Layer 2 scaling solutions have brought about a revolution in the space by providing faster and cheaper transactions, improved scalability, privacy, and security.
A proposal has been submitted to reduce transaction fees on Binance Smart Chain (BSC) to enhance its competitiveness against rival blockchain networks.
The proposal, submitted on March 28th, highlights the need for a more adaptive transaction cost distribution on the BSC network by implementing a more flexible transaction fee structure to ensure efficient block utilization and attract new users. This approach would help sustain the BNB economy while improving BSC’s position in the market, especially in the multichain strategy laid out in its roadmap.
The proposal notes that BSC’s high gas fees have impeded network activity and that the utilization of around 15-20% could worsen if gas fees are not checked. To keep existing and future BNB Chain L2 solutions competitive and attract users to the ecosystem, transaction costs need to be reduced.
“BSC transaction costs are currently set at a relatively high fixed rate of 5 gwei, which may not be as appealing to users as the more affordable fees provided by L2 solutions outside of the BSC ecosystem. This will ensure the existing and future BNB Chain L2 solutions remain competitive and keep attractive users in the ecosystem.”
The proposal suggests that BSC validators allow users to choose fees below the current 5 gwei rate, with options to go as low as 3 or 4 gwei, depending on their financial needs. This approach would make BSC L1 more attractive than other ecosystems’ L2 solutions and provide a competitive advantage for potential BSC L2 solutions (BSC L2 should have a target of < 0.005$/tx.”
In addition to the high transaction volume on BSC, which would serve as a strong financial incentive to participate as validators, this approach is also expected to enhance sustainability, attract new users, and optimize block utilization on the network.
Binance Smart Chain Hacks
According to its recently rolled-out roadmap, BSC’s focus in 2023 will be EVM compatibility and the mainnet launch of its new layer 2 infrastructure, zkBNB, and BNB Greenfield, a blockchain-based Web3 infrastructure. The blockchain also intends to increase its throughput from 140 million gas limit and 2,200 TPS to 300 million gas limit and 5,000 TPS.
However, despite an increase in daily transactions on BSC of almost 60% since the beginning of 2022, from 2.46 million to 3.89 million as of March 29th, BSC has suffered significant disruptions.
The network operations were temporarily halted following a $600 million hack in October, and several decentralized finance protocols housing on the network also witnessed hacks throughout the year. These included Uranium Finance, Spartan Protocol, Meerkat Finance, etc.