Binance Smart Chain (BSC) is an Ethereum Virtual Machine-compatible blockchain launched by Binance back in September 2020. BSC achieves ~3 second block times since it uses a Proof of Stake consensus mechanism which permits for better speeds and lower fees. In terms of technology, it doesn’t offer the huge scalability and amazing features as Cardano or Ethereum 2.0 will do, but it solves one of the biggest issues which is stopping retail users of having access to DEFI: GAS fees in BSC are around $0.20 in average at the moment of writing.
Since January, DEFI dapps in BSC started to lock a reasonable amount of value, and in a few days these have grown to levels comparable to the best of the DEFI dapps on Ethereum.
Following the ranking on Dappsradar, 2 of these apps on BSC have scaled to be between the 10 with higher total value locked (TVL) on the DEFI space. Specifically:
Venus is an algorithmic money market which also creates a synthetic stablecoin VAI, which as imagined competes directly against DAI. You can borrow VAI directly against collateral, with a list of collaterals which includes Stablecoins (DAI, USDC, USDT), BTCB, ETH, XRP, DOT, FIL, BNB… as seen some of the top coins by market cap on the space.
It also permits lending and borrowing similar to AAVE. At this moment the protocol has a TVL of $1.9billions!, and keeps growing (I’ve been following it on the last days).
They have emitted a total of 164millions VAI.
Another fork from Uniswap; it has grown at alarming pace in last weeks due to being on BSC. Swaping between several coins costs only 10 cents.
At the moment they have a TVL of $920millions and growing at alarming pace
As we can imagine, both protocols above (and others new appearing in the chain) are incentivizing with their tokens which have seen an increase in value of 10x on last month alone. Autofarm is an automated yield farming platform, similar to Yearn and Harvest but running on BSC.
With $500 million TVL and growing, it is one which could rivalize with the main one on Ethereum.
Serious competency for MakeDAO
The sole fact of having very low GAS fees makes all these apps huge rivals for their counterpart on Ethereum blockchain. BSC as explained above is EVM compatible, in fact, the experience using these apps is similar with the difference of the extremely low GAS fees (paid in BNB) and very quick transactions (~5 secs wait time).
Platforms like Harvest.finance have already started to make their move toward BSC.
Given that BSC is fully compatible with EVM, it is a question of deploying the same solidity contracts over there. I’m not sure how big of a job this could be, but we should seriously start thinking in a move like this.
I got worried TBH when I saw Venus, their VAI, and how easy and cheap is to borrow there. The liquidity in BSC is growing in the billions already, and it could continue to grow parabolic if Ethereum GAS fees continue as they are (which we know they will, since solutions are still months or even years away).
Wanted to share all this info with the community, and start a discussion on the topic, and the risks that MakerDAO could affront if we don’t move at the speed of the competency in this area. I can see many other protocols moving toward BSC as quick as possible if the flow of money continues migrating toward the Binance Smart Chain