Messari researcher slams: Binance Smart Chain validators have centralization problems

While Binance supporters are celebrating BNB’s stellar performance in the first quarter of 2021, there are growing concerns about the centralization of the Binance ecosystem.

On April 12, Messari researcher Ryan Watkins noted the centralization of Binance Smart Chain validators, saying: “Every cycle, people are fooled by the latest centralized solutions to all blockchain problems.”

“Every cycle influencers make up these narratives to ship naive retail traders at the end of the cycle.”

Messari: Avalanche's total revenue in the third quarter of 2022 fell by 94.1%, and its network value increased by only 3.3%: October 11, according to Messari's latest report "Avalanche's third quarter of 2022" data, Avalanche's network value only increased by 3.3% , while its total revenue fell by 94.1%. While the network’s integrations with platforms like Core, THOR Chain, and Boba Network have shown higher real-world usage, Avalanche’s daily transaction volume and transaction fees have dropped by 65.5% and 76.2%, respectively.

Likewise, Avalanche Rush, the Avalanche DeFi incentive program, has also been on the decline, losing roughly 27% of its TVL quarter-over-quarter (QoQ) in both USD and AVAX. In addition to DeFi, the Avalanche NFT market is also in poor condition. Its NFT sales and independent buyer addresses have dropped by more than 88% and 34% respectively. However, independent sellers have increased by 25%, according to data provided by Messari. Daily active-zce addresses averaged 38,000 per day, down from an average of 63,000 in the second quarter. [2022/10/11 10:30:36]

Binance Smart Chain (BSC) uses the Proof of Authority (PoSA) consensus algorithm, and its 21 active-zce validators are selected daily by Binance Chain, which is managed by only 11 validators. BSC validators pledge BNB.

Founder of Messari: Genesis’ $1.2 billion loss due to Three Arrows Capital may exceed DCG’s historical total net income: According to news on July 19, Messari founder Ryan Selkis said that Genesis’ loss of $1.2 billion due to Three Arrows Capital is likely to exceed DCG’s total historical net income. Digital Currency Group (DCG) historical total net income. Grayscale has total net revenue of approximately $1 billion. Messari estimates Genesis revenue of $50 million in 2020, and assuming a 5-fold increase in revenue last year and a consistent 30% margin, an additional $200 million would wipe out all net revenue from the product line.

In previous news, cryptocurrency brokerage Genesis Global Trading filed a $1.2 billion claim against the now-bankrupt Three Arrows Capital. Genesis' parent company, Digital Currency Group (DCG), has assumed some of Genesis' debts in the case, but it's unclear how much of the debt remains with Genesis. [2022/7/19 2:24:09]

Messari’s Wilson Fialiam speculates: “It’s hard not to believe that every Binance Chain validator is connected or related to Binance in some way.” blocks. There does not appear to be any staking mechanism to determine which party produces the next block."

News | Digital currency project BitConnect promoter Trevor James is suspected of breach of contract in a class action lawsuit: According to bitcoinexchangeguide, the digital currency project Bitconnect promoter Trevor James, who was previously reported as a suspected "Ponzi scheme", was hit by a collective lawsuit from the victims of the project The lawsuit, which contains a motion for breach of contract, would constitute breach of contract if Trevor James did not respond. The motion for breach of contract was recently recorded in Florida District Court. Additionally, it has been claimed that the new homes and BMW SUVs that Trevor recently showed off in his YouTube videos were purchased with money defrauded from the BitConnect program and could also be counted in the default liquidation. [2018/9/3]

Some may overlook the impact of Binance Chain on the Binance Smart Chain validator group.

BSC has 21 active-zce validators, making it more centralized than most platforms.

This validator group is determined daily by Binance Chain, which is governed by 11 validators.

— Wilson Withiam (@WilsonWithiam) April 12, 2021

Watkins attempted to address misconceptions about BSC's performance, claiming that its speed advantage over the Ethereum mainnet was a product of "centralization magic" rather than "technical innovation."

He added: “BSC is a fork of ethereum with a centralized set of validators. That’s it. That’s all.”

"If you really think that BSC has achieved the hegemony of smart contracts and will become the settlement layer of the world, then you are very wrong."

However, Watkins and others believe that BSC is nothing more than a replica of Ethereum-based DeFi Lego. Twitter user "earoshthime" refuted this claim, calling copying an inherent technological innovation.

"When it comes to invention and innovation, copying is a feature, not a bug," they said. "Plagiarism is a sign that something is worth exploring, but if one feature is different, it will be better." “Mkt92z” also responded in defense of BSC, saying Ethereum’s recent high fees and scaling woes have driven users away for other protocols.

Ethereum needs to hurry up and fix scaling issues that are driving ridiculously high fees. These fees take too much money out of people's pockets. At some point, people care more about their money than DeFi.

— Maurice K Taylor (@MKT92Z) April 12, 2021

Messari’s first-quarter 2021 performance report published on April 9 found that BNB was the best performer among the top 10 cryptoassets by market capitalization, up 709% since the beginning of the year. The market capitalization of BNB has now surpassed that of UBS and Santander.

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