Binance Smart Chain Introduces New Fee Reduction Proposal

Paigambar Mohan Raj
Source: Outlook India

Binance, the world’s largest cryptocurrency exchange by volume, is in the middle of yet another lawsuit. The CFTC (Commodity Futures Trading Commission) has sued the exchange and its founder Changpeng Zhao, “CZ,” for allegedly offering illegal derivatives services to Americans. Moreover, the suit alleged that the exchange facilitated illegal financial activity.

Although CZ has refuted the claims, Binance’s BNB token has continued to suffer. Upon announcement of the lawsuit, BNB fell 5.5%. The token is currently the largest depreciated asset in the weekly charts, among the top 10 cryptocurrency projects, down by 6.9%.

Furthermore, this is not the first time BNB has fallen, following a regulatory crackdown. The BUSD crackdown by the New York regulator in February 2023, came before a drop in the BNB price of more than 15%. After the Dutch Central Bank fined Binance $3.4 million in July 2022, BNB fell by up to 10.75%.

Nonetheless, despite the lawsuit, Binance’s balance remains high. According to Nansen, a blockchain analytics company, the exchange’s on-chain portfolio is currently worth $64 billion. Binance’s largest assets, accounting for almost 81% of its entire balance, were USDT, BTC, ETH, BUSD, and BNB. According to Nansen, BNB makes up 5% of the entire balance. To further revive BNB, one member has proposed lowering transaction fees on BNB Smart Chain.

What is the new proposal for Binance’s BNB Smart Chain?

The new proposal aims to adopt lower transaction fees on the BNB Smart Chain, to increase competitiveness.

Layer 2 (L2) solutions are gaining popularity since they have lower transaction fees for customers than BSC. Growing competitive pressure is being placed on the BSC network to maintain its market activity. The present fixed rate of 5 gwei for BSC transaction costs may not be as attractive to users as the lower prices offered by L2 alternatives outside of the BSC ecosystem.

If accepted, the proposal intends to lower transaction costs to 3 or 4 gwei, depending on needs. As per the proposal, the new model will lead to more sustainability, attract new users, and optimize block utilization. The move will allow BSC to be more competitive with popular L2 alternatives and at the same time allow the project to counter the FUD surrounding the lawsuit. At press time, BNB was trading at $313.72, up by 1.3% in the last 24 hours.

Previous Post
dogecoin doge

Dogecoin Price Prediction for the End of 2023

Next Post

Russian Banks to Start Testing Digital Ruble CBDC on Customers