The DeFi bloodbath hit the Binance Smart Chain harder than it did Ethereum according to the data from Messari but Polygon, on the other hand, is in an upswing so let’s take a closer look at today’s altcoin news and analysis.
The DeFi market is slowing down as the entire market slumps and the DeFi bloodbath hit Binance Smart Chain harder than it did Ethereum. However, Polygon did well in Q2. Binance is having a tough few weeks as it lost many partnerships with payment processors and had to limit operations in certain countries as it got blocked by banks. If that wasn’t enough, it’s Binance Smart Chain so the race to overtake Etheruem as the main Defi blockchain with the group of experimental products providing loans interest and asset swaps without the need of banks and other intermediaries.
The DeFi world exploded in popularity a year ago and some people that jumped on the bandwagon made a lot of money. However, according to reports by Messari, things slowed down quite a bit in Q2 of 2021, and the Binance Smart chain took the biggest hit. In the Q2 2021 DeFi review, Messari wrote that “DeFi protocols saw activity decrease in the second half of the quarter as speculation in markets died down.”
Messari noted that the volume on DEXs was up from April to June and jumped from $221 billion to $405 billion. While that looks positive, the volume slumped towards the end of the quarter. The monthly DEX volume was $203.5 billion in May and in June it halved to $95 billion as per the Messari DAta. The loser of the market crash was, of course, Binance Smart Chain. That extends to Defi applications in its orbit including PancakeSwap which is a DEX built on top of the BSC that rivaled Etheruem’s Uniswap as Messari wrote:
“Combined with a series of hacks and exploits on BSC leading to hundreds of millions of dollars in losses, BSC saw speculation dry up dramatically in June leading to PancakeSwap volumes diving 69% in June.”
BSC may have been a victim of short-term thinking as Messari suggested but it notes that most investors using BSC products were using the so-called Mercenary capital for the crypto tokens that had little use outside of incentivizing user speculation. In short, bSC was being used to make some quick money. However, BSC’s loss has been Polygon’s gain as the project gained traction:
“The rise of Polygon also played a significant role in eating away Binance Smart Chain’s (BSC) share of decentralized exchange volumesAs the party shifted towar. ds Polygon, with its new set of tokens to speculate on and farms to harvest, BSC was squeezed out of the picture.”