According to data by blockchain analysts Bitquery, fees on decentralized exchanges (DEXs) using Binance Smart Chain (BSC) were 49 times cheaper than DEXs running on Ethereum.
Binance vs Ethereum
Binance Chairman CZ posted on Twitter data showing how his company’s exchange platform fares against the competition.
Binance’s recently launched Binance DEX (which runs on BSC) saw over 121,000 users execute approximately 5 million trades in the past 5 months alone. The total amount of fees paid for these transactions was $456,000 (or ~$0.09 per transaction).
While Ethereum-based decentralized exchanges (DEXs) saw a significantly larger number of transactions (46 million), the network’s users also paid a significantly higher $207 million in fees (~$4.5 per transaction).
DEXs are types of exchanges that facilitate peer-to-peer cryptocurrency trading, without any third-party intervention.
DEXs skyrocketed in popularity in 2020 with applications such as Uniswap. Those running on Ethereum posted over $56 billion in trade volume (cumulative), according to Bitquery.
The CZ universe expands
Binance Smart Chain was launched in April 2019 by Binance, the largest cryptocurrency exchange in the world by volume.
Binance says its primary focus is to facilitate fast, decentralized trading. The Binance DEX is the largest DEX on BSC and is bid as “one of the friendliest” of all DEX offerings.
Binance CEO and founder Changpeng Zhao is on a product development spree. In April last year, his exchange launched Binance Card, which aims to allow Binance users to “shop and pay with crypto anywhere in the world”.
Moreover, the leading cryptocurrency exchange firmly planted its flag in the decentralized finance (DeFi) space late last year, with the launch of Binance Launchpool.
The Launchpool allows Binance users to stake BNB, BUSD as well as other tokens to earn rewards.
Will Ethereum lose market share in 2021?
The BSC figures are just the latest accomplishment in the exchange’s ambition to “exchange the world”. This ambition could see BSC challenging Ethereum’s dominance in 2021 as the preferred platform for DeFi.
Some in the cryptocurrency community see this as a positive thing, and point to the infamous CryptoKitties saga. CryptoKitties is a decentralized application (dApp) that took off towards the end of 2017.
The dApp allowed users to buy, sell, and collect ‘CryptoKitties’, some of which were valued at over $400,000 at the time. The surge in interest the dApp brought to Ethereum’s network briefly caused the entire network to crash.
It’s this, critics say, that could prevent Ethereum’s network from having mainstream use.
However, despite the hurdles, Ethereum is still the industry’s number two cryptocurrency. Since 2017, its network has upgraded several times and recently launched a new proof-of-stake consensus mechanism.
Though BSC is making waves, Ethereum still controls the ocean.