Binance Smart Chain Will Save Ethereum

5 minute read

For months I’ve heard stories of CZ’s centralized clone of Ethereum and wrote it off. One of the gods of crypto recently tweeted that at least from a volume perspective, BSC was legit.

It reminded me of when the EOS NYC guys came in to a CryptoNYC lunch and did a presentation on EOS. EOS was in the process of raising the largest ICO in history (4B). I wrote it off like I did all the ETH killers. I eventually came around and became interested in Dan Larimer, his prior work, and started following the story of the EOS NYC block producer campaign. The end of the EOS story is similar to all Dan Larimer projects, but it was a worthwhile experiment despite being a massive black hole for capital. Despite EOS’s ignominious end, that experience convinced me to try and be open to new ideas, and thus my exploration of BSC. Not to mention very smart people are looking at it.

How important is Binance to Ethereum?

In this fantastic thread Calvin Chu points out that 3% of ALL gas paid on the ETH network is binance withdrawls, and that doesn’t account for Binance deposits (which should be roughly the same amount). 6% of all gas fees are paid by Binance users moving into and out of the CEX!

BSC is confusing even for a crypto native. One of the things that most intrigued me was that BSC had been designed so you can plug and play Metamask. I asked a friend to send me some BNB so I could play around with BSC. He told me he had withdrawn BNB to BSC but it never arrived so he gave up. Fail.

We put our heads together and realized that Binance has TWO dexes, Binance Chain and Binance Smart Chain. He had attempted to send BNB to BC not BSC. Further confusing things, your BSC addresses is the exact same address as your ETH Metamask. We fired up the BSC testnet and confirmed these ETH address were correct and that we could send funds between our Metamask wallets. Then he figured out how to withdraw BNB from Binance.com to BC (US users can only withdraw to BC for some reason) and then using the BC Chrome Wallet send BNB from BC to my BSC address. How many crypto natives does it take to use BSC….more than two.

How do you get to BSC island?

You have to lock your assets in the BSC bridge, managed by Binance.com. You can’t use the bridge if you…

From a discord chat I was told that there’s a 100K daily limit and 10K per transaction for stablecoins. If you can stomach all the downsides of a centralized experience completely controlled by CZ, what lies ahead is the Disney World Magic Kingdom version of Ethereum.

Using BSC after living on ETH island for my whole life is like a breath of fresh air. It’s like taking a time machine back in time to when the middle class could afford to transact on the network. It seems like all transactions cost 5 GWEI regardless of congestion. My fees for swapping/staking etc, the most common type of transactions on ETH were around .01 BNB ($3.6 at current prices). Still shockingly expensive, but these transactions costs me ~$50 each on Ethereum on the same day or 93% cheaper.

The brazeness of the copying is impressive unless you’ve ever been to China. In the discord for Nerve Finance (Curve) I asked what I could do with their new bridge that would bridge over ETH assets as a synthetic called anyETH.

Convert anyETH to ETH? They have ETH on BSC!? Oh it’s one of those “peggy assets”. Assets from just about any asset (that Binance.com supports?) can be moved over to BSC via the Binance Bridge, held in a trust bridge by CZ and minted on the BSC side as a pegged asset.

Collateral via Venus? WTF is Venus…they issue VAI

download.png

which is of course the BSC version of…DAI.

I went over to Pancakeswap (Uniswap) to get some BUSD to stake on Nerve and then swapped for some CAKE that I deposited into Bunny and Autofarm (Yearn). Transactions are 93% cheaper and they settle nearly instantly (3 sec block time) which means web UIs feel much closer to the web 2.0 interfaces we’ve come to know and love.

I put around $70 of my hard earned fiat into the BSC ecosystem and am actually able to use their DeFi ecosystem as I only paid around $15 in fees. Given the rates of return I might actually be able to show a profit as a minnow rather than a whale. ETH’s gas prices have priced out even the merely just wealthy from using the DeFi ecosystem and while systems like Yearn do help amortize the gas costs over a much larger user base, the next billion users won’t be onboarded into DeFi via ETH’s L1. With ETH L2s perpetually just a few months away, it looks like BSC is where they will play. We were promised cheap, decentralized, fast blockchains and we got Binance Smart Chain.

Updated: