BNB Chain mulls fee reduction to stay competitive with Layer 2 networks

The community behind BNB Chain, the Layer 1 blockchain founded by exchange giant Binance, is considering a proposal to make transactions cheaper to stem the flow of users to competing Layer 2 chains.

The proposal calls for BNB Chain to consider a flexible fee structure, cutting transaction costs as low as 3 or 4 gwei, down from the current standard of 5 gwei. A gwei is a small denomination of the token used as gas for EVM chains. BNB Chain is a fork of Ethereum and so it borrows this gwei notation, but the gas token for the network is the BNB token.

The proposal states that the current 5 gwei base fee may not be appealing to users because Layer 2 networks offer cheaper fees. At 5 gwei, fees on BNB average about $0.19 for token transfers. This rate is often significantly higher than fees quoted by Layer 2 networks outside the BNB Chain ecosystem.

The proposal further argues that this relatively higher transaction cost was negatively impacting the chain’s utilization. In contrast, Layer 2 networks on Ethereum have reached new all-time highs in terms of gas spending for the entire Ethereum ecosystem.

The proposal is still in the discussion stage within the community. While some members have noted the merits of the plan, there are concerns that lowering fees could increase the volume of spam transactions on the network. Others say reducing fees on the main chain would also help to make BNB Layer 2 networks offer even cheaper transaction costs. They say such efforts will help make the chain remain competitive with other networks.