{"id":183970,"date":"2021-02-20T17:14:00","date_gmt":"2021-02-20T14:14:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/bnb-price-surges-as-binance-smart-chain-grows-in-popularity-with-defi\/"},"modified":"2021-02-20T17:14:00","modified_gmt":"2021-02-20T14:14:00","slug":"bnb-price-surges-as-binance-smart-chain-grows-in-popularity-with-defi","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/bnb-price-surges-as-binance-smart-chain-grows-in-popularity-with-defi\/","title":{"rendered":"# BNB price surges as Binance Smart Chain grows in popularity with DeFi"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3ee3221a1bd\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3ee3221a1bd\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/bnb-price-surges-as-binance-smart-chain-grows-in-popularity-with-defi\/#Binance_Smart_Chain_is_the_main_driver\" >Binance Smart Chain is the main driver?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/bnb-price-surges-as-binance-smart-chain-grows-in-popularity-with-defi\/#BSC_gaining_amid_high_Ethereum_fees\" >BSC gaining amid high Ethereum fees<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/bnb-price-surges-as-binance-smart-chain-grows-in-popularity-with-defi\/#Blockchain_disruption\" >Blockchain disruption<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># BNB price surges as Binance Smart Chain grows in popularity with DeFi <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-5a136f3a>Binance Coin (BNB) has\u00a0been on an absolute tear in the month of February. It traded at $48.93 on Feb. 1 and grew to trade at $304 at the time of publication, amounting to a 521% month-to-date gain and 707% year-to-date gain.<\/p>\n<p>This price rally has led BNB to become the third-largest cryptocurrency, with a $46.5 billion <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/coinmarketcap.com\/currencies\/binance-coin\/\">market capitalization<\/a>. BNB achieved its all-time high of $342.88 on Feb. 19. This price rally and leap in market capitalization could be attributed to Binance Smart Chain gaining popularity within decentralized finance markets and other macroeconomic factors driving the growth of flagship assets like Bitcoin (BTC) and Ether (ETH) to new all-time highs this week.<\/p>\n<p>While Ether price was rallying to it\u2019s all time highs on Feb. 19, Binance announced on <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Twitter<\/a> that they have \u201c temporarily suspended\u201d withdrawals of Ether and all Ethereum based tokens due to a \u201ccongestion issue.&#8221; This led to the users not able to trade these tokens for around an hour and left the community speculating what actually h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ened. This pause led BNB to rise by another $60 in that time while Ether staggered around the same range.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-02\/cea58386-5b8c-40c1-9ba2-e231c60db7bc.png\"><\/figure>\n<h2><span class=\"ez-toc-section\" id=\"Binance_Smart_Chain_is_the_main_driver\"><\/span>Binance Smart Chain is the main driver?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Apart from macroeconomic factors such as the price of BTC and ETH reaching all-time highs this week, spilling over to drive up the price of BNB, Binance Smart Chain also has been gaining significant traction among the crypto community. BSC was launched in September 2020 and acts as a parallel blockchain to Binance Chain while enabling smart contract functionality and the staking mechanism of BNB, which powers Binance Chain as its native token.<\/p>\n<p>Cointelegraph discussed this further with a spokesperson from Binance, who elaborated on the unique benefits that BSC offers users, saying:<\/p>\n<blockquote><p>\u201cBSC offers a high-performance and low-fee blockchain network that\u2019s compatible with the Ethereum Virtual Machine. Developers can worry less about transaction fees and focus more on innovating, while using all of the existing developer tooling they are familiar with in the Ethereum ecosystem.\u201d<\/p><\/blockquote>\n<p>The entire Binance ecosystem is powered by BSC. Being a global cryptocurrency exchange with extremely high user traffic, it\u2019s highly essential for scalability and low transaction fees to go hand in hand with the BSC ecosystem. BSC is now being used extensively by various DeFi protocols, with the latest to leave Ethereum for the blockchain being multiservice platform Value DeFi and yield aggregator Harvest Finance, which cited cross-chain yield farming as the prime reason for the shift.<\/p>\n<p>The influence of BSC has extended to various DeFi protocols. Venus, an algorithmic money market and synthetic stablecoin protocol designed specifically for BSC, saw the price of its Venus Token (XVS) surge over 750% after it was launched on Binance Smart Chain, from a low of $10.04 on Feb. 2 to an all-time high of $95.90 on Feb. 20.\u00a0<\/p>\n<p>Another prominent DeFi protocol on BSC is PancakeSwap, which went on to become the first billion-dollar project on the blockchain. It quickly doubled that to pass $2 billion in market capitalization, owing to the growth of its food-themed token, CAKE. Data from Cointelegraph Markets indicates that the price of the CAKE has surged 973% from a low of $1.89 on Feb. 3 to its all-time high of $20.33 on Feb. 19.<\/p>\n<p>Speaking with Cointelegraph, Ilia Maksimenka, CEO of PlasmaPay \u2014 a DeFi investment platform \u2014 indicated that PancakeSwap could be one of the main reasons for BNB\u2019s price rally:<\/p>\n<blockquote><p>\u201cPancakeSwap traded over $400 million in daily volume and briefly became the world\u2019s second-largest DEX. Its [BSC\u2019s] unique propositions of a lottery service and a non-fungible token art platform have furthered PancakeSwap\u2019s use cases.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"BSC_gaining_amid_high_Ethereum_fees\"><\/span>BSC gaining amid high Ethereum fees<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Another reason for the popularity of BSC is the lower transaction fees when compared with Ethereum, which in its state of high demand sidelines retail investors in the DeFi markets, tailoring it more for whales. While Eth2 proposes to sort the transaction fees issue through its scalability solutions, currently there is a lot of congestion on the network due to the increasing popularity of DeFi protocols, leading to high gas fees for all transactions on the Ethereum network.<\/p>\n<p>William Quigley, cryptocurrency fund manager at Magnetic Capital \u2014 a crypto-focused investment firm \u2014 told Cointelegraph that BNB\u2019s rise comes down to the congestion on the Ethereum blockchain, adding: \u201cEthereum has an Uber-like surge pricing mechanism. When demand on the chain is high, the price to quickly process a transaction goes up.\u201d<\/p>\n<p>On Feb. 18, BSC recorded 2.5 million <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/bscscan.com\/chart\/tx\">transactions<\/a> on its network, compared with 1.3 million <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ycharts.com\/indicators\/ethereum_transactions_per_day#:~:text=Ethereum%20Transactions%20Per%20Day%20is,71.46%25%20from%20one%20year%20ago\">transactions<\/a> on Ethereum. The Binance spokesperson explained to Cointelegraph why this might be the case:<\/p>\n<blockquote><p>\u201cBSC daily transaction volume is up by 300% from YTD and bolsters an ecosystem of 100+ DeFi\u00a0projects. Furthermore, the platform has succeeded in maintaining GAS costs as low as $0.04.\u00a0Compared to Ethereum\u2019s $5.53, BSC is 135 times less expensive!\u201d<\/p><\/blockquote>\n<p>While Eth2\u2019s phased launch promises speed in its proposed roadmap, history suggests that these launches often miss the deadline, with no clarity of when the actual updates will be done. Since Ethereum will take time to implement its scaling solutions, which should eventually reduce the gas fees on the network, until that point, blockchains like BSC stand to benefit the most from its delays.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-02\/04940981-9fbf-4449-9738-5680226edaa9.png\"><\/figure>\n<p>The network speed of Ethereum compared with BSC could also be one of the reasons that DeFi protocols are migrating to BSC, as it is comparatively faster. BSC allows 300 transactions per second, while Ethereum, despite its higher transaction fees, can only process 15 transactions per second.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Blockchain_disruption\"><\/span>Blockchain disruption<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Lower transaction fees and network speed might not be the only reasons that some DeFi protocols are migrating to BSC. The fact that BSC is 100% compatible with DeFi\u2019s flagship blockchain, Ethereum \u2014 which allows protocols to deploy their application on top of BSC with no additional changes \u2014 is a design victory for Binance. The Binance spokesperson further spoke on some of the other reasons:<\/p>\n<blockquote><p>\u201cFeedback we have heard is the DeFi protocols are increasingly chain agnostic. The rapid growth\u00a0of BSC shows the users prefer lower transaction fees. BSC also provides a variety of assets,\u00a0many of which are not available on DeFi protocols on Ethereum.\u201d<\/p><\/blockquote>\n<p>Although various other blockchains like Cardano and Polkadot are trying to break Ethereum\u2019s hegemony in the DeFi and NFT markets, none have quite achieved success at the rapid rate Binance Smart Chain is now witnessing. Disruptive blockchain innovation is bound to push the industry forward by challenging the status quo and pushing blockchain developers to focus on building universal, well-connected blockchains.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>DEXs becoming unusable? How to navigate record gas fees ahead of Eth2<\/em><\/strong><\/p>\n<p>Billy Adams, head of ecosystem development at XinFin \u2014 an open-source hybrid blockchain platform \u2014 told Cointelegraph that he believes blockchains like BSC are beneficial for the entire ecosystem:<\/p>\n<blockquote><p>\u201cThe market is demonstrating an appetite for emerging DeFi solutions, which can provide investor protection, sufficient liquidity for MSMEs and support interoperability between both other blockchains and legacy systems.&#8221;<\/p><\/blockquote>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/bnb-price-surges-as-binance-smart-chain-grows-in-popularity-with-defi\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# BNB price surges as Binance Smart Chain grows in popularity with DeFi &#8221; Binance Coin (BNB) has\u00a0been on an absolute tear in the month of February. It traded at $48.93 on Feb. 1 and grew to trade at $304 at the time of publication, amounting to a 521% month-to-date gain and 707% year-to-date gain&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":183971,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDIvOTYwNzE0NGYtNDgzMy00YzA5LWJiMWQtYTg1NmM2YTk5MzhlLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,75014,74894,74868],"class_list":["post-183970","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-binance","tag-blockchain","tag-defi"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/183970","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=183970"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/183970\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/183971"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=183970"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=183970"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=183970"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}