In recent news, the BSC network has taken a significant step towards maintaining its market share by reducing gas fees by 40% on the BNB Chain. This decision came after the proposal was approved by BSC validators, who recognized the increased competition from low-cost Ethereum layer-2 networks as the primary reason behind the move.
Table of Contents
BSC Network Reducing Transaction Costs to Stay Competitive
The BSC network, which has been growing in popularity over the past few months, has been facing stiff competition from L2 solutions, which offer users cheaper transaction fees. The fixed rate of 5 gwei on BSC’s L1 fees may not be as attractive to users as the more affordable fees offered by L2 solutions outside the BSC ecosystem. As a result, the proposal to reduce transaction costs on the chain was put forward by the community to enhance competition. The cost of 3 gwei on BSC after this proposal is currently around $0.02, as reported by BscScan.
By implementing this proposal, BSC L1 would become more attractive to users than other ecosystems’ L2 solutions, and BSC L2 solutions would have a target of less than $0.005 per transaction. This would provide a competitive advantage for potential BSC L2 solutions and ensure that existing and future BNB Chain L2 solutions remain competitive and attractive to users.
Furthermore, the upcoming Greenfield Decentralized Data Storage System will attract new users and traffic to BSC. High transaction volume on BSC would still offer substantial value for BSC validators, maintaining a strong financial incentive to participate as validators. This approach would also help sustain the blockchain economy during low-volume periods.
Lower transaction fees would help sustain the blockchain economy and provide a strong economic incentive for new projects to migrate to BSC. By attracting new users, validators can better utilize each block’s capacity and increase their overall rewards. To maintain a targeted return on investment, validators could consider raising the commission rate they receive from the validator’s earnings.
In conclusion, the reduction of gas fees on the BNB Chain by 40% is a significant step toward maintaining the BSC network’s market share. This move will enhance sustainability, attract new users, optimize block utilization, and provide a win-win solution for the entire ecosystem.