The price of BNB, native token of the cryptocurrency exchange Binance, doubled over the past week, and its capitalization reached $43 billion. Now BNB ranks third by market capitalization. The growth is fueled by the popularity of Binance Chain among DeFi projects.
Binance Coin overtook the stablecoin Tether in terms of market cap and is now second only to Bitcoin and Ethereum by market cap. The growth of the coin price was fueled by the statistics on transactions in the Binance Smart Chain which competes with Ethereum as a platform for decentralized financial applications.
Binance Smart Chain was launched in September 2020 as a parallel network for Binance Chain, while providing smart contract functionality and BNB betting engine. According to the DappRadar service, the PancakeSwap exchange, which is a fork of Uniswap, based on BSC, used 46,510 unique addresses in the last 24 hours. In terms of the number of active users per day, the top 10 includes two more projects based on BSC: Autofarm and BakerySwap. The growth in the number of users of the latter for the week was 155%, and most other projects on BSC showed growth of more than 60%.
“BSC offers a high-performance and low-fee blockchain network that’s compatible with the Ethereum Virtual Machine. Developers can worry less about transaction fees and focus more on innovating, while using all of the existing developer tooling they are familiar with in the Ethereum ecosystem,” BSC developers told CoinTelegraph. BSC uses the Proof of Staked Authority (PoSA) consensus mechanism based on 21 validators.
BNB traded at $48.93 on February 1, then by February 19 the price of the token reached an all-time high of $342.8. However, the fall of bitcoin pulled BNB down, and the price of the coin again dropped below $300. Nevertheless, Binance Coin market cap still outperforms USDT by nearly $10 billion.
The rise of the BNB price could also be associated with the technical difficulties faced by the Binance crypto exchange over the past weekend. On February 19, Binance announced that it is temporarily suspending the withdrawal of ETH and all ERC-20 tokens created on the Ethereum network due to network congestion. This provoked attempts to sell these coins for BNB in order to withdraw assets from exchange accounts.