Ethereum has taken another blow in the race against alternative layer 1 blockchains as the Binance Smart Chain (BSC) now handles 6 million daily transactions. The largest BSC-based decentralized exchange PancakeSwap is responsible for over 2 million transactions, which means that a single DApp now handles more transactions than the entire Ethereum blockchain.
PancakeSwap to Migrate on April 23rd
PancakeSwap will undergo a smart contract migration on Friday, April 23rd, 2021, in preparation for the release of their v2 protocol upgrade so liquidity providers will have to use the v2 platform in order to keep earning CAKE rewards.
Moreover, PancakeSwap will get a new fee structure. At the current time, there is a governance vote to decide on the new fees. So far, most voters favor the option with a 0.25% trading fee that allocates 0.17% to LP token holders and 0.03% to the treasury. Another 0.05% will be used to buy back and burn CAKE tokens or allocated to CAKE holders.
Ethereum Scaling – Where are We Now?
With gas prices of 265 GWei on average, Ethereum is going to become unviable for retail DeFi investors. For this case, there is a vibrant DeFi ecosystem on the Binance Smart Chain, but with 6 million daily transactions, BSC already begins to hit its technical limitations. For the first time, the block explorer BscScan is now asking BSC users to rise the gas fees when making MetaMask transactions up from the default setting of 5 GWei to avoid transaction delay.
For NFTs, Ethereum is still the go-to blockchain, which has contributed to the high network load on the leading smart contract platform, but this might soon change as NFT projects are targeting layer 2 solutions such as Polygon. As one of the largest virtual land projects, The Sandbox has also announced that they will be using a layer 2 platform, but have not revealed which network they will be building on yet.
The transition to a next-gen Proof of Stake (PoS) network with sharding, also known as Ethereum 2.0 will bring the definitive answer to Ethereum’s scaling problems. Ethereum has recently kicked off a project called Rayonism, which eventually seeks to merge the legacy Proof of Work blockchain with the Ethereum 2.0 network.
But not everyone agrees with these plans. Ethereum miners, who want to avoid being shut down by transition to PoS, have completed a hard fork named Ethereum GeneSys that removes all Ether that has been staked on the beacon chain, as well as the difficulty bomb that seeks to phase out mining. With this new competitor, Ethereum has to convince DApps to put in the extra effort of migrating to the 2.0 network instead of continuing on Ethereum GeneSys.
ETH Shrugs Off Correction
Ethereum may be lagging behind BSC in terms of transactions, but it has shrugged off this latest correction, gaining 5.4% on the day to trade at $2,430 at the time of writing, according to CoinGecko. Bitcoin, conversely, continues to slide, falling another 2.4% since the same time yesterday.
Despite the number of Pancakeswap transactions, CAKE and BNB are in decline over the past 24 hours, dropping 3.2% and 6.6%, respectively.