The parabolic rise of the Binance Smart Chain has been ubiquitous this week, aided by some seemingly unfriendly moves by the exchange itself.
It started on Friday when Binance suddenly frozen asset withdrawals based on Ethereum for about an hour. Many interpreted it as a move against the blockchain and its ecosystem, as the stated reason was “congestion issues” – something that is hard to imagine is a problem for an exchange unless they pay the withdrawal costs for the user.
The day after, FTX began shaming Binance for over-advertising BSC on the exchange. In particular, FTX apparently spent “millions” on failed deposits that came through the smart chain but were destined for Ethereum. FTX’s allegation against Binance, one of its investors, is that the exchange has set BSC as the default option for withdrawing many ERC-20 assets, which has resulted in many failed deposits at FTX.
Can’t say I’ve ever noticed that Binance Smart Chain is “the default option” for withdrawals. BSC is the first list that comes up when you try to withdraw something like USDC even though the blockchain is not selected for you. Even so, I can see how some newbies could get scammed by this. People overestimate the degree to which terms like “ERC-20” are known in the casual crypto community. Binance is now testing the payout and forcing you to take a quiz where by selecting BSC you confirm that you know what you are doing. I have no idea when this was introduced, but it’s not impossible for it to be an answer to what FTX said.
Overall, however, there is nothing inherently wrong with one company using its products to promote another of its products. The official responses indicate that the Ethereum congestion incident will not occur again because “the systems have been updated”.
Cheap tricks could never undermine Ethereum without a fundamental weakness. And I think we’re all fed up with Ethereum’s gas fees. I recently tried a non-Ethereum DeFi product and it felt so good just paying pennies for a full interaction.
Binance Smart Chain already processes more transactions than Ethereum and has more than 5 million unique wallets. Ethereum, with its much longer history, currently has a total of 140 million wallets.
Ironically, Ethereum fans should secretly want the bull market to end now. The longer it takes, the more gas charges will remain high and the more people will migrate and want to sow other environments.
Second largest liquidation day in DeFi history
Speaking of the end of the bull market, a massive decline in crypto markets triggered liquidations of around $ 24 million on Tuesday. This was the second highest loss in DeFi’s history. It would have been the highest if it hadn’t been for that infamous day in November that Compound thought Dai was worth $ 1.3.
Nothing in particular triggered the fire sale, although I suspect rising bond yields are having an impact on Wall Street’s riskiest asset, the epitome of which is bitcoin. And then Bitcoin pulled the rest of the crypto with it.
I usually don’t talk about price because I’m not a financial advisor or even a successful trader. But I feel many fundamental and sentimental indicators of an impending correction, ranging from a volatile stock market to the strength of the dump on Tuesday.
To top it off, my non-crypto feeds are being invaded by crypto things, which is never a good sign. Either way, I hope I’m misinterpreting what unprecedented acceptance and acceptance is actually, but let’s face it – it’s all about price for now, while fundamentals are still lagging behind.
With Layer 2 platforms and new blockchains going online, Crypto and DeFi may soon offer something useful. But anything could happen before we get there. Now be extra careful and most importantly, don’t get liquidated.
