yearly high of $32, according to data from Cryptobrowser.io, marking a 30% price increase since last week. The price movement, however, continued and as of press time BNB trades at $32.50 with a market capitalization of $4,702,219,216 securing BNB fifth place based on market capitalization.