Title: RFC: Deploy Euler to BNB Chain
Author(s): AdamBNB on behalf of BNB Chain Foundation
Related Discussions: N/A
Submission Date: 18th Jan 2023
The BNB Chain team proposes the Euler community to support the deployment of the project on BNB Chain. We believe that the goals of BNB Chain and Euler align perfectly, turning a possible collaboration into an event that could prove quite fruitful for both parties. In this proposal, we will develop the rationale by which we believe this to be true.
BNB Chain is fully supporting the Euler community and its contributors on its vibrant journey and fully understands how challenging the development of a top project might be. Keeping up with the market requires intense work from the developers, management, and the community. If we add to these challenges new collaborations, there are numerous incentives to align and puzzle pieces to fit. Therefore BNB Chain remains mindful of Euler’s development and plans, leaving open to Euler DAO and its community when a deployment on our chain would best fit their roadmap.
BNB Chain is a decentralized Layer 1 EVM compatible that uses Proof of Staked Authority (PoSA) as the consensus mechanism. At the time of writing, it has 26 active independents validators, we are looking forward to increasing (to 41 active validators) this number in the near future. In Q3 the Nakamoto coefficient of the network has increased to 8, a figure that falls within the industry median. BNB Chain is composed of the BNB Beacon Chain (previously Binance Chain) and BNB Smart Chain (previously Binance Smart Chain). BNB Chain is known for its short block time – the average block time is 3 seconds – and low fees.
BNB Chain has a wide and active DeFi Ecosystem with the second largest TVL after Ethereum. The biggest project – in terms of volume and TVL – is PancakeSwap, the DEX with the third highest TVL (~$2.3B) across chains and also has one of the highest daily volumes granting a high degree of liquidity to many supported assets. Other dexes such as BiSwap, DODO, and iZumi also play an important role in the ecosystem, enhancing the liquidity available on the chain. Venus is the most important BNB lending project with about $700M in TVL (4th biggest lending protocol). Since September, Liquid Staking has been gaining more and more traction, by delivering new use cases to the holders of BNB. Wombat is the largest stableswap protocol on BNBChain. With a TVL of more than $100M, it has been able to handle volumes of more than $400M on peak days. These are only a handful of the hundreds of Defi projects that exist on BNBChain, which is the second most active DeFi protocol after Ethereum. The trading volume of BNB DeFi Dapps is also among the highest across chains.
The greatest strength of BNB Chain is its community and user base. BNBChain is the chain with the most daily active users, the most transactions, and also the chain with the most unique active wallets. We believe that the chain’s greatest asset is this community.
- BNB Chain had 1M DAU and an average of 2.5M to 3M transactions per day during October. During Q2 of 2022, BNBChain had 427,134 unique active wallets, which accounts for 20.26% of all UAWs
- In Q3 of 2022, BNBChain was the second biggest DeFi chain with a TVL of $7.6 billion, experiencing a 28.67% increase from Q2 2022
- At the time of writing BNBChain TVL is ~$6.7 billion; the chain has not experienced significant outflows and the decrease in value locked can be mainly attributed to the sharp decline of crypto asset prices after the market events of the second week of November
- BNBChain’s TVL market share has been steadily growing since January. On May 15, the BNBChain TVL market share was 6.7%. Today it holds over 9%
- The main assets by volume are BNB, BTC, ETH, CAKE, BUSD, USDC, and USDT, which could be considered for the first batch of assets composing the initial GLP pool on BNBChain. Nevertheless, we remain open to suggestions
- BNBChain also supports a large set of wrapped or pegged tokens that could be relevant for Euler lending pools (ETH, BTC, … are within this list)
Chainlink, Pyth (through Wormhole), Binance Oracle, and The Graph fully support BNBChain. Nodereal, Ankr, InfStones, Quicknode, and Chainstack are the public RPCs and BSC Scan is the reference token tracker of the network.
BNBChain actively audits the network and its smart contracts with a robust set of security providers. Some of the audits have been performed by PeckShield, VeriChain, CertiK, and Quantstamp, and their results are publicly available. BNBChain runs several initiatives focused on security such as Avenger DAO, a community-run security infrastructure project designed to protect users on BNBChain from possible exploits, scams, and malicious actors.
The BNBChain team has been closely monitoring Euler’s development over the past few months, watching how the Euler protocol has been hitting one milestone after another. The fact that Euler has been one of the lending protocols that has experienced the best performance during this year marked by bearish sentiment has not gone unnoticed. We believe that this behavior has been similar to that of BNBChain, which has strongly established itself as the second chain in all the most relevant metrics, ending the year with a TVL market share of almost 10% across chains, having started the year at 6%. This strength has made it clear that both projects are in high demand, so we believe the time is right to collaborate more closely.
BNB is the second chain with the most TVL, at the time of writing these lines, more than $5.2B, holding a market share of more than 9%. The success of Venus proves the demand that there is in the chain for solid lending projects and the capital available in it. BNBChain is the native chain of projects such as Pancakeswap or Alpaca, with which any project deployed on the chain can generate interesting synergies. This is the background that we believe Euler’s governance must take into account when assessing this proposal.
On top of this background, we want to add some more color to our value proposition for Euler. BNBChain is completely EVM so the deployment in the chain would be easier, in addition, the BNB team remains at the disposal of Euler DAO and its contributors to make the development and deployment as smooth as possible, either with their means or by contacting them with the relevant teams of our ecosystem.
Additionally, we believe that one of the most important points is the user base of BNBChain, considerably different from that of Ethereum or its various scalability solutions. BNB is the reference chain for retail, Euler would have access to a totally different pool of users and capital that he could capture with his deployment. This user base combined with a permissionless listing protocol could generate some interesting activity. BNB would also add an extra degree of geographic diversification of both users and capital to its existing offering. Lastly, Euler could use both BNB and BUSD, two of the most demanded assets with the highest volume and liquidity in circulation.
We believe that this set of facts justifies our proposition, as well as what is the value proposition and USP of BNBChain. For our chain, the benefit of bringing in Euler is clear. Being able to offer our users one of the lending projects that has not only been consistently delivering in recent months but has also managed to solve various inefficiencies in the lending market. Euler has focused a large part of its development not only on improvements in financial design (for example, the two-sided risk-adjusted borrowing capacity) but has given great importance to the protection and security of its users, from their depositors or debtors to their customers. liquidators, implementing an innovative model of MEV-resistance liquidations. BNB users would greatly benefit from Euler. The landing of a new player of Euler’s level would also encourage competition in the ecosystem, which will bring us one step closer to the path of efficiency and increased security.
The Euler deployment on BNBChain would be a full deployment of all Euler functionalities. It is up to DAO to propose which assets would be the first to be used in the lending market. We invite Euler governance to discuss this topic on this channel.
To ensure the success of Euler on BNBChain, BNBChain could carry out a series of initiatives and promotions. These initiatives range from joint promotion (once the minimum requirements for security and other parameters are met), AMA, and joint-twitter spaces to putting the Euler Labs team in contact with ecosystem partners. Any initiative that the Euler community believes can strengthen the position of the protocol in BNB is more than welcome to be discussed in the forum.
In this proposal, we have tried to present as clearly as possible what BNBChain’s value proposition is for Euler and how we believe that a collaboration between both projects could generate a more than positive impact on both ecosystems. We have addressed the most relevant information as well as concerns that we have encountered in the past. Even so, we remain at the disposal of the governance to discuss possible issues or proposals that may appear by kicking off this discussion. We hope this is the first step in a fruitful and long collaboration.
Should this proposal pass the temperature check, we suggest voting in two ways:
Yes: deploy Euler to BNB Chain
No: make no changes