Recently we have seen an explosion in the Binance smart chain's popularity. Below I will be comparing the top statistics of BSC and ETH to see how viable of a threat Binance has created to Ethereum.
The Stats...
Daily Transactions and Average Gas Price
Some of the most indicative stats of a networks usage is its daily transactions, this gives us a sense of how much use the network is getting from users and the protocols built on top of it.
Binance
In February BSC daily transactions have skyrocketed to over 2 million transactions per day and peaking over 3 million in one day as seen in this chart on BSC Scan. It is now sitting around 2.2 million daily transactions with around 30 transactions per second. Keep in mind not all of these transactions are transactions between users, many are smart contracts running multiple backend transactions but this number still gives a good idea of the massive growth this month.
The average gas fees on BSC are around 20 gwei and dropping, more recently around 15 gwei which is under one cent USD. As you can see the fees are significantly cheaper than ETH which is one of the major selling points of the chain since Ethereum fees have been so ridiculously high lately.
Ethereum
Ethereum actually has less daily transactions than the BSC. It is seeing around 1.2 million daily transactions, just above half of the Binance chains current daily transactions. This is surprising since Ethereum is still the larger protocol but it could be indicative of users being reluctant to use Ethereum frequently since the costs are so prohibitively high.
Ethereum's average gas price has been between 200 gwei and 120 gwei over the past month. About 10x the fees of the BSC. This provides context for the large disparity in the daily transactions of each network, it seems users are more likely to frequently transact on BSC due to its incredibly minor fees compared to ETH.
Unique Addresses
The amount of unique addresses of each network shows how many users have adopted the protocol and are holding value on it. Once again this stat is far from perfect, but does give us a good rough idea of how popular each chain is.
As you can see the BSC has exploded in distinct addresses in February. Rocketing from around 1 million unique addresses to well over 50 million now. This could be another sign of users leaving ETH to do their transactions on the far cheaper Binance Smart Chain.
Ethereum unsurprisingly still has almost triple BSC's unique addresses. Ethereum is still by far the more popular platform, however if BSC continues its hockey-stick growth over the next few months its not impossible that it surpasses Ethereum in this stat as well, making it the winning platform in every category.
Can Binance overtake Ethereum?
Binance has been rapidly growing and taking market share from ETH, especially over the past month. The most obvious driver of this is the incredibly high gas fees on ETH which have been going on so long its almost a trope of the DeFi world. Now that there is a mainstream solution to these prohibitive fees it seems we are seeing something of a migration away from ETH to a platform users can actually transact frequently on without spending hundreds of dollars a month.
The biggest threat I see to Binance is the communities concerns about its centralization. This is Decentralized Finance after all and many users are weary of centralized companies creating their own protocols and taking market share. There is already somewhat of an uproar in the crypto community about the BSC and its centralized nature. While ETH may be able to solve its high fee problem one day, likely with ETH 2.0 and proof of stake once it is fully implemented, it is unlikely Binance will ever be seen as truly decentralized.
Binance beats Ethereum in nearly every way when it comes to the fees and usability, however it will be hard to attract the hardcore DeFi members who stay away from anything centralized. For this reason it is also unlikely the Binance Smart Chain will have as many DeFi protocols built on it as developers are mindful of centralization as well and would prefer not to build on a platform that is centralized if there is a comparable decentralized option. Ethereum also still has the most DeFi protocols and the most popular of them as well. While some Binance chain alternatives like Pancakeswap have been gaining in popularity, it still seems unlikely they can beat out the most popular ETH protocols like Uniswap in the long run.
In summary, I believe that BSC has added great value to the crypto world by providing a mainstream mainnet with low transaction fees. That is the primary driver in its growth, however due to its centralized nature it is likely that once a viable decentralized network solves the transaction fee problem and gains mainstream popularity it will overtake BSC quite quickly as users flock to the option that avoids centralization the most.
BSC may be winning currently, but it feels like a bandaid fix for the ridiculous transaction fees on ETH, not something the community will want to use for years and years to come simply due to its tendency to centralization.
I hope you enjoyed this comparison of two of the most hotly debated chains of 2021. I am excited to see how this competition plays out as the year progresses. Let me know what you think of each chain and who you think will come out on top of 2021!
Thank you for reading this post, I learned a lot in creating this comparison and I hope you did too. Feel free to follow me on Hive or Publish0x for more DeFi and Crypto content.
Resources:
https://bscscan.com/
https://etherscan.io/
