The ever-increasing transaction prices on the Ethereum network is driving DeFi investors and yield farmers to cheaper alternatives. Because of this, Flamingo Finance and Binance Smart Chain volumes are surging.
Ethereum’s new all-time high of $1,700 on Feb. 4 has brought with it another spike in gas prices. This makes interacting with DeFi difficult as the average cost of making a transaction is now just shy of $20 according to BitInfoCharts.
Gas Prices Make it Difficult to DeFi
Making small transactions on Ethereum-based Layer-1 blockchains is now totally unviable and makes participating in DeFi a painful exercise for all but the whales. Developer Julian Koh noted the ridiculous prices of fees, token swaps, and smart contract operations. Koh added that this will only force users and developers to migrate to other chains.
Unsurprisingly, traders and DeFi yield farmers are among those already seeking alternatives. Ethereum rivals like Binance Smart Chain and NEO-based Flamingo Finance are seeing boosts in users and volume.
Binance’s Blockchain Booming
Binance’s Smart Chain (BSC) has gained a lot of traction recently, primarily because transactions are a fraction of the cost of the Ethereum equivalent.
According to BscScan, the number of unique addresses on the chain has just topped the one million address milestone.
The daily BEP-20 token transfer chart is also showing an all-time high of over a million while the ratio of BSC daily transactions to Ethereum transactions has maintained at 50% for a week.
All the activity has had a positive effect on the exchange’s native token also as Binance Coin hit a new all-time high of just over $53 during Thursday’s Asian trading session according to CoinGecko.
Flocking to Flamingo Finance
Binance Smart Chain isn’t the only Ethereum alternative. The once dubbed ‘Chinese Ethereum,’ NEO, is also flying in terms of volume and activity on its Flamingo Finance DeFi platform.
Since the beginning of 2021, daily trading volumes on the platform have increased steadily with over $4.2 million traded in the past 24 hours according to Flamingo analytics.
While this is a just fraction of Uniswap’s volume, which is currently over $1.1 billion, it does demonstrate the increasing demand for more cost-effective crypto transactions.
The growth has had a positive effect on Flamingo’s native FLM token which has skyrocketed in price over doubling since the beginning of the year. Currently, FLM is trading slightly below its recently-hit all-time high of $0.37.
NEO has been a bit slower on the gains, making around 14% over the past seven days to reach $24 at the time of press.