The price of Binance Coin (BNB) exploded upward over the last 30 days, going up 560% from about $40 to a new all-time high above $340 before it started correcting. Crypto analyst and trader Nicholas Merten weighed in on its rise.
On a new DataDash video, first reported on by Daily Hodl, Merten told his 390,000 YouTube subscribers about the cryptocurrencys meteoric rise over the Binance Smart Chain (BSC), an Ethereum Virtual Machine (EVM) compatible blockchain with much lower fees.
Demand for BNB has been going up as the decentralized finance (DeFi) space on the Binance Smart Chain has been gaining new users at a rapid pace, as most are trying ot escape the high fees seen on the Ethereum network.
As CryptoGlobe reported, BNB became the third-largest cryptocurrency by market capitalization, surpassing Tethers USDT stablecoin and Polkadots DOT at about the same time PancakeSwap (CAKE), a leading decentralized exchange on the BSC, saw its trading volume surge to the point it surpassed that of Uniswap, the leading decentralized exchange on Ethereum.
Analysing whether the Binance Smart Chain could overtake Ethereum and become the go-to blockchain for smart contracts and decentralized applications, Merten pointed out the similarities between ETH and BSC, noting that its easy for developers to move an application from the former to the latter. He added:
The big difference here as well is that Binance Smart Chain in this case has a few select validators. Unlike Ethereum that goes through a mining process and has the thousands of nodes across the world in a very decentralized format, Binance is a lot more centralized. Thats not inherently a terrible thing immediately
As more assets are added to the network, he said, the greater the cause for concern. Fees are, however, practically non-existent on the Binance Smart Chain, which benefits from the influence of Binance over the network.
Ethereum may survive, he added, thanks to the implementation of layer-two scaling solutions which will determine Ethereums dominance on the market when it comes to DeFi ...
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