Despite Binance Coin’s (BNB) booming performance for Q1 2021, crypto analysts are criticizing the centralization of Binance smart chain validators. Meanwhile, the market capitalization of BNB’s capitalization is now greater than that of major banks such as UBS and Banco Santander.
Analysts are getting increasingly concerned with the centralization of the Binance ecosystem.
Binance Smart Chain uses Proof of Staked Authority (PoSA) consensus mechanism where 21 active validators are chosen daily by Binance Chain. The BSC network itself is governed by just 11 validators.
“It's hard not to presume that each Binance Chain validator is in some way connected or tied to Binance. They each take turns producing blocks in a seemingly predefined order. There doesn't appear to be any stake-weighted mechanism to determine which one produces the next block.”
Previously, many analysts took towards criticizing the whitepaper for Binance’s Smart Chain’, which was published on April 17.
Even Messari has previously stated that Binance Smart Chain’ looks like another ETH competitor in an already crowded field, adding that the chain will feature an EOS-like DPoS system.
Meanwhile, the co-founder of digital asset research firm Delphi Digital, Tom Shaughnessy has argued that Smart Chain will be hampered by centralization. Shaughnessy predicted that Smart Chain’s governance will allow CZ to likely reign control over the chain given his influence and his BNB stake.
On April 9, Messari research performance report for the first quarter of 2021 found that the BNB was the best-performing crypto asset ranked among the top ten by market cap, gaining 709% since the start of the year.