Binance Smart Chain Centralization Concerns Mount, Users Seem Undeterred
2 min read
Researchers have expressed concern about Binance Smart Chain (BSC) and its validator structure which makes it way more centralized than its rivals.
Messari researcher Wilson Withiam has delved into the BSC structure in an April 12 tweet in which he stated that it is more centralized than most platforms.
“Some might overlook the influence Binance Chain has over Binance Smart Chain’s validator set. BSC has 21 active validators, making it more centralized than most platforms.”
He added that the validator set is determined daily by Binance Chain, a network managed by just 11 validators, and posted an infographic demonstrating the relationships.
Centralized DeFi
The researcher continued to explain that BSC’s active validator set resets daily based on each validator’s voting power, consisting of staked BNB and delegations. All BNB staking and delegation takes place on Binance Chain through a staking module managed by Binance Chain validators. These in turn control all BSC validator accounts.
He added that BSC now supports several third-party validators, and several of them have close ties to Binance. Withiam concluded that user should be aware that the network is far less decentralized than its creators claim.
“For those using BSC, take the time to understand the topology of the network. Sure, the fees and speed (both UX factors) are undoubtedly preferable. But strong censorship resistance and fault tolerance are not part of the package.”
Another blockchain network with node and validator centralization issues is EOS. The EOS blockchain previously had similar issues with its block producers and an overreaching element of control over the network.
Binance users shrug it off
With ETH gas prices surging again, those new to the DeFi scene don’t seem very bothered about centralization—providing they can profit from it.
Average gas prices have been hovering around $15. However, peak costs for carrying out token swaps or smart contract operations are surging above $60.
Binance has seen strong growth and usage figures in recent months. According to the Bscan block explorer, the number of daily transactions has surged over 1,300% since the beginning of the year to hit a peak of almost five million on April 8.
The massive surge in BSC momentum and the new liquidity farms launching have also driven Binance’s native token, BNB, to new all-time highs. On April 12 BNB reached a peak price of $597—a gain of over 1,400% since the beginning of 2021.
The post Binance Smart Chain Centralization Concerns Mount, Users Seem Undeterred appeared first on BeInCrypto.
