Leading centralized cryptocurrency exchange Binance announced the launch of the Smart Chain (BSC) Accelerator Fund worth $100 million in total. The program will provide liquidity support to DeFi platforms on the BSC to ensure growth.
According to the exchange, the projects will have the choice to decide whether to receive the funds or not. A week or two after the announcement, Binance will gradually start providing liquidity to these platforms.
In total, the $100 million accelerator program provides a significant amount of assistance to the DeFi ecosystem on BSC. For example, Binance hosts a BUIDL Reward Plan program that rewards developers who deploy projects and contracts on the network.
Another interesting concept is the Startup seed fund, which also financially motivates developers to build on the Binance Smart Chain. In this case, the exchange announced that it would reveal which projects would benefit from the fund in the next few days.
The most important thing on the Binance Smart Chain is the BSC Foundation. Launching soon, it will support projects and upcoming developer teams with incubation, acceleration, and other kinds of support. In the blog post, the exchange added that it will continue to upgrade the BSC Accelerator fund in the future.
Binance Smart Chain and its importance for DeFi
In September, the Binance Smart Chain was officially launched and introduced 10 new projects. CEO Changpeng Zhao made the move as a reaction to the ever-growing decentralized finance (DeFi) sector.
As a reminder, the DeFi market grew from $1 billion in collateralized assets in June to $10 billion only three months later. At the time of writing, data from DeFi Pulse values the market at $11.3 billion.
Furthermore, the Binance Smart Chain acted as a necessary precaution from the centralized exchange’s side. Due to the hype, more and more users migrated to decentralized exchanges to invest in DeFi tokens. This led to liquidity disappearing from CEXs, forcing the hand of actors such as Changpeng Zhao. The CEO retaliated by creating his own DeFi space on the CEX.
The Binance Smart Chain has since its launch in September reached $220 million in collateral. The TVL is comparable to popular yield farming platforms like SushiSwap and Cream Finance.
In terms of network activity, the BSC made significant progress as well. Binance states that the Smart Chain achieved 180,000 transactions per day with 120,000 on-chain addresses. The exchange regards it as a significant accomplishment as BSC operates for less than two months.
On more than one occasion, CZ reiterated that the BSC is not a competitor to Ethereum. While BSC took a portion of Ethereum’s market share, he still believes that the two networks should work side by side.
It is important to note that the successful CEO might be playing both sides, as he may not want to anger ETH maximalists, while at the same time hedging against the booming growth of decentralized exchanges.