New and old crypto investors and traders are seeking Ethereum alternatives to avoid the crazily high Ethereum transaction fees. The main reason for using Defi and cryptocurrency is to achieve independence from the finance firms and centralized banks.
However, it seems that this purpose is being defeated due to the high fees associated with Ethereum transactions. Thus, making decentralized finance (Defi) untradeable for the average user. Hence, it is no surprise that users and investors are flocking to Binance and other centralized institutions. The Rekt blog even polled its audience to determine what could be the problem.
Why Did Binance Suspend Ethereum Trading On Its Platform?
Using claims of network congestion on February 19, Binance suspended withdrawals on ERC-20 and Ethereum. But most industry analysts claim that this reason was not genuine.
Inside sources claim that Changpeng Zhao, the charismatic Head of Binance and his team have shown strong brazenness in promoting an Ethereum alternative. That ETH alternative is their Binance smart chain which has continued to gain more popularity as the days go by, primarily through dApps built on the BSC-environment and criticizing Ethereum to achieve that purpose.
Increasing Ethereum gas fees has increased the popularity of the Binance system. Thus, a growing number of small Defi projects and Yield Farms are being built on the Binance smart chain.
According to Rekt’s analysis, industry analysts understand the insider tricks going on, but new traders seem only interested in making more profits without paying massive transaction fees. When Rekt interviewed Calvin Chu to seek his opinion on whether adoption of Binance smart chain and similar products will affect decentralized systems negatively, he replied:
“Over time, the market will understand the importance of a decentralized system and censorship-resistance products will become more powerful and expensive. But if crypto is truly about the pwoer of freedom to the users, then users should be given the “freemium” model so that they can understand the basics as they get their feet wet about defi and more importantly, they wont pay huge transaction fees in the process.”
Also, Lark Davis warns that if ETH 2.0 isn’t launched quickly, most ETH users will start flocking their competition.
New Users Persist with The Binance Smart Chain.
It is no longer news that newbies prefer starting with BSC and sticking with them for two main reasons. The user-interface of the platform is more straightforward than other Ethereum-based options. Also, it cheaper. As at the time of writing this, the average transaction fees stands at $30 – a record high.
These newbies are more interested in profits than centralization. This contrasts with crypto experts who are more concerned about centralization than the profits they seek to earn.
For most people, Ethereum is now a whale chain, especially now that a token swap on Uniswap is as high as $50. Crypto newbies diving into the Defi pool under Binance and other centralized corporate colossi will keep rising until the implementation of major gas-saving solutions such as EIP-1559 or layer-2. However, at this moment, Ethereum price continues to hover far below its all-time peak price.