In the DeFi race, there have been many developments including Ethereum[1]‘s domination, Cardano[2]‘s launch, Solana[3]‘s unprecedented rise, and many other appearances in this space. But the one blockchain that has been truly a competition to Ethereum’s domination is Binance[4] Smart Chain (BSC). And looking at the top projects on both the chains, it looks like BSC might be onto something bigger.
CAKE anyone?
Exactly a year ago, the market witnessed the launch of Binance Smart Chain and PancakeSwap[5]. Since then, both have together grown substantially.
Over the year BSC’s total value locked (TVL) increased by 138,407% from $12.5 million to $17.8 billion. At the same time, PancakeSwap’s TVL rose by 397,143,000% and today it represents more than a quarter of BSC’s TVL.
PancakeSwap’s TVL | Source: DeFi Llama – AMBCrypto[6]
The protocol had a 30.8% domination on the chain. In the last 30 days alone, it attracted over $2.89 million worth of users. It was now headed towards the release[7] of its first-ever very own NFT called PancakeSquad, which is going to be released on September 22.
However, while the network appeared to be in a good state, CAKE as an asset was showing some weak signs. Its low Sharpe ratio was a sign that the returns were not as great as you’d expect.
PancakeSwap Sharpe Ratio | Source: Messari – AMBCrypto[8]
But can BSC overtake Ethereum?
At the moment the only driving factor for investing in CAKE is BSC’s capability of processing transactions faster and cheaper than Ethereum and Uniswap[9]. The added lack of yield farming on Uniswap enables PancakeSwap to attract more users to it. It is because of this that
