The Sad Days With Ethereum And Uniswap Transaction Fees Are Getting Over With Binance Smart Chain And PancakeSwap.
The Sad Days With Ethereum And Uniswap Transaction Fees Are Getting Over With Binance Smart Chain And PancakeSwap.

The Sad Days With Ethereum And Uniswap Transaction Fees Are Getting Over With Binance Smart Chain And PancakeSwap.

By Godsplan | Crypto school | 25 Feb 2021


 

Hi everyone, today l’m here again to share with the whole community another Important update in the crypto market and this time particularly DeFi. DeFi is a great way to earn passive income but most of us are left behind because of the transaction fees of etherum and its leading decentralized exchange site “Uniswap”. Those of us who are into crypto for a while now might have realized the amounts people have been paying just to execute their transactions on the etherum blockchain especially using the Uniswap exchange. Last year around November a Uniswap trader regretted bitterly for mistakenly confirming a payment of about 23 ether as gas fees just to transact $120 with  Uniswap exchange. This example hasn’t been the only one, there are many other terrifying stories about Uniswap transaction fees and some people already rated them scam because of their transaction fee. But then I would like us to look at the role ethereum blockchain was integrated into DeFi protocols to perform.

 

The Intended Purpose Of Ethereum Blockchain And Its Leading Decentralized Exchange “Uniswap” In DeFi Protocols.

 

We can openly say that most decentralized applications are built on the ethereum blockchain, the world’s second largest crypto currency blockchain which has been designed with features that makes it easier to be used and build other types of decentralized applications beyond simple transactions. These more complex financial use cases were made known publicly by the founder of etherum “Vitalik Buterin” around 2013 when ethereum was lunched. Because ethereum blockchain has been designed mainly on the basis of smart contracts, transactions are automatically executed themselves if certain conditions are met and thus making things more flexible.

 

Along side with ethereum, Uniswap exchange was also built to help bring decentralization in its fullness. The project was financed through a grant of about $100,000 from the etherum foundation with the main aim of solving the problems the centralized exchange sites. Performing KYC and also depositing funds under the custody of these centralized exchanges seems more risky and Uniswap was developed to help solve some of these problems and that is the reason why you don’t need to do KYC before using Uniswap and also can use the exchange even from your ethereum wallet. Uniswap was also designed as a decentralized automated market maker (AMM) on the etherum blockchain. The platform is a decentralized exchange that does not have an order book or a token listing evaluation process and therefore can be used directly from ethereum based wallets like the metamask. . It allows anyone to trade ETH and ERC-20 tokens without having to go through know-your-customer and anti-money laundering (AML) checks, which could put it on regulators’ radars.

 

 

Even With All These Good Missions, Most Of Us Are Still Left Behind.

 

Considering all those good points l talked about, it’s clear that ethereum blockchain together with its leading decentralized exchange “Uniswap” are the real platforms for DeFi projects. However, the etherum blockchain hasn’t been friendly at all to traders because of their rising gas fees everyday especially when the network is congested. Even though this problem has been evaluated and the etherum blockchain took a step to address the problem with the introduction of etherum 2.0, the binance ecosystem quickly developed another chain parallel to the binance chain (Binance Smart Chain) to help small traders still enjoy the goodness of DeFi with low fees. Now let’s also look at the binance smart chain and its decentralized exchange platform.

 

The Binance Smart Chain And Its Decentralized Exchange “PancakeSwap”

 

Like l said earlier, the Binance Smart Chain (BSC) is a blockchain protocol from the binance ecosystem that runs in parallel with the Binance Chain. The BSC powers smart contract functionality and boasts compatibility with Ethereum Virtual Machine (EVM) and thus considered as one of the fastest blockchain for processing transactions with the lowest fee structures. This has made building DeFi Apps on the protocol so appealing for developers of the blockchain. The BSC also uses the binance coin (BNB) as its native token for the transaction fees (which is about 3% of etherum's transaction fees) like how Uniswap uses the etherum for its transaction fees.

 

 

The PancakeSwap is the largest decentralized exchange for the BSC and therefore rated as the #1 automated market maker (AMM) and yield farming platform on the Binance Smart Chain. The exchange was launched in last year September and had seen rapid adoption in this year. Users of the exchange can earn passive income by staking CAKE (the native token of the exchange) and earn rewards in CAKE. That isn’t the only way, they can also add liquidity to the lending pools and again earn CAKE as reward.

 

As at now, PancakeSwap is the main competitor of Uniswap and according to data from Coinmarketcap, the trading volume of PancakeSwap is now more than the trading volume of Uniswap and that means it’s currently the most active Decentralized Exchange.

 

Shortcomings Of The Binance Smart Chain.

 

The Binance Smart Chain has its own shortcomings and many people even complaint that it’s not fully decentralized. Because BSC is seen as partially centralized, many traders using it believes it’s for short term solutions and they are believing if the etherum blockchain manages to get the gas fees in control, they would switch back to the etherum blockchain again.

 

 

I will now use this opportunity again to conclude my article and again thank all my readers and all the members of Publish0x for supporting me to this far. I would also appreciate any advice from any member concerning my piece l just wrote so that l improve upon my writing on the next articles.

 

Thank you all for reading my piece and remember to stay safe in this era of the pandemic…

Have a nice day!!!

 


Godsplan
Godsplan

I'm a young guy who discovered crypto currency as a great ideal of making money and currently l'm here to share the little l learned.


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