Binance Smart Chain (BSC) TVL Reaches $45 Billion, Catching Up Fast to Ethereum
Decentralized Finance (DeFi) has now reached past the mark of $100 billion in total market cap to climb to $130 billion, as per CoinGecko.
According to CoinGecko, a similar picture is seen in the total worth of assets locked up in DeFi, at $120 billion.
While Ethereum is a big part of it, the original blockchain where it all started, other blockchains are gaining traction as well.
Just as BSC-based PancakeSwap made it among the top DeFi projects, similarly, the TVL on BSC is fast approaching the levels of Ethereum, one of the metrics that BSC has been lagging in.
TVL on Ethereum had reached past $67 billion as of writing this, increasing 2.5x this year alone when it was just about $15 billion, as per DeFi Pulse. Lending protocol Maker (MKR) is leading this with $10.42 billion in TVL.
Meanwhile, as we reported, DeFi on Binance Smart Chain (BSC) has really taken off, currently at nearly $44 billion, as per Defistation. Much like every other BSC metric, TVL had also risen much faster than Ethereum, as it was just $1 billion at the beginning of February.
AMM protocol PancakeSwap zone accounts for $10 billion of this, followed by lending protocol Venus (XVS) at $9.57 billion.
Both are competing for market dominance, “whereas Ethereum has been the only widely used smart contract blockchain since inception, Binance Smart Chain can now be seen as a serious competitor,” wrote analyst Mati Greenspan in his daily newsletter.
BSC and Ethereum both have their own benefits. The original decentralized Ethereum is the most widely used blockchain whose high fees priced out small users. But ever since the Berlin hard fork, the fees have been keeping down while the developers are focused on permanently scaling the network. BSC, meanwhile, is a more centralized version that is catering to smaller users.
But “luckily, there's no need to take sides. We can profit from the growth of the market by investing in many different areas and thus drastically reduce our risk as well as maintain neutrality,” wrote Greenspan.
According to many market experts, BSC could help further the DeFi adoption and bring more users to the entire ecosystem.
More than 2 million wallets have already interacted with DeFi protocols, up from just over 170k a year back, as per Dune Analytics.
According to Crypto Fees, these DeFi protocols are earning millions of dollars in fees every single day, but they have yet to see the involvement and usage that the market has been envisioning.