Even though multiple blockchains now compete for traction in the world of decentralized finance, only a few succeed. Ethereum remains the top dog across the field, and none of its competitors come even close. A surprising turn of events, although Binance Smart Chain is making a more significant effort than other competing ecosystems. 

Ethereum Remains The DeFi King

There are different ways of determining which blockchain is more popular for decentralized finance. For example, one can look at the users, the overall number of projects, the market cap of DeFi tokens per chain, or the total value locked per project per chain. Although they will all lead to the same conclusion, every approach is valid: Ethereum is the DeFi king. It is a bit strange, given how that network is often subject to high fees and network congestion of sorts.

Going by the DeFi TVL rankings, there are 15 Ethereum-based projects in the top 10. There were no big surprises there, as developers initially built the most popular decentralized finance platforms on that blockchain. Even with higher transaction fees, they show little incline to enable Layer Two scaling solutions before ETH2.0 goes into effect. 

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That being said, some projects are eager to explore a layer such as Polygon. QuickSwap, Aave, and Iron Finance are just three examples. Aave used to run solely on Ethereum but has expanded its reach due to financial reasons and higher throughput on Polygon. Although the TVL of these three (including Aave on Polygon, not Aave on Ethereum) projects is not even $900 million individually, they remain very popular DeFi ‘franchises”.

Source: DAppRadar

Whether more projects will migrate from Ethereum to L2 solutions remains a tough question. As current gas fees on Ethereum are acceptable, there is no immediate need to make a switch. However, any DeFi project should give solutions that offer lower fees and faster transactions a fair shot. Not necessarily to replace the main chain, but to complement it. Teams can make comparisons afterward, and migration is still possible at that time.

Binance Smart Chain Makes A Dent

One blockchain successfully making a DeFi impact is Binance Smart Chain. That success needs to be put into perspective, as there are four BSC-based decentralized finance projects in the top 20 ranked by TVL. All four of them have a TVL ranging from $1.02 billion to $7.49 billion. Very impressive statistics, although none of them are currently in the top three. That situation may change soon, though.

The gap between WBTC and PancakeSwap is just $100 million in TVL. One can argue WBTC has nothing to do with DeFi as a project, even though its assets are usable across numerous platforms, protocols, and services. Therefore, there is a chance PancakeSwap will overtake WBTC in TVL soon. However, Compound is not too far behind PancakeSwap, as users can overcome the $160 million gap equally as quickly. 

DeFi rankings by TVL will always remain an intriguing way of gauging how different blockchains compare to one another. It is a bit unfortunate to see so few successful projects on competing chains. Achieving a TVL of $1 billion is challenging but far from impossible. The coming months may shake up these rankings quite a bit, which would be beneficial for everyone.