DeFi on Ethereum Vs. DeFi on BSC

Decentralized Finance has transformed into a movement that is taking advantage of blockchain technology to change the entire financial landscape and making it operate without third parties. DeFi development kicked off as a use case of Ethereum blockchain but soon, Binance Smart Chain (BSC) started catching on.

Ever since BSC was launched in September 2020, it has portrayed itself as one of cheapest DeFi platforms. We will consider the pros and cons of both in this post.

Gas Fees

When Ether price reached its all time high, a single transaction on Ethereum cost users upto $100. This made Ethereum almost unusable for most users as they couldn’t afford it. Since DeFi transactions generally cost more gas, some DeFi platforms had fees of upto $300.

Many blockchain projects considered the fees to be unsustainable. Hence, they developed smart contracts for BSC where fees are between a cent to ten cents. 4RX also launched its DApp in Binance Smart Chain Mainnet first for this specific reason.

Transaction Speed

The high demand for transactions often clogs the Ethereum blockchain. Transactions get stuck on-chain for many days. Due to limitations of the Ethereum network, it can only support transaction speeds of upto 15 tps (transactions per second). Binance Smart Chain on the other hand can support upto 300 tps. Widespread adoption of ethereum has become its achilles heel.

Decentralization

Ethereum is much older than Binance Smart Chain and it uses proof of work to secure the network while BSC is a delegated proof of stake network. Most industry experts consider Ethereum to be more decentralized because there are far more active Ethereum nodes.

4RX has developed smart contract versions for Ethereum as well. It is not live yet but will be launched on the Ethereum mainnet soon.