Why DEXes Are Switching to BSC Infrastructure
September 06 2021 - 11:53AM
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Until the launch of the Binance Smart Chain in September 2020, many
decentralised exchanges relied on the Ethereum network for
transaction processing among other functionalities. This resulted
in an overburdening of the network, leading to congestion, high
transaction fees and slow transaction speed. The development of the
BSC infrastructure stemmed from the need to provide a faster
network that is far less expensive than Ethereum. The Binance team
aimed to improve the freedom of money by building a holistic
community-driven ecosystem where assets flow freely based on users’
needs. Since the creation of the BSC platform, numerous DEXES are
leveraging its advantages to provide better services to users. As
of writing, the Binance Smart Chain has nearly $27 billion locked
in the numerous applications that exist on the network and below
are the major reasons why DEXES are jumping ship to join the BSC
network. Lower Transaction Costs Transaction costs and network
operations are the major determinants that prompt exchanges, users
and developers to pivot from the Ether network and other prominent
blockchains to Binance Smart Chain. For instance, users are subject
to paying outrageous transaction fees on the Ethereum blockchain
during periods of high congestion. The transaction fees on the
Ethereum network went through the roof when DeFi coins started
making considerable progress in 2021. As a result, the adoption of
decentralised finance reduced considerably as users were trying to
avoid huge transaction costs, thereby stifling the growth of many
tokens and exchanges. The BSC infrastructure eased this friction by
allowing network users to join projects while paying gas fees that
are over 20 times lower than that of the Ethereum network. DEXES
also benefit from this feature as they incur little overhead costs
while building protocols, allowing them to focus more on
innovation. EVM Compatibility EVM stands for Ethereum Virtual
Machine and the BSC network algorithm allows full compatibility.
This means that all existing Ethereum tools, including Remix,
Metamask, Truffle and so forth can run smoothly on the platform.
With this feature in place, Ethereum developers can leverage these
tools to create dApps. Also, existing smart contracts can switch to
the BSC network without any hassles, thereby reducing the cost of
developing projects that run on multiple blockchains. This level of
flexibility puts the BSC network ahead of other blockchains,
helping it to remain a major player in the crypto ecosystem. A
Growing and Asset-Rich Ecosystem Over 139 trading pairs and 110
BEP-2 assets exist on the Binance decentralised exchange, which can
easily be integrated into the BSC infrastructure. Also, the Binance
chain connects with other prominent cryptocurrencies that run on
their individual networks, including Ripple, Bitcoin, Litecoin,
Tron, EOS and Bitcoin Cash. This feature will allow the Binance
team to grow the list of assets and DeFi protocols that exist on
the BSC platform, thereby making it easier for DEXES to list these
coins on their exchanges. It is no news that Binance Smart Chain
has witnessed significant growth since its launch. The platform is
ahead of Ethereum in terms of DeFi protocol transaction volume.
With the continuous increase in traffic within the blockchain, it
is safe to say that BSC will maintain this level of growth for the
foreseeable future. DEXES are plugging into this trend as more
investors will be drawn to BSC in the near future, which will in
turn increase their revenue. Although Binance Smart Chain
sacrificed decentralisation for usability, consistent scaling, high
network performance and lower transaction costs will always attract
investors, meaning that the platform is yet to see its best years.
High Network Performance Binance Smart Chain employs a consensus
mechanism that consists of features from Proof-of Authority and
Delegated Proof-of-Stake algorithms. This consensus mechanism runs
on a network of 21 validators, providing a high-speed platform for
protocols and exchanges to thrive on. According to recent testnet
testing, the network validators process a block of transactions
every 3 seconds while also receiving token rewards for network
participation. This incentive ensures that the network maintains
its stability and transaction speed. Conclusion Since the
development of BSC, many DEXES, users and developers have moved
from Ethereum to enjoy cheap and speedy transactions. In addition
to this, Binance Smart Chain offers a suitable launching ground for
nascent decentralised exchanges that handle smaller trades and
transactions. The adoption of the BSC infrastructure by DEXES is a
smart move as it will give them a competitive edge over their
counterparts in the industry.
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