Binance Smart Chain launched in September 2020 and has quickly become one of the strongest contenders to the dominance of the Ethereum blockchain. In February 2021 BINANCE Smart Chain surpassed Ethereum in both transaction volume and unique active wallets. Moreover, new investment initiatives might help to further cement the position of Binance Smart Chain (BSC) in the future.
Within this overview, we will analyze the transaction volume and daily active wallets of the top BSC dapps alongside several new entrants and compare them with Ethereum’s top dapps.
Table of contents
- Key takeaways
- The rise of Binance Smart Chain (BSC)
- Transaction volumes hit new heights of $700 billion
- The most significant ones
- Is history repeating itself?
- The road ahead
Key takeaways
- BSC generated record-high transaction volumes of $745 billion in February
- The chain stands first in terms of unique active wallets with 108,000 in February.
- DeFi dapps Venus and Autofarm are the biggest dapps on BSC with a total of $729 billion in transaction volumes between them.
- New incentivization programs and the announcement of an accelerator fund suggest an even brighter future for BSC.
The Rise of BSC
Lately, we have witnessed massive changes in the blockchain leaderboard. EOS and TRON, which were long considered as key Ethereum contenders, have been replaced by BSC and Flow.
In February 2021 BSC became the most significant blockchain in terms of unique active wallets and transaction volumes. Increasing unique active wallets by 266% from 30,000 in January to 108,000 at the end of February. While Ethereum suffered a downward trend and had around 67,000 unique active wallets.
There are several reasons behind such a rise to prominence for BSC. The first and most important is transaction costs. The Ethereum network is suffering from increased gas fees for almost a year now. While BSC can offer users at least 10 times lower transaction costs.
Secondly, there’s an impressive fund of $100 million to support new projects. More and more new DeFi projects are launching daily on BSC, which suggests a promising future for the chain. Onboarding new projects can be considered one of the key elements for long-term success.
This growing trend didn’t go unnoticed to DappRadar. Users of the Binance Smart Chain can now track their DeFi activities in the DappRadar Portfolio Tracker.
Transaction volume hit new highs of $700 billion
BSC is highly concentrated with Decentralized Finance (DeFi) projects. In February 2021 more than 90 dapps launched on BSC, of which 80% were DeFi dapps. Interestingly, the vast majority of DeFi dapps offer liquidity mining promising more than a 100% annual percentage rate (APR). High yields are another important element for successful user onboarding.
Despite the new launches, several longer-standing dapps had an impact in terms of transaction volume. In February 2021 BSC generated more than $700 billion in transaction volume with decentralized finance dapps Venus and Autofarm responsible for 97% of that volume.
The most significant ones
As much as MakerDao and Compound are key products in the Ethereum DeFi ecosystem, Venus serves a similar purpose on Binance Smart Chain. They have the added advantage of low-cost transactions. By no surprise, Venus generated more than $400 billion in February and is currently the largest dapp by transaction volume on BSC. However, Autofarm is also making big moves.
Autofarm has two main products: Vaults and Swap. Vaults auto-compounds yields at optimal intervals while pooling gas costs through a smart contract code and yield optimization. Autofarm also claims that it uses an optimization tool to enable the highest APYs on its vaults.
Their second product, Swap, is a decentralized exchange (DEX) aggregator aimed at getting users the best prices from DEX trades. Fundamentally it’s designed to split trades across multiple DEXes to ensure the best prices and lowest slippage possible. In February 2021 Autofarm generated around $300 billion and was the second-largest dapp in the blockchain world.
Is history repeating itself?
Despite impressive growth for BSC, there is a certain level of criticism floating in the industry. Many have questioned the platform’s decentralization and also the arrival of several blatant copies of successful Ethereum projects has raised eyebrows. Most recently several NFT projects have started to make some noise within the community.
Binance Punks, or Bunks, is very similar to Larva Labs’ CryptoPunks on the Ethereum blockchain while Bashmasks looks exactly the same as Ethereum Hashmasks.
Not that long ago similar trends were seen within the Tron blockchain where the projects being deployed were very similar to the most popular platforms built on Ethereum. Without a doubt, the activity of industry leaders is often imitated in all enterprises. While usually imitators are left behind, in the case of BSC we might witness the opposite scenario.
The road ahead
Impressive results were not the only milestone reached by BSC. The Binance accelerator fund also gathered pace in February. At the beginning of the month, Binance Smart Chain announced an investment in project Furucombo. Furucombo is one of the most comprehensive decentralized finance (DeFi) aggregators. The investment appears to be a strategic move to further enhance the decentralized finance ecosystem by enabling easy DeFi loan and trading experiences for users.
Furthermore, Binance launched the Most Valuable Builder (MVB) accelerator program under the $100M DeFi Accelerator Fund. The MVB program is split into three phases, the projects entering phase 2 will receive $10,000 in funding, and phase 3 projects will receive $100,000. The top selected projects will also receive up to $2 million in liquidity incentive.
Binance Smart Chain is eager to attract the most significant DeFi projects. By the end of February, the popular Ethereum DEX 1inch integrated with Binance Smart Chain. 1INCH users will now receive access to BSC-based DEXs and lending protocols like PancakeSwap, Venus, and BakerySwap for example. Further announcements have seen big players The Graph and Alpha Finance Lab/Alpha Homora launch on BSC.
Consistent growth in the DeFi sector has done well for BNB. The Binance token is often the main peg in trading pairs, and this resulted in increased demand across the sector. Over the past few months the token went up in value from $37 in January to more than $283 at the time of writing.
To conclude, BSC is continuing an expansion that already generated impressive results. Within just months the blockchain has become a leading network in terms of unique active wallets and transaction volume. Moreover, further incentivization and an increasing number of newly deployed projects suggest Binance Smart Chain is just getting started.
