Intro to Binance Smart Chain

Step 1: Establishing the Strength of the Layer 1 Chain

(1) Transaction Volumes Compared to Ethereum

Transaction volumes can be used as an indication of how much activity there is on a chain and therefore, as a proxy for adoption. Nansen allows us to compare the number of transactions on Ethereum to those on other chains, such as BSC:

Nansen.ai: 19/01/2022 – BSC Active Addresses

• BSC currently processes over 5x the number of transactions than Ethereum, demonstrating a large amount of activity on the network.
• However, at its peak, it processed over 10x the number of transactions, an indication that adoption is declining at a faster rate than Ethereum.
• It is worth noting that Ethereum’s total value locked is $137bn whereas BSC’s is only $14bn (source: DeFi Llama). This would suggest that the network favours individuals with lower amounts of capital.

(2) How Many Smart Money Addresses are Active on BSC?

Using Nansen we are able to consider how many addresses considered as smart money on the Ethereum network, are also active on the BSC network.

Nansen.ai: 19/01/2022 – Smart Money Segments on Binance Smart Chain

• Many of the smart money segments (defined by Nansen here) have a crossover rate of over 35%.
• In comparison Avalanche and Fantom have significantly fewer overlaps – indication that more Smart Money has been attracted to BSC than these ecosystems.

Now we have established that Binance Smart Chain has continued to display significant levels of adoption, we can explore the ecosystem itself.

Step 2: Diving Deep into Opportunities within BSC

Most Used Protocols over 7 days

Nansen.ai: 19/01/2022 – Most Used Protocols on BSC Number of Users

• PancakeSwap: This currently has the most number of users and is a decentralized exchange that allows you to trade crypto assets (including NFTs) and earn yield through farming.
• Binance: This is the creator of BSC and the largest exchange in the world. Binance allow you to withdraw and deposit directly from the BSC network.
• Bomb Crypto: This is an NFT game that has been played by almost 300,000 people in the last 7 days.

✅ Tip: Nansen’s hot contract feature allows us to find the hottest opportunities in real time by showing which smart contracts are receiving the most amount of capital.

Conclusion

There can be no doubt at the amount of opportunity within the Binance Smart Chain ecosystem. It is hugely popular for individual investors that do not have the amount of capital to be profitable on Ethereum and continues to display large levels of adoption.

Whilst the layer 1 narrative has driven the adoption of various alternate ecosystems, many failed to recapture their initial hype. Binance Smart Chain however has shown strong resilience and demonstrated that it is here to stay.