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- Binance Smart chain growth has become sluggish
- Several exploits have hit Binance Blockchain
- The situation will improve, says Venus’ global community deputy
Binance Smart chain growth has become sluggish amid rising layer one blockchain competition. Not long ago, Binance had come up as an alternative to Ethereum and other blockchains.
Binance Blockchain has been hit by several exploits, which have led to fears about the platform’s security. Investors are worried about the safety of their funds.
For any Blockchain to be successful, it must attract cheap capital, ensure quicker transactions along with security and decentralization. Only then will the Blockchain be successful in the long run and will retain its users.
By Total Value Locked, Binance remains the number 2 blockchain, the layer one blockchain supported by crypto exchange Binance, which is far off its all-time TVL high in early May. TVL is the number of crypto assets locked in decentralized finance (DeFi) protocols on the Blockchain.
Another layer one blockchains have hit record TVL highs
Additional layer one blockchains like Solana, Terra, and Avalanche, have hit record TVL highs in the past week. Binance founder and CEO Changpen Zhao has been very vocal on social media about BSC outperforming Ethereum; a BSC spokesman told a leading Crypto magazine that Binance is not competing with other blockchains.
TVL alone is not a metric to assess the health of BSC’s DeFi ecosystem.
Samy Karim, BSC’s ecosystem coordinator, said that many factors influence TVL growth and retracements. Most importantly, it includes market conditions that are not akin to when BSC’s TVL was at its all-time high. Karim added that TVL alone is not a metric to assess the health or the performance of BSC’s DeFi ecosystem.
According to Messari, the second-quarter performance of BSC was affected by the May market crash since most of the value locked on BSC was money-oriented capital looking for liquidity mining rewards, and the majority of assets on BSC had few use cases.
Data from DeFi Llama reveals that top protocols by TVL on BSC, decentralized exchange PancakeSwap and lending protocol Venus have flattened since the TVL declined dramatically in early May.
Venus protocol was hit by more than $200 million worth of liquidation in late May. This situation could have been precipitated by the manipulation of its native Venus token. Meanwhile, PancakeSwap was taken advantage of in a flash loan exploitation worth about $45 million on another BSC-based DeFi protocol, PancakeBunny.
An increasing number of hacks on the BSC platform also haunts the platform and has scared away several potential investors. Ryan Watkins, the research analyst at Messari, has even renamed the platform Binance Rug Chain.
However, the Venus’ global community deputy, “Danny,” who did not disclose their full name, told a prominent crypto magazine that the team is working on several upgrades to improve its security. He added that the platform would return to its original growth path sooner than expected once significant changes occur.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
