BSC lockup plunges, exchange public chains in bear market may see “total collapse”

With plummeting cryptocurrency prices, tightening regulation in China and frequent hacking attacks, it seems to be the grimmest weeks for the Coin Security Smartchain.

BSC lockup plunges, exchange public chains in bear market may see "total collapse"

With a plunge in cryptocurrency prices, increased regulation in China and frequent hacking attacks, it seems to be the greyest weeks for the CoinSec smart chain. Stock users stayed in Ether, incremental users moved to Polygon, and BSC’s lock volume and Pancake trading volume all plummeted.

In a bull market, BSC will be the hottest public chain; but if a bear market comes, the loyalty of users on the BSC chain is too low. In addition, if the bear market comes, the users on the chain will care most about the principal rather than the revenue.

BSC has attracted a lot of leek users and project parties unfamiliar with defi with the ability to simply copy projects from ethereum, low gas, and the brand effect of coinan, and there are too many violent rises on BSC that have seen more violent runs and hacks. This is because the users behind BSC are mostly novice users unfamiliar with defi, and project parties who want to make quick money cutting leeks. although the number of users on BSC is huge, the speculative atmosphere among them is too heavy, and with the current gradual reduction of mining rewards for head mining projects, serious hacking, and the 521 crash, the amount of DeFi locks on BSC has experienced a precipitous drop. the main BSC The main users of BSC are from Asia, and after the 512 crash, BSC seems to be converting from an “incremental market” to a “stock market”, while existing old BSC users will move to the next new chain (e.g., polygon) due to the recent hack and the reduction of DeFi mining rewards. polygon) to mine new ones.

BSC is a “fork” project of Ether, and its innovation is very limited. In the “impossible triangle” of blockchain, BSC has improved the number of transactions processed and reduced transaction costs by abandoning “decentralization” and keeping nodes to 21. However, its success lies in the fact that Coinan can best attract new users to the market, with the idea of making quick money, and little knowledge of blockchain, caring mainly about the possibility of speculating on new coins and mining new mines with high yields on BSC, not caring about decentralization and risk control. This means that in a bull market, BSC will be the hottest public chain; but if a bear market comes, user loyalty on BSC chain is too low. With the 521 news, regulatory pressure and huge drops have had a huge impact on new users coming in, especially for BSC, whose most scenic days may be behind it.

During the bull market, the developers brought high lock-in yields to BSC by “forking” the DeFi project on ethereum, and the marketability of Coinan and the extremely low transaction costs on the chain contributed to the impressive gains and user numbers of BNB and BSC. However, if a bear market comes, on-chain users will care most about not the return, but the principal. Now it seems that the security on BSC is not enough to make the stock users confident enough: the biggest lending project and the biggest machine gun pool project on BSC both suffered serious hacking attacks this month. According to Chain Catcher, at least 14 projects were hacked this month, with a total loss of at least $250 million, ten of which were on the BSC chain. This is the most frequent and costly month in DeFi’s history, with BSC being hit hard. The worst attack occurred on BSC’s top lending project Venus, where the hack caused losses of up to $100 million, and its lockup is now down as much as 70% from its high point.

Venus Lock Volume

In addition to the losses from the current attack on BSC’s leading project, the decline in mining yields has been added to BSC’s woes. lockups on BSC’s leading mine, Pancakeswap, began to fall after its mining rewards were cut in half on May 7; the hack and regulatory news could produce a downward spiral in lockups and user numbers on BSC. Although pancakeswap briefly surpassed uniswap in terms of trading volume, it has fallen to a March low as its mining rewards have been reduced and speculative projects such as animalcoin have cooled. retail speculative sentiment and low transaction costs on BSC have led to an extremely high number of animalcoins on BSC and “ponzi coins” represented by Safemoon ” are extremely numerous, and most of these projects have plummeted after this round of declines, with safenoon down 43% in 14 days.

As the enthusiasm of Chinese leeks decreases, it is difficult for BSC to maintain its current dominance under the stock market dominated by European and American users. The lock-in volume of BSC is most affected under this plunge, while at the same time Polygon’s lock-in volume is skyrocketing, which shows that DeFi giant whales have gradually left the field from BSC and started deploying new chains.

The advantages of BSC are being absorbed by Polygon, which is able to connect directly to layer 2 projects on Ether, so original projects on Ether can be directly on the chain, which is safer and more decentralized than BSC. In addition, Boka/Kusama, which is deeply cultivated in Asian market, will also start parallel chain auction soon, and its mining revenue will inevitably be higher than BSC project yield after running, which will also surely grab the lock-in volume from the stock users of BSC.

To sum up.

  • BSC is more like a bridge from centralized finance over to decentralized finance, people will pass but not stay. In the first phase of the bull market, BSC successfully became the first public chain used by most users with the strong backing of Coinan. However, as the maturity of new users slowly increases and the mining rewards decrease, if BSC cannot continue to pull in leek users, its existing users will gradually switch to other public chains for mining, such as Polygon.
  • The biggest advantage of BSC is to pull in new users with the backing of the world’s largest centralized exchange, Coinan, but if regulation is tightened, new users from China will slowly decrease.
  • In terms of the battle for stock users, BSC looks to be losing existing users as the hotness of the Ponzi project on BSC dissipates and the recent outbreak of security issues. We are seeing a shift in liquidity to this ethereum layer 2 public chain from Polygon, whose lockup is growing rapidly.
  • As Layer 2 and ETH 2.0 progress, many developers are returning to ethereum and Polygon development, and BSC is no longer the preferred choice. However, the “giant” blood transfusion of Coinan is still a strong backing for BSC.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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