DeFi on Binance Smart Chain vs. Ethereum
DeFi projects on Ethereum have attracted so many users over the last year that gas fees on Ethereum have risen to levels that many consider exorbitant. Consequently, this has pushed users to seek alternative, cheaper platforms that allow them to participate in DeFi. One of such is Binance Smart Chain (BSC), which has seen total value locked (TVL) and user growth soar in recent months. In this report, we examine the key differences between BSC and Ethereum and highlight the DeFi ecosystems on each. Moreover, with growth favoring BSC, we discuss whether this is at Ethereum's expense.
BSC sees rapid growth as users seek Ethereum alternatives. In recent months, crypto users have flocked in droves to BSC, seeking its cheaper fees and faster block times. Because BSC is smart contract and EVM compatible, many of the most popular Ethereum dapps have been copied over to BSC. Consequently, BSC has seen unique addresses, a proxy for users, soar from under 1 million in Q4 2020 to nearly 65 million as of April 13, 2021. BSC TVL stood at nearly $34 billion as of the same date, according to Defistation, while 7-day daily active users totaled approximately 435,000, according to data from BscScan, underscoring the growing popularity of BSC.