This week, transaction fees for the Ethereum blockchain rose to a level that made the decentralized applications (dapp) running on it practically unusable. In some cases, transferring as little as $ 5 through the second largest public chain cost up to $ 300.
With no other choice, many of the dapp developers decided to perform the same operations on a competing blockchain network, the Binance Smart Chain, a public ledger that offered the same tasks that Ethereum performs at 99 percent lower cost. On Wednesday, the BSC blockchain processed around 2.12 million transactions compared to 1.26 million for Ethereum.
The sharp shift was also evident when PancakeSwap, a rip-off from UniSwap launched on the BSC blockchain, competed with decentralized exchanges in Ethereum and saw liquidity surge of more than 1,000 percent this year, accompanied by a strong volume – of $ 37 million on January 1 to $ 1.68 billion on February 19.
Meanwhile …
… Binance Coin (BNB / USD), a native token in the Binance ecosystem, has always been at the center of developments at BSC. Prices in the US dollar market rose from $ 42 on Jan 1st to $ 291 on Jan 19th. Traders only saw opportunities by looking to Binance’s expansion into the Ethereum turf.
. @ Uniswap should consider switching to #BSC. Not easy to walk with weight on your ankles. Follow the users.
– CZ 🔶 Binance (@cz_binance), February 19, 2021
In the past five days, the BNB / USD rose more than 100 percent. Ethereum remained under pressure below the $ 2,000 level over the same period.
Binance Coin hit new highs with the booming introduction of BSC. Source: BNBUSD on TradingView.comBinance Coin hit new highs with the booming adoption of BSC. Source: BNBUSD on TradingView.com
Analysts now expect the BNB / USD rally to continue flying higher, with next key targets above the $ 300 level.
The role of Bitcoin in sliding the Binance coin up
Further tailwinds for Binance Coin also result from the prospect of a general crypto boom, led by the meteoric rise of Bitcoin over the past eleven months. The flagship cryptocurrency rose more than 1,200 percent from its value of $ 3,858 in mid-March, when the institutes recognized their references as a safe haven in the face of secure global economic prospects.
Firms like Tesla, MicroStrategy, Square, and Bitwise bought billions of dollars in Bitcoin to diversify their balance sheets with cash alternatives. Billionaire investors like Paul Tudor Jones and Stan Druckermiller also promoted cryptocurrency as digital gold – a hedge against a depreciating US dollar.
Bitcoin hits an all-time high. Source: BTCUSD on TradingView.comBitcoin hits an all-time high. Source: BTCUSD on TradingView.com
As the acceptance of crypto increases, the registrations for all cryptocurrency exchanges are increasing. This strengthens the acceptance of Binance Coin against the falling supply rate.
