Dappradar report: February NFT transaction volume hit a record high, BSC transaction volume surpassed Ethereum
In February 2021, Binance Smart Chain surpassed Ethereum in terms of transaction volume and the number of unique active wallets.
There is also growing interest in NFT and digital collectibles
In fact, February was an exciting month for the cryptocurrency industry: Bitcoin price reached a record high of US$58,000, Ethereum broke through the peak of US$2,000, and the DeFi ecosystem continued to lead the industry. At the same time, there is also growing interest in NFT and digital collectibles.
Problem of Ethereum’s high gas cost is still unsolved
However, the problem of Ethereum’s high gas cost is still unsolved. This matter has a greater impact on the competition between Layer-1 and Layer-2 than originally thought, and it has also led to the migration of several Ethereum DeFi projects to other projects.
Blockchains, such as Binance Smart Chain, currently have more Binance Smart Chain transactions and unique active wallets than Ethereum, but the total lock-up volume is still about four times lower than Ethereum.
It is worth mentioning that the NFT industry is becoming mainstream, among which the front runner is NBA Top Shots, and CryptoPunks and Hashmask NFT are also very popular in February.
In addition, rising stars such as Euler Beats began to stand out, and because Beeple’s Crossroad was sold for 6.6 million US dollars in the second-hand market, Art NFT began to attract people’s attention.
Highlights of the crypto industry in February
- In terms of transaction volume and the number of unique active wallets, Binance Smart Chain surpassed Ethereum, and the transaction volume exceeded US$700 billion
- 400 billion US dollars of Binance Smart Chain transaction volume comes from a DeFi DApp: Venus
- In terms of the total lock-up volume, Ethereum is still the most important blockchain, and the lock-up volume has exceeded US$400 billion.
- So far, the NFT industry has performed the best, with the top three NFT DApp transactions increasing from US$71 million to US$342 million, of which NBA Top Shot contributed 67% of the transaction volume.
Ethereum rival BSC is ranting
Due to the high gas cost of Ethereum, it provides a “window of opportunity” for other competing blockchains. Some Ethereum DeFi DApps are being transferred to other blockchains, such as:
- 1inch.exchange has recently expanded to Binance Smart Chain
- Curve Finance recently announced that it will soon be implemented on Equilibrium’s Polkadot parachain.
At the same time, Cardano implemented a hard fork in early March, and Cosmos also launched Stargate. These blockchain solutions heralded the intensification of Ethereum competition in the future.
In terms of Layer 2, Polygon (previously known as Matic Network) has launched many encrypted game projects, such as Neon District and Blockchain Cuties, which chose to “embrace” Polygon for scalability purposes.
At present, the biggest competitor of Ethereum is undoubtedly the Binance Smart Chain. The network is expanding, but the number of users is still relatively small. The decentralized exchange QuickSwap was released on Binance Smart Chain at the end of February, and the 7-day transaction volume increased by 180% to 25 million US dollars.
Overall, in February, 77 new DeFi DApps were launched on Binance Smart Chain, twice the number of Ethereum. In terms of transaction volume and the number of unique active wallets, Binance Smart Chain has become the industry’s leading blockchain.
In fact, Ethereum has always been subject to competition from other blockchains, such as Tron and EOS, but now the “dark horse” Binance Smart Chain has emerged and is changing the rules of the game.
According to DappRadar ranking data, as of the end of February, there were more than 67,000 independent active wallets on the Ethereum mainnet, a decrease of 9% compared to January, indicating a downward trend in user activity.
In contrast, Binance Smart Chain had more than 108,000 independent active wallets last February, an increase of 27%. However, Binance Smart Chain is highly centralized, with 60% of the activities on the chain coming from the top five DApps.
The following figure shows the trend of the number of independent active wallets for Ethereum, EOS, TRON, BSC, FLOW and WAX:
Source of the above image: Dappradar
The transaction volume also followed a similar pattern. Overall, the Ethereum blockchain transaction volume in February exceeded 181 billion U.S. dollars, while the Binance Smart Chain transaction volume reached 700 billion U.S. dollars, but more than half of it came from a company called ” Fius” DeFi DApp (approximately US$400 billion). The following figure shows the trend of Ethereum, EOS, TRON, BSC, FLOW and WAX transaction volume:
Ethereum still leads the way in terms of lock-up volume indicators
Although it lost its leading position in some key indicators, Ethereum did achieve an important milestone in February: the total lock-up volume exceeded the $40 billion mark.
The main reason behind the surge in this indicator is the sharp rise in the price of ETH tokens, and it also shows that Ethereum is growing strongly. On the other hand, Binance Smart Chain’s lock-up volume is also rising, but it is still far lower than Ethereum.
According to defense.io data, the current Binance Smart Chain lock-up volume is about 9.5 billion U.S. dollars, although this number is higher than that of Ethereum. The lock-up volume of the warehouse is much lower, but it has actually increased by 19 times in February.
Surprise in February! NFT transaction volume hit a record high
For NFT, February 2021 may be the “best month” with a total transaction volume of US$342 million. The top three NFT markets are:
- NBA Top Shot
The most unusual NFT sale occurred in the last week of February. In the Nifty Gateway secondary market, Crossroad, an artwork created by Beeple, was acquired for $6.6 million.
In addition, the market’s interest in artistic NFTs is rising sharply, such as:
- Art Blocks were sold out instantly.
- The audio NFT project Euler Beats was launched on February 15, and the transaction volume exceeded 10.3 million US dollars a week later.
NBA Top Shot, Hashmasks and CryptoPunks are still the most watched NFT projects. It is said that a pair of Hashmask works were sold for 420 ETH (approximately US$640,000).
In the past 30 days, the sales of Hashmasks works have always been the top Three with sales of more than 33 million U.S. dollars.
For CryptoPunks, February was also an extraordinary month, as the project created an all-time high of $79 million in sales. In addition, the minimum price of CryptoPunk has increased from US$10,000 in early February to more than US$40,000, and the current average selling price is approximately US$32,000.
OpenSea, one of the largest NFT markets on Ethereum, also had good results in February, with a significant increase in platform trading activities. The platform will support the Flow blockchain and has begun to issue exclusive digital collectibles.
NBA Top Shot is entering the market leadership trap?
The last, but very important NFT market is NBA Top Shot, whose sales exceeded $226 million in February. However, the great success of the NBA Top Shot platform has also brought me a lot of trouble.
Due to the amazing increase in user activity, many technical drawbacks and website problems need to be solved urgently.
Although most of the crypto game world is trying to figure out how to attract users, NBA Top Shot is still struggling to cope with excess demand.
Recently, due to the rapid increase in market demand, they had to postpone the release of two exclusive NFT card packs because there are more than 195,000 users in the current digital queue waiting for more than 10,000 card packs to go online.
NBA Top Shot is currently in beta, so there may be some issues. However, if the problem still exists, users will feel disappointed and even bored once they often fail to obtain a better physical examination, which may greatly affect the further growth of the platform.
When Binance Smart Chain and NFT meet
If you look at the only active wallet and transaction volume indicators, the growth of Binance Smart Chain is impressive. However, many people still have questions about the decentralization, transaction costs, and business success of the Binance Smart Chain platform.
The question now is, will Binance Smart Chain develop into a platform that promotes user growth and innovation, or will it ultimately fail to realize its potential?
Although most of the Binance Smart Chain projects are related to DeFi, some NFT projects have begun to cause considerable repercussions in the community. For example, Binance Punks (Bunks), this project is very similar to CryptoPunks on the Ethereum blockchain.
It can be said that the Binance Punks (Bunks) project has sparked a debate about the state of the Binance smart chain ecosystem, because the crypto community believes that Binance seems to “copy” the Ethereum project to a large extent. But what’s interesting is that Binance “replicated” it very successfully. For example, an “alien” Bunk (shown in the picture below, from Twitter) was sold for a high price of US$28,000.
It should be noted that Binance Punks is not an isolated case. For example, Bashmasks is also considered a “copy” of the Ethereum NFT art project Hashmasks, and Musical Beats also seems to be “copying” Euler Beats.
It has to be said that the market has become accustomed to similar forks and “copy” problems in the DeFi industry, but it remains to be seen whether these problems will be expanded in the field of NFT collectibles.
After all, such attempts show the drawbacks of open source technology.
It is not clear how to protect intellectual property rights and whether imitators will cause the original NFT to depreciate. But if you look at it from another angle, the appearance of these “replicas” also further emphasizes the importance of originality.
Why NFT collections have higher value is their originality?
Undoubtedly, a large part of the reason why NFT collections have higher value is their originality, uniqueness and scarcity. The uniqueness can be verified by the creation date and ownership history of the work recorded on the blockchain.
However, the reproduction seems unlikely to threaten the value of the original, because we have also seen many artistic reproductions in the real world. For example, there are many copies of “Mona Lisa”, but these copies did not affect the original works.
Value and market position have even further consolidated the status of “Mona Lisa” as one of the most valuable paintings in the world.
To sum up
All in all, the scalability problem of Ethereum still exists, so the importance of Layer 1 and Layer 2 solutions in the market will be further strengthened. Although Binance Smart Chain surpassed Ethereum in terms of transaction volume and the number of unique active wallets, the total amount of Ethereum locked up is still four times that of Binance Smart Chain.
The growth of Binance Smart Chain is mainly driven by a few DApps, and in the long run, it may be a fragile foundation for Binance Smart Chain.
NFT has begun to show its potential. In addition to the record sales of well-known NFT projects like CryptoPunks, some rising stars have also achieved impressive performance.
We found that some of the NFT and DeFi projects that were released on Ethereum in the past have begun to offer Binance Smart Chain migration, whether this trend will affect the original project remains to be seen.
Based on analysis, at this stage the blockchain industry is rapidly entering the next wave of growth: NFT!