Binance Coin (BNB), the native token of the Binance exchange that also powers the Binance Smart Chain, has recently reached a new peak. BSC is Ethereum’s only rival among DeFi projects at the moment, with fees that are substantially lower than ETH.
In fact, so far in 2021, BNB has been the hottest cryptocurrency. Because of Ethereum’s high gas fees and slow transaction execution, other less decentralized yet still faster and cheaper blockchains, such as Binance Smart Chain (BSC), have gained some much-needed traction.
BNB has the potential to surpass ETH.
As interest in cryptocurrency has expanded in recent months, trading volumes on crypto exchanges have increased, resulting in increased revenue from trading fees for various crypto exchanges. If the current rate of growth continues, BNB has a good chance of overtaking ETH in terms of market capitalization and replacing it as the second most valuable cryptocurrency, right behind Bitcoin.
In 2017, Binance launched its initial coin offering (ICO), with BNB trading at about $1. It was just a few months ago that the price was around $50. In a relatively short period of time, it has grown at a rate of over 1,000 percent.
BNB’s rally has been accelerating at breakneck speed, with the cryptocurrency smashing through the $400 barrier on April 6th. BNB has now exceeded 35% of Ethereum’s market share, meaning that the token would have to more than triple in value to overtake its biggest competitor.
Binance isn’t for everybody.
Binance Smart Chain has emerged as a viable Ethereum alternative in the last month, with apps like PancakeSwap challenging Uniswap, the leading DEX, due to its low fees.
Messari’s Ryan Watkins, on the other hand, recently expressed his displeasure with BSC’s centralization on Twitter. According to him, the primary explanation for BSC’s increased speed and scalability is not due to any miraculous technological innovation. Instead, he claims that the influence of centralization is to blame.
Binance has a huge reach and strength, which it has leveraged to attract new users to its ecosystem. Binance executes on a daily basis, which is why most experts believe BNB is flourishing. Still, as is always the case with cryptocurrencies, a crash may occur, so investors should proceed with caution in such a volatile setting.