It may be the pioneer in the smart contracting but because of what it means, the space is crowding up and so is competition for clients. However, the launch of the Binance Chain and the movement of some projects to the new blockchain could be the biggest challenge for Ethereum as a platform, affecting the valuation of the second most liquid coin (ETH) in the space. Will Binance Coin (BNB) flourish as Ethereum (ETH) wither?
Binance Chain Looking More Attractive For Developers
With Binance launching its mainnet this week, project developers have the option of migrating to Binance Chain or remain loyal, continuing their development in Ethereum. Some projects may choose to stay due to what Ethereum offers in terms of liquidity (as the largest crypto exchange) and possibly a scalable network with Serenity in Ethereum 2.0.
Even so, while Ethereum has been making progress, it is slow in comparison to Binance chain. Binance CEO, Changpeng Zhao says that Binance DEX doesn’t challenge Ethereum since it doesn’t have smart contracts and it a trading platform.
Instead, the DEX seeks to counter all the fragilities present in centralized exchanges like security and control. However, there are talks that developers could ask for smart contracts deployment on the Binance DEX.
Besides smart contracting, Binance Coin (BNB) has been outperforming other assets and could double in days ahead. Note that although ETH continues to maintain its position as the second largest cryptocurrency in terms of market cap, BNB has been steadily rising and currently occupies the seventh place on the liquidity list with a market cap of $3,432 million. This is a huge achievement for an exchange-based coin, making it even more attractive for investors and exchange fans.
The launch of Binance DEX could also help boost the BNB price higher. The Binance coin would be the primary cryptocurrency on the decentralized exchange. Thanks offers laid by the exchange for users keen on using the coin for their DEX operations, increase use will naturally pump prices and therefore increase the value of the asset now that the coin would be in use by legacy Binance exchange and those desirous of security and adhering to blockchain principles.
Needless to say, intense competition from Binance Chain–plus Tron and their ambition of side-chains and irresistible offers– could have an eroding effect on price if Vitalik chose not to evolve and fast-track development.
Despite Slow Development, Ethereum Is Decentralized
The Ethereum network did implement the Constantinople upgrade earlier this year. However, progress on the blockchain continues to be slow. The big argument by some crypto enthusiasts is that Binance DEX is not a decentralized entity and it is merely using the IEO hype to repackage failed ICOs in the form of IEOs.
James Spediacci, a cryptocurrency investor, says that “Binance Chain is where shitcoins go to pump and dump one last time before they die. It’s just a lint trap for all the scams that were on Ethereum. $BNB doesn’t represent equity in Binance. It’s just being pumped by token burns and people using it to gamble on shitcoins.”
Several cryptocurrency enthusiasts maintain that the Binance DEX is centralized to a certain extent since it is in the control of Binance, despite claims that it will be a decentralized exchange.
This feature is a huge turnoff for some people as the primary objective behind cryptocurrencies is decentralization.
Even so, critics are of the view that the space would quickly spiral down as shit coins proliferate thanks to what Binance and what other exchanges have shown interest in–repackaging scam projects and giving them air-time in a supposed world’s largest crypto exchange by adjusted volumes.
Nonetheless, while there is confidence amongst the Ethereum supporters that the Binance Chain would not pose much of challenge, Murphy’s Law could dash their optimism.