The recent rise in cryptocurrency prices has undoubtedly attracted both supporters and detractors, but the reality of this rise is a simultaneous increase in network costs due to higher transaction volumes.

Binance is guilty of targeting the Ethereum network to attract more users for its ownplatform .

The resulting volumes have clogged systems like Ethereum, where the cost of gas has risen nearly 20-fold in the past 12 months. For the growing DeFi market, these very high costs have led to strong community criticism and have mobilized the ecosystem to find cheaper options. Enter Binance, which could dethrone Ethereum as a new DeFi hotspot due to its compatibility and low transaction fees.

The Binance Smart Chain (BSC), which operates on a proof of authority (POA) model, is centralized (Binance chooses the authority that manages each node) compared to Ethereum’s fully decentralized approach. This has led some users to criticize this approach. They believe Binance is abusing its influence and market power to deliberately interfere with the Ethereum network. However, this harsh criticism does not take into account the situation as a whole.

A quick look at the portfolio and gas data shows that Binance spends the most on gas. In a Twitter image posted by Nansen AI between the 12th and 18th. In February, for example, Binance spent nearly 5,000 ETH on gas alone. While many users are quick to criticize data published by Asian exchanges known for their inflated trading volumes, this data can be confirmed by Etherscan data.

The data shows that in terms of gas consumption and transaction volume over the last seven days, portfolios attributed to Binance represent six of the ten most active portfolios in the entire Ethereum ecosystem. While one could speculate that Binance’s volume increases the value of ether, intentionally to attract more volume into its smart chain, this argument misses the chain of interaction that Binance has fostered. Furthermore, Binance did not disable Ethereum’s eavesdropping devices, making the argument that it is blocking the network somewhat questionable.

Overtaken by Unisvop

The cost to move from Ethereum to Binance is very low, especially for smart contracts and Dapps. By improving interoperability and reducing switching costs, and offering discounts to developers who bring valuable projects online, Binance has made it a great place for all kinds of activities.

Given the size ofFiFi, any reduction in fees and network charges should lead to wider acceptance. Binance is filling this gap faster than competitors or more established networks and now hosts PancakeSwap, which has surpassed Uniswap (based on Ethereum) in volume.

Since the barriers to switching from Uniswap to PancakeSwap (which is essentially a copy of Uniswap to BSC) are quite low, it’s not surprising that deFi users have made the switch. Moreover, it caused a sharp drop in the value of the Binance currency (BNB), which also made transactions more expensive in the original chain.

But unlike Ethereum, by creating a low-cost ecosystem that rewards developers of smart contracts, Binance actually encourages the development and use of smart contracts and does not necessarily use its market power to win over other competing networks.

FTX Fast Crit

But it wasn’t enough to silence critics like FTX, which accused Binance of having flawed channels to which it sent transactions. In a recent tweet of criticism, cryptocurrency derivatives exchange FTX was quick to blame Binance’s account for failing to meet its obligations to promote its own channels and causing disputes over the fees it receives in return.

The result was that it cost FTX a lot of money because the parts were shipped on the wrong lines. As a result, the service has decided to pass on the extra cost to users in the form of a 5% surcharge for tokens sent to the wrong channel. Overall, however, this argument has more to do with user error than Binance’s default settings.

While the financial universe is undoubtedly growing and the volume of exchanges testifies to the authentic truth of this reality, the self-representation of its instruments will continue to give rise to the same condemnations that have characterized decentralized rather than centralized debates about exchanges. After all, it’s the utility that speaks the most.

Do you think Binance is intentionally strangling the Ethereum network to get more users? Let us know in the comment section below.

Photo credit: Shutterstock, Pixabay, Wiki Commons, Binance, Twitter user NanshenAI, Etherscan

Related Tags:

changpeng zhao,binance login,low market cap coins on binance,5x on binance,trade bitcoin,binance futures next payment,Privacy settings,How Search works,binance futures,binance gainers,binance btcb,binance depth chart,binance futures contracts,binance calculator