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How in the World BNB is at ATH?
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How in the World BNB is at ATH?

A Research Brief by Triple Tres | June 2024

Analysis Based on  Social Sentiment, On-Chain Data, and Trusted Sources.

   

Table of Content

Executive Summary        3

Key Insights        4

Quick context:        5

BNB GREAT utility        9

Reduced trading fees on the Binance exchange;        9

Pay for fees on several popular blockchain platforms        11

Pay for goods and services for both online and in-store purchases (using Binance Pay)        11

Book hotels, flights, and more at Travala.com and Tripio;        14

Participate in token sales hosted on the Binance Launchpad;        15

Provide liquidity on Binance Liquid Swap.        15

Majority of user base located in Asia        16

Increased trading volumes on Binance        17

BNB Chain ecosystem experiences growth & adoption        19

Binance Launchpad making moves        26

Burn rates        30

Outlook on Technical status that enable the development of low cost projects        33

○ Unwavering focus on mass adoption        33

○ Multi-chain strategy        33

○ BNB Chain fusion        34

○ Highest-performance EVM platforms        34

○ BNB Chain L2s        35

○ Greenfield        35

○ Security enhancements with AvengerDAO        35

○ Foster a mass adoption ecosystem        35

Developers Data        36

Is this BNB uptrend and hype sustainable in the mid-long term?        40

Conclusion        44

Disclaimer        44

Executive Summary

This 40-page report analyzes $BNB token’s performance in Q2 2024 assessing momentum across socials, blockchain data, trusted sources and from Binance current available information as well. The main question that I will try to respond to within this document is “How in the world BNB is at ATH in Q2 2024?”

Key Insights

Quick context:

Alright, wait a moment, how in the World is BNB at ATH? What have I been missing?

 Yesterday I woke up to an explosion of tweets, posts and publications claiming and celebrating BNB and TON as well, because of both of them achieving this price discovery milestone on the same day. But let me focus on the most intriguing one to me, Binances official token: BNB. How is it that this major exchange token has greater performance than ETH for example? Is it fair to say that major Altcoin season is coming? or is this just an isolated case?

Let me dive into this.

BNB is showing incredible potential with its strong ecosystem and increasing use cases. As Binance continues to expand, BNB's utility and value grow, making it a standout in the crypto market. Mega bullish on BNB! (@whaleinbox on X Jun-6-2024)

𝗕𝗡𝗕 𝗺𝗮𝗱𝗲 𝗮 𝗻𝗲𝘄 𝗔𝗧𝗛 𝘁𝗼𝗱𝗮𝘆 🔥

From trading in the sub-$200 region about 6 months ago to making a new ATH, this has been an exceptional turnaround 🚀🚀

#BNB new ATH was primarily due to increased demand because of

▪️Launchpools

▪️BNB Chain's growing userbase, and

▪️Overall positive market sentiment.  

How many of you hold $BNB in your long-term portfolio? (@wiseadvicesumit on X Jun-5-2024)

🚨 Just In: $BNB just set its new ATH $716 in the past hour

While the whole world is focusing on BTC, ETH, SOL etc. BNB continues to break records silently 😱 (0xOliverWong31 on X Jun-4-2024)

        (0xOliverWong31 on X Jun-4-2024)

#BNB skyrockets past $700, reaching a new ATH exceeding $100 billion market cap 📈This puts it ahead of companies like UBS, Starbucks, and Dell 🏢 (@BHVenture on X Jun-5-2024)

        (@BHVenture on X Jun-5-2024)

"BNB Chain Ecosystem Heats Up as Token Hits Lifetime High..." 👀👀 (@BNBCHAIN on X Jun-5-2024)

Why am I the only one calling for $BNB ATH?? (@TomCrownCrypto on X Jun-3-2024)

$BNB is one of the 8 cryptos that actually out performed BTC since the FTX crash (of crypto that were out before FTX).  I agree it will hit ATH. I wish I had loaded up. I was hoping for a pull back but it’s been steady. Also, Binance will prop it up if anything goes south. (@CassiusCuvee on X Jun-4-2024)

Altcoins are coming back to life slowly⚡️.

BNB recently reached a new ATH for the first time since May 2021, reaching $716.

 Toncoin has reached a new ATH, soaring 10% overnight to $7.35 amid news that US brokerage Robinhood has added support for TON for users from the EU. (@oxcoIe  on X Jun-6-2024)

It may be astonishing the great performance of this token lately because it is a CEX token, right? I mean, how many things can anyone do or purchase with a CEX token? fair question to ask, but here it is a huge difference between this BNB token and others who provide fewer to none use cases for hodlers. I think I can prove that, just let me share with you a short list of probable causes of this recent BNB price action in order of importance from the most to the least:

BNB GREAT utility 

First of all we need to dive a little deeper into BNB´s multiple use cases, and break it down into smaller pieces so we can grasp the magnitude of this token/chain in terms of adoption.

BNB powers the BNB Chain ecosystem and is the native coin of the BNB Beacon Chain and BNB Smart Chain. BNB has several use cases:

Reduced trading fees on the Binance exchange;

You can save 25% on Spot and Margin trading fees and 10% on Futures trading fees. To use BNB to pay for trading fees and get a 25% discount, you must have BNB in your Spot Wallet and enable the [Using BNB Deduction] function first.
(Binance exchange)

        (Binance exchange)

Fellow Binancians, In anticipation of Binance’s fifth anniversary on 2022-07-14 and in appreciation of your continued support, Binance will extend the option for users to receive a 25% discount on trading fees when paying by BNB. The 25% discount will now be valid until further notice. 

Note: Binance reserves the right in its sole discretion to amend the BNB trading fee discount rate.

Note: This announcement was updated on 2023-06-27 to reflect changes that the 25% trading fee discount will stay valid until further notice.Binance reserves the right in its sole discretion to amend or change or cancel this announcement at any time and for any reasons without prior notice.
(Binance Anouncement)

As a Binance.US user, you can use BNB to pay for trading fees on the Binance.US platform. When you hold BNB and use BNB to pay for trading fees, you will receive a 5% discount (starting from 9/4/2023) on trading fees. (BinanceUS)

We can clearly see here that non US users of binance have greater discounts in general on trading fees up to 25%, versus Binance.US users who get only 5%, big difference here imo which could help to the adoption of BNB outside the USA, and because there is Coinbase of course.

With these discount promotions, offered by Binance they truly incentivize the usage of their platform.    



Pay for goods and services for both online and in-store purchases (using Binance Pay)

Binance Pay is a contactless, borderless and secure cryptocurrency payment technology designed by Binance. Shop with crypto at merchants or send crypto to friends and family worldwide (pay.binance)

According to Binance Pay website, these are some of the stores that use Binance Pay feature, therefore they accept BNB as long as other cryptocurrencies.

Based in Hong Kong and Shenzhen, China, we specialize in offering top-tier mining machines, including multi-brand miners, and innovative cooling solutions like Hydro-Cooling and Oil Cooling systems to ensure optimal performance.

LBH tokens can be bought, sold, and, due to their properties, allow holders to mine Bitcoin every day. Unlike traditional mining, you don't need to do anything at all for this.
Special equipment (miners) that mine Bitcoin are connected at our data centers.Their purchase, placement, and maintenance is a time-consuming process that only a handful of professionals like us can handle.
For everyone else we've created a way to mine BTC that is unique in its simplicity, allowing you to mine without having to do anything. We created crypto art with images of miners, endowing it with the properties of real equipment.
Power (TH/s) and energy efficiency (W/TH) are tied to each of our NFTs. By buying an NFT you obtain a portion of a real miner with those parameters. They are located in one of our data centers and will mine bitcoins for you every day.

The higher the power of your NFT, the more miners are connected to them, subsequently allowing you to mine more BTC.(Tokenization of BTC miners/Hashrate with daily profits maybe?)


PaaSoo seems to aim to help businesses improve their communication strategies by offering robust and scalable messaging solutions that can be easily integrated into their existing systems.

Invoice Clients: Create and send invoices without registering a business.

Receive Payments: Get paid directly into your bank account, Payoneer, or Binance account.

Quick Payouts: Enjoy fast payment processing.Legal Protection: Use fair service and non-disclosure agreements.

You can send/receive money via your STICPAY account within one minute regardless of where the sender/receiver is.

 STICPAY has pioneered the local payout using local banks.

The local payout service is currently available in over 8 countries worldwide. However, we’re actively expanding to many more markets to keep up with the demands. The countries listed below are where you can use STICPAY local payout services today.

As well as ticketing 600+ global airlines and using industry-leading technology to bring you more flight options per route, we offer 40+ of payment options so that you can pay the way you want.

From gift cards, eSIMs, games,  ASIC miners, to real estate, industrial machinery, financial advice, luxury cars, and according to ariva.world, even space travels soon, there is a huge range of goods, devices and services that we could purchase, rent or contract, paying directly with BNB and other Cryptocurrencies too, thanks to Binance Pay´s huge infrastructure and partnerships across the globe.
And speaking about travels and locations around the world, guess what is BNB used for too…

Book hotels, flights, and more at Travala.com and Tripio;

Our brand (travala.com) has a strong, established reputation within the crypto community, and our relationships with mainstream brands — including Expedia, Booking.com and Agoda — add enormous collateral value to businesses that we partner with. The product is exciting and in-demand, our business model is proven, and our active user base is well into the hundreds of thousands.

Premium partners are partners who go above and beyond a standard partnership. Premium partners generally provide extraordinary value in some manner that help us reach our goals in terms of market presence, user acquisition, revenue generation, service value-add, or any other goal that we’re currently working towards.

Binance is currently our sole premium partner. As a premium partner, Binance assists us in a number of ways that generates enormous value for Travala.com, our goals, and our customers.

For example, Binance assists us in marketing our platform to over 16 million Binance users, makes key resources available to us, and provides our payment gateway at zero cost via the Binance Pay service. (Travala web)

Breaking News】We (Tripio Team) are pleased to announce a strategic partnership with @Binance. From now on, more than 10 million users of Binance can make reservations for 450,000+ hotels worldwide using $BNB on Tripio. Thanks for the support of @cz_binance (@thetripio on X Dec-3-2018)

Huge real-world use case here imo that, C.Z. former Binance CEO, identified at the right time, took the opportunity  and leveraged this sector growth with its own Binance infrastructure and payment methods, also integrating with giants of Web2 hospitality sector like Booking.com and Expedia. Great move towards mass adoption, right? But what about BNB utility on chain?

Participate in token sales hosted on the Binance Launchpad;

Binance launchpad and launchpool, are part of a program that aims to distribute new listing tokens as reward for any user whose put some BNB on “stake” or in simple words you could lend your BNB for a period of time and then at the end of the farming stage you receive the new listed tokens and then you can unstake your BNB and hold it or just sell it.

This way BNB demand is increased every time Binance announces a new token listing on their launchpad or launchpool platform, and we think that this is one of the main reasons why BNB demand is soaring in recent weeks as investors are anticipating new/more/better project launches, but more on this later.

 Provide liquidity on Binance Liquid Swap.

With  Binance Liquid Swap  it is possible  to exchange pool tokens instantly  and  earn rewards .

In fact, Binance Liquid Swap has  low fees with tight spreads  and allows users to easily add tokens to the pool to become a market maker and earn interest and a share of transaction fees for the pool.

Swaps are especially useful for  stablecoins , in part because prices are more stable and fees are lower, especially for large transactions.

Binance Liquid Swap is based on a liquidity pool: in each pool, there are two tokens, and the relative quantity of these two tokens determines the price. Exchanges can take place as long as there are tokens in the pool.

Although it may seem complicated, it is actually quite simple, since everything  is done by Binance : users only have to contribute liquidity or exchange their tokens in the token pools.

Additionally, by providing liquidity,  Binance  pays interest and a portion of fees on transactions that take place in the pool. (CriptoInforme)

Personally I must confess that I was astonished once I have a broader view of what is Binance doing on terms of mass adoption, I mean every Crypto project aims to achieve mass adoption as well, but Binance has the resources to create a pay system robust enough to provide an advantage to many business in many markets. Therefore they adopt it. Its just needed a quick glance on their merchants list to realize that many of them are located overseas, this clue leads us to another argument.

Majority of user base located in Asia 

There is a natural language barrier and of course communication bias between East and Western world, even though Crypto in general aims to reduce that gap, inherently there is going to be some disparity in times and dates and facts and news and whatnot, where market participants (and of course the number of them), from other latitudes may affect and increase or decrease all important metrics to consider for a crypto project. BNB illustrates this particular case perfectly.

Market observers attributed the increase in BNB Chain's activity and token prices to factors including token burns, the large user base in the non-Western world and technical features that enable the development of low-cost projects. (CoinDesk on X  Jun-5-2024)

CT is an Anglosphere bubble, there's an inherent bias against things that are from the not-Japan parts of Asia.

BNB is widely used and traded in ASIAN region, who, incidentally, were the most active during the bear market.(@granite_crypto on X Jun-4-2024)

Most Western crypto players are late to the BNB game due to their bias against Binance and Asians.(@ThePulseWallet on X Jun-4-2024)

Is it true that: either u own $BNB, $ADA, or $RON, or you’re an outcast in Asia? Can my asian friends confirm? I’m still disconnected with local sentiment. (@mikee_uwu on X Jun-4-2024)

"BNB chain is perhaps the most underrated chain in all of crypto, partly due to some anti-Binance/BNB narratives being pushed in some quarters,” said a Floki developer identified only as B. “However, from a fundamentals perspective, the BNB chain is one of the best chains to build on: it is fast, scalable, and arguably the most used chain by the majority of the non-Western world.” (CoinDesk Jun-5-2024)

The Bell met with Binance Regional Market Manager Vishal Sacheendran, who visited Korea on the 29th of last month, and heard the story about the blockchain craze in the Middle East from the perspective of a local expert. He also confirmed Binance’s unwavering commitment to entering the Korean market.

General Manager Sachendran emphasized that virtual asset innovation has already begun in the Middle East. He explained, “The World Trade Center, Dubai’s commercial district, has recently been filled with virtual asset companies,” and added, “As we continue to provide benefits, the migration of virtual asset companies has progressed significantly.”

They also revealed their continued will to enter the Korean market. Binance has consistently attempted to enter the Korean market, where virtual asset trading is active. Last year, it acquired Gopax, a virtual asset exchange, but is lowering its stake in accordance with the demands of financial authorities.

He said, “Korea is a very important market,” and added, “Not only Korea but also countries in the Asia-Pacific region have weight in the virtual asset market.” He added, “Binance is working on establishing branches in important countries,” and added, “Since multiple stakeholders are involved, we will have to wait and see how communication progresses.” (the Bell korea Jun-4-2024)

Increased trading volumes on Binance

Binance exchange leads in trading volume

Binance exchange appears to be holding on to its market share even after regulatory challenges in the United States and other countries affected its operations. After a messy legal case in 2022 that ended with former Binance CEO Changpeng Zhao stepping down and the exchange being fined $4.3 billion, Binance has regained its market share in terms of trading volume. .

Data from CCData records that Binance's market share has continued to increase since October 2023, increasing for the fifth consecutive month to more than 40%.

This is corroborated by data from CoinGecko, which shows that the total 24-hour trading volume across all exchanges was $202 billion, with Binance accounting for $43.4 billion on March 20. ByBit is in second place, contributing just $8 billion, and Coinbase is in third place with $7 billion.(@daveonhollins1 on X Mar-21-2024)

In the next chart, we can see, trading volume increased since June 2023, but from mid march approximately on the same week BTC ETF was approved, since then, trading volume has been decreasing, even with BNB ATH in recent weeks.

(coingecko trading volume for Binance)

An update on this data, Coingecko shows a total 24h trading volume across all exchanges of $80.2 Billion, a -18.64% change in the last 24 hours as June-13-2024. BinanceUS and Binance at #10 and #11, on that rank, Binance “international” has $7,585,511,462 of Normalized Volume on the last 24 hours, with 75.3 Millions of monthly visits and BinanceUS has $9,068,410 of normalized volume and 1.47 M of monthly visits. Making Binance as a whole, the largest exchange on the market, at least that's what this big difference of volume and visits, suggest.            

                (Coingecko)

BNB Chain ecosystem experiences growth & adoption

BNB Chain has increased activity

According to K33 Research, just as the exchange has overcome the negative impact of the legal challenges, the exchange's BNB Chain is also "coming back on its own".

“BNB's price action has led to more on-chain activity and life is once again returning to the BNB Chain,” said David Zimmerman, DeFi analyst at K33 Research .

Independent analyst and user of BNB in ​​price discovery mode.”

“BNB TVL Soars to $6 Billion, Reaching Levels Not Seen Since June 2022.”

Data from DefiLlama shows that BNB Chain's TVL increased by 54% in 2024, demonstrating that users and developers are engaging more with the network.(@daveonhollins1 on X Mar-21-2024)

An update on this data, DefiLlama shows TVL $5.265B USD and $426,75k USD on Fees today June-13-2024

        (DefiLlama)
        

According to data from DappRadar, BNB Chain remains a powerhouse among layer 1 blockchains, processing 7.07 million transactions in the past 30 days compared to Ethereum's 1.2 million transactions.(@daveonhollins1 on X Mar-21-2024)

        (DappRadar)

As today June 13 2024 BNB still remains winning in three very important aspects versus ETH such as number of Dapps deployed on each chain, with 5353 for BSC and 4601 for ETH, signaling an increase in terms of Development, another one important aspect is Unique Active Wallets for BSC 4.16M vs 1.96M in ETH and finally 21.21M transactions on BSC vs 7.32M transactions on ETH on the last 30 days. Without a doubt ETH still reigns in terms of DeFi, but from the side of user base, transactions and Dapps. BSC wins.

(DappRadar)

Unique Active Wallet (UAW) is a metric that DappRadar uses to represent the number of individual cryptocurrency wallet addresses interacting with the blockchain's smart contracts. (@daveonhollins1 on X Mar-21-2024)

Building on the milestones from 2023 including, BSC being one of the most actively used L1 blockchains, processing 32M transactions in a day and 2K TPS, and opBNB becoming the most active layer 2 platform with an all-time high of 71M transactions/day and 4.5K TPS,

Projects across the BNB Chain ecosystem experienced a surge in activity, token prices and trading volume.

Trading volumes of BNB Chain-based tokens surged 135% in the past 24 hours, according to @CoinGecko data. (@CoinDesk on X Jun-5-2024)

According to DefiLlama´s data, trading volume and derivatives volume on BSC chain have been rising since June 2023, with prominent spikes in mid March around the date when BTC ETF was approved.


        (@pnxgrp on X Jun-5-2024)

But what is this PancakeSwap thing you may ask, because 1.9 Billion in weekly volume just on V3, are some serious words and definitely worth at least some digging.

PancakeSwap is a decentralized exchange (DEX) launched in 2020. Initially, it was mainly used for swapping BEP-20 tokens on the BNB Smart Chain (BSC) but has since expanded to other chains.

Today, PancakeSwap also supports ERC-20 and other token standards. Apart from BSC, you can use PancakeSwap on other blockchains, such as Ethereum, Polygon, Arbitrum, and more.
It’s worth noting that PancakeSwap V3 was launched in April 2023, bringing new features and product updates, including non-fungible liquidity positions, customizable price ranges, enhanced liquidity, and higher trading efficiency.

Let’s go through some of the main features of the PancakeSwap exchange:

Users can add liquidity with imbalanced token pairs, and Zap automatically rebalances them to a 50/50 split. When removing liquidity, Zap allows users to receive only one token in the trading pair, streamlining the process.

Impressive features for a common DEX whose major competitor is Uniswap, but look here on what PancakeSwap is doing about this…

Get Your Uniswap Interface Fees Refunded on PancakeSwap, up to $8M!

Match your Ethereum Uniswap volume 1:1 on Ethereum PancakeSwap, and we’ll refund ALL your interface fees paid. (@PancakeSwap on X May-16-2024)


                (@PancakeSwap on X May-16-2024)

In the dynamic world of decentralized exchanges (DEXs), recent changes in Uniswap’s fee structure have left many traders searching for alternatives. With Uniswap implementing a 0.25% interface fee, users are experiencing high transaction costs. But fear not! PancakeSwap, the leading multichain DEX, is here to offer a solution. This campaign promises lower fees, better prices, and refunds for the excess fees (interface fees) up to 8 Million USD you've paid on Uniswap. Join us in the movement to reclaim your fees and easily trade on PancakeSwap. (Blog PancakeSwap finance)

An aggressive approach you may think, but look at where these kind of decisions and marketing strategies lead to:

Don't settle for $3B when you can reach far beyond!

Our BNB Chain v3 trading volume has soared from $3.23B in May last year to an impressive $8.13B with 150k daily users last month. The sky's the limit.
(@PancakeSwap on X Jun-7-2024)


And if you think “ok, that's it, there is no way this can get any better” just wait, because they even do periodic Token Burns:

8,905,798 $CAKE just burned - that’s $23M!

💰 Trading fees (AMM V2): 109k CAKE ($285k) +16%

💰 Trading fees (AMM V3): 137k CAKE ($359k) +26%

💰 Trading fees (Non-AMM like Perpetual, Position manager etc): 0.5k CAKE ($1k) +400%

🔮 Prediction: 54k CAKE ($141k) +4%

🎟️ Lottery: 32k CAKE ($85k) +20%

🔒 NFT: 0.8k CAKE ($2k) -23%

% change from last week is in CAKE

🔥🔥🔥 Proof of burn: BSCscan (@PancakeSwap on X Jun-10-2024)

In summary for this section, we can make the case with all these data that volume is in fact increasing on Binance CEX and DEX, and because Binance is constantly promoting and incentivizing the use of BNB to pay for “less” trading fees, that's why demand for BNB naturally increases and therefore this leads to an uptrend in price action. Although there is no publicly disclosed the exact percentage of users taking advantage of these discounts by holding BNB, but surely there is more places where demand for BNB is coming as well, as we have mentioned before, let's dive on this clever launchpad/launchpool system that Binance has developed, in which demand for BNB is also involved.

Binance Launchpad making moves

There seems to be that Binance Launchpad and Launchpool, helps increase demand on BNB token as many projects in the past have proven to help BNB outperform even in bearish scenarios, and many more interesting  projects to come  are going to be listed on their platform.

After the announcement of the Arkham ($ARKM) token sale on Binance Launchpad, there have been 3 whales borrowing $BNB from @RDNTCapital

/@VenusProtocol and deposited into #Binance, totaling 16,660 $BNB ($4.03M). (@LookOnChain on X Jul-10-2023)

BNB Chain Surges: Increased Activity on Launchpad, Launchpool Fuels Growth BNB Chain is experiencing a surge, and analysts believe it's due to a rise in activity on Binance's Launchpad and Launchpool. These platforms require users to hold BNB to participate in new token offerings. Recent successful launches, like the gaming token Notcoin (NOT), are attracting investment to the BNB Chain ecosystem. (coin_CRUXX on X Jun-5-2024)

Binance is about to ignite an epic altseason.

They'll soon start listing low/mid caps.

The next 100x will come from these new, shiny coins.

In 2021: $FTM did 600x, $MATIC 200x.(@0x_gremlin on X May-31-2024)

New coins > Old coins

The next 100x's will come from newly launched projects, grabbing all the attention.

With Binance seeking low/mid cap listings, new gems will have the chance to rise quickly this bull run.

It happened with many tokens in 2021, and it will happen again this cycle.

(@0x_gremlin on X May-31-2024)

“Binance Launchpad and Launchpool are platforms that help and advise project teams on how to best issue and launch their token. We provide a full service offering starting from advisory services from before the token is even issued, to post-listing and marketing support. Our goal is to allow project teams to focus on their project development and continue building products, while we handle the marketing and exposure to our user base. We look for strong teams with a unique and innovative vision in the crypto space. If you think you are one of these projects, apply below!” (Binance Launchpad platform)


                (Binance Launchpad platform)

Top 10 Tokens and Coins launched on Binance Launchpad by Market Cap

Tokens and coins launched on #Binance Launchpad, a platform that assists blockchain and crypto startups in raising funds. (@GCryptoBen on X May-30-2024)


                (@GCryptoBen on X May-30-2024)

It is fair to say that the mere fact of launching on Binance Lauchpad creates a lot of hype on BNB chain and on the token in question as well, it is almost guaranteed a significant volume and volatility on the day or even days after the launch, which no doubt is a major milestone for many projects, because the huge number of Binance users, certainly helps to increase and stabilize the price firstly and most importantly imo, the community members for most projects launched on this platform. I mean the ones who are of any worth because:

@binance recently announced a call for small to medium-sized projects to apply for their listing programs.

This initiative aims to foster the organic and sustainable growth of blockchain projects.

For everyday users, it’s a chance to benefit from early-stage projects and potentially profit much more than on recent Binance launches. (0x_gremlin on X May-31-2024)

                (0x_gremlin on X May-31-2024)

We can see that Binance is very aware of this “low Float & high FDV” issue that crypto is facing right now, because of their own research on this,

The issue highlighted in the report is that tokens launched in 2024 have the lowest capitalization to FDV ratios seen in recent years.

This year's ratio hit a low of 12.3%, with the total number of tokens issued approaching levels seen in previous years.

This imbalance is causing selling pressure and harming the market.

According to data from Binance, most recently launched tokens have low circulating supplies. This is what leads to higher capitalization to FDV ratios.

https://x.com/0x_gremlin/status/1796618000637825474 

And presumably they are taking action to change the situation. As we've mentioned the “Binance Listing” milestone is something that many projects have printed on their mindset and roadmaps, hopefully with this focused vision by Binance Launchpad, helps increase the awareness of crypto users about how important tokenomics and vesting schedules are, but most important, this could help change the creation dynamics of new projects which involve large VC firms on their back.

Burn rates

Although BNB Burn mechanisms have changed a lot in the past few years, from being directly correlated to Binance CEX profits, burning up to 20% of the profits the platform made on a given quarter, to an Auto-Burn system whose based on BNB price and the number of block generated on BSC. The goal to reduce its total supply of 200,000,000 to practically half, remains. Plus with the introduction of BEP-95, in late 2021 a portion of gas fees generated on the Binance Smart Chain (BSC) is burned in real-time. This mechanism adds a continuous burn component based on the activity on BSC, which indirectly reflects the overall usage and performance of the Binance ecosystem.


BNB uses an Auto-Burn system to reduce its total supply to 100,000,000 BNB. The BNB Auto-Burn mechanism adjusts the amount of BNB to be burned based on BNB's price and the number of blocks generated on BNB Smart Chain (BSC) during the quarter. This offers greater transparency and predictability to the BNB community.

BNB lost in eligible cases can also be reimbursed through the BNB Pioneer Burn Program. This counts users' lost coins towards the official burn count and reimburses them with BNB.

BNB additionally uses a real-time burning mechanism based on gas fees. A fixed ratio of the gas fee collected is burned in each block, with the ratio decided by BSC validators. (bnbburn. info)


        (bnbburn. info)

To conduct a burn, the ValidatorSet Contract has a burnRatio variable. Upon finalizing each block, a validator will sign a transaction transferring its gas fees to the smart contracts. The deposit function contains burning logic that triggers the simple formula: burnRatio * gasFee. This sum will then be transferred to the burn address. The burnRatio will initially be set at 10%.

BSC Validators will be able to vote via proposals to change the burnRatio amount. This governance mechanism occurs on BNB Beacon Chain, and any community member can submit a proposal for review with a minimum deposit of 2,000 BNB. All BNB staked behind a proposal and in a vote is returned after a decision has been made. Quorum is reached at 50%, and the change will be implemented via cross-chain communication immediately. (Binance Academy BEP95)



        (BNB Circulation Supply Calculation)


 As we have seen before on this document, there is indeed and increase on activity on BSC from DEX to CEX to launchpad and spot market for trading fees, and more activity leads to even more BNB burned so we can make the case that

any method to increase the burning of BNB is destined to accelerate the reduction of supply, which based on basic supply and demand dynamics, would push the price up.. Besides BEP95, some BSC community projects like PancakeSwap, BurguerSwap, Venus Protocol, BakerySwap and Autofarm, also contribute to the reduction of BNB's circulating supply, by burning BNB into a dead account.

I´m looking forward to witnessing how these mechanisms impact price performance once Auto-Burn is halted at 100,000,000 of total supply in roughly 5-10 years, and maybe BNB at ~$1500 each? I guess we´ll see. Meanwhile let's dive into some technical stuff and let's see if  BNB Chain has the solutions needed from the side of developers.

Outlook on Technical status that enable the development of low cost projects

Here we are going to overlook the interesting and ambitious roadmap for BNB Chain, basically the “One BNB” multichain paradigm, which is aimed to focus on “FoC” Fully on Chain Dapps, enhancing decentralization and censorship resistance as well. Offering low cost, high throughput transactions and data storage in one ecosystem.

Over the past few years, Web3 applications have predominantly centered on partially on-chain models. Assets (both fungible and non-fungible tokens) and business logic governed by smart contracts are typically deployed and executed on-chain.

The blockchain technology stack must continue to prioritize and advance decentralization and censorship resistance rather than solely concentrating on business and financial returns. Web3 applications have the same issues and most of the Dapps are in the “weak or partially Web3” phase currently.

Starting from 2024, the Web3 industry is shifting its focus towards fully on-chain (FoC) Dapps. However, developers lack a comprehensive, integrated tech stack to transition their applications from a weak Web3 model to a fully on-chain Web3 framework. This gap in the market is precisely why BNB Chain has introduced the new “One BNB” multi-chain paradigm.

BNB Chain encompasses multiple chains, including BNB Smart Chain (BSC), opBNB, and Greenfield. These chains are not separated but are interconnected, providing a unified “One BNB” solution that caters to both decentralized computing and storage needs.

Unwavering focus on mass adoption

BNB Chain continues its commitment to leveling up the developer experience. BNB Chain’s goal is to develop a super-fast, cost-effective, scalable, developer-friendly, and secure multi-chain strategy for decentralized finance and the Web3 economy.

Multi-chain strategy

BSC, opBNB, and Greenfield are interconnected to provide a seamless decentralized computing and storage solution. This integration is crucial for scaling large-scale Dapps and facilitating mass adoption.

BNB Chain fusion 

The BNB Chain Fusion is a strategic shift to migrate the Beacon Chain’s functionalities to BNB Smart Chain (BSC) and retire Beacon Chain. BNB Beacon Chain will be decoded and new governance and staking and MEV PBS will be introduced to BNB Smart Chain (BSC).

Highest-performance EVM platforms

BSC and opBNB are committed to maintaining their status as [some of] the highest-performing EVM L1 and L2 blockchains. (check this chart from Chainspect) 

Enhancements like the Optimized PBSS (Path-Based-Storage-Scheme)  and Parallel EVM 3.0 will be progressively implemented across all nodes and validators.

BNB Chain L2s

On opBNB, gas limits will be increased from 100M to 200M, aiming for a throughput of 10K TPS. Leveraging the new EIP4844 and the Data Availability layer on Greenfield, we anticipate a 5-10X reduction in gas fees. Furthermore, the opBNB L2 will evolve from one L2 into ‘opBNB Connect’ to support large-scale application chains.

Greenfield

Greenfield, designed for 'hot, valuable data', facilitates direct access by opBNB/BSC smart contracts. In under three months, over 480GB of active data has been stored, particularly in infrastructure and applications for AI. In 2024, Greenfield will enhance the development experience (e.g. Greenfield executable, atomic update, paymaster (AA)) and middleware infrastructure (e.g. bundle service, data availability layer) to better meet data processing demands.

Security enhancements with AvengerDAO

2023 saw an 85% reduction in total losses due to hacking or scams compared to 2022, a significant achievement that is attributed to AvengerDAO initiatives. The new challenge lies in proactively identifying and alerting potential hacks and scams in their earliest stages.

( AvengerDAO is a proactive and community-driven initiative aimed at enhancing the security of the Binance Smart Chain ecosystem through decentralized threat detection, security audits, and partnerships with security experts.)

Foster a mass adoption ecosystem

BNB Chain is committed to building a high-performance infrastructure that supports a variety of applications through initiatives such as the 2024 Hackathon. These include high-frequency DeFi, fully on-chain gaming, AI, DePIN, DeSoc, and more. (BNB chain Roadmap)

Developers Data

Despite all these marketing-crypto savvy stuff, lets see what the numbers have to say. According to this Electric Capital Developer Report we can see some very interesting data about many Chains and ecosystems but we are going to focus on the BNB chain.

Overall developers are down 24% but losses stem mostly from Newcomer developers. Long-term committed developers continue to steadily grow.

Crypto developers have clearly shifted to multi-chain development.

Interestingly these Newcomer devs tried new ecosystems: @0xPolygonLabs,

@solana, @BNBChain, @cosmos, @arbitrum, @optimism, @NEARprotocol, @avax, @celoOrg, @dfinity, @Starknet, @FantomFDN, @zksync, @aptos_network, @filecoin

These ecosystems had 1,000+ new devs in 2023 (@MariaShen on X Jan-17-.2024)

3802 “Newcomer” Developers BNB Chain attracted on 2023. Just below Solana with 4705 New Devs on board. But ETH still leading with 17647. But, many Crypto Developers are shifting from working just on one Chain to contributing and even sharing code with other chains as well. 

Also, these Newcomers tried building towards *multiple* chains.

34% of devs in 2023 either shipped to multiple chains or built a project that targets multiple chains.

Given the evolution towards Multi-chain developers, we can look at which chains have developers in common.

Ethereum shares 6+ full-time developers with 26 chains. Many of these are EVM compatible chains.

Ethereum shares the most devs with @0xPolygonLabs, @BNBChain, @arbitrum, @optimism.


 (@MariaShen on X Jan-17-.2024)

We can also dig in to the on-chain contracts on these EVM chains to understand how much shared code there is.


                (@MariaShen on X Jan-17-.2024)

Most chains share deployers with Ethereum. Ethereum, @0xPolygonLabs, &

@BNBChain cross-polinate the most frequently.



                (@MariaShen on X Jan-17-.2024)

“BNB shares 39% of its Multi-Chain deployers with Ethereum.”

You can stare at these charts for a long time to get some cool insights, such as

@avax deployers are more likely to deploy to @BNBChain and @0xPolygonLabs and less likely to deploy to Ethereum L2s, while @Optimism and @Arbitrum deployers differ.

This raises the question - while deployers are shipping code to multiple chains, where do they *first* code?

71% of contract code is deployed first on Ethereum.

But also 19.1% is firstly deployed on BNB making it the second largest code deployer on crypto.

(@MariaShen on X Jan-17-.2024)

 We can then trace where on-chain blocks of logic go after first appearing.

We see that most of Ethereum's code is home grown & logic blocks first deployed to Ethereum account for a majority of code in other ecosystems such as @BNBChain, @Optimism, and @Arbitrum.

@BNBChain and @0xPolygonLabs are the next largest exporters of contract logic, back to Ethereum and to each other.


                (@MariaShen on X Jan-17-.2024)

Even though ETH is king on Development metrics, it is valid to say that BNB has gained a great position on this rank, because there are a large amount of people  developing more interesting Dapps in community with ETH devs. Thus my take is that the “One BNB” paradigm is coming to fruition.

Is this BNB uptrend and hype sustainable in the mid-long term?

Let's be honest, until before reading this report, most of us considered BNB as just another CEX token, but, delving into its ecosystem we can come across many pleasant surprises, such as its amazing utility as a token inside and outside its ecosystem, reaching the most unexpected corners of daily life, referring to the amazing number and variety of stores and services where you can pay with BNB; the amount of growth that we can see on recent the metrics, also one of the largest trading volumes on the market, the  enhanced demand  for BNB due to launchpad anticipation and the BSC deflationary status because of their burn mechanisms.

 But beyond that, we can realize that the vision and hard work of Former CEO C. Zhao has left the necessary foundations for this company to stand out in the market, even with the current regulations and those that are coming within the crypto world these days, even with all the FUD against this chain, criticizing its number of validators, even in the worst case scenario (for any crypto project): the arrest and imprisonment of its CEO, and guess what, he really is imprisoned, but BNB seems to be strong enough to overcome this and any other test that is put in the way.

But, is this sustainable in the mid-long term? I guess it depends on Binance future status and its size in the crypto market. Is BNB chain better than its main competitors? I guess not, in performance wise meaning TPS and TTF there are another players that outperforms BNB chain, they are just not at their best market moment yet. But for sure we may see other market participants outperforms Binace ecosystem, because BNB users have experienced such a huge run, and most of the outsized gains may already have been materialized at the recent ATH. Because if there is an important correction in the overall crypto market then BNB might not exempt from it,  but if the market continues to grow, BNB is likely to continue performing very well.

BNB ecosystem performance depends a lot on crypto market sentiment, and that means once market sentiment turns around it inevitably drags down (or up) BNB price, that is something to actually keep an eye on. Although downside risk has been historically lower than many other coins, therefore BNB would be more of a lower risk bet on this cycle which in turn could yield decent and reliable but not outsized gains.

Let's think about this and to be honest, one thing that made me worry is: BNB centralization. Because for any crypto project, just 45 validators nowadays are a difficult pill to swallow if we think about the magnitude of this immense digital asset management machinery, and the risks behind this, but let's face it, Binance Team and BNB Chain community which are separate entities, are doing something quite well here, the numbers speak for themselves, because with the ambitious roadmap proposed, a robust infrastructure behind, constantly increasing volume as well as daily active users, they are really increasing the number of validators, and this issue could be a minor to none problem to potential investors, in the future making it easier for BNB to continue in an uptrend in mid-long term.


                (Messari-Dune)

One fun fact: The US has the largest number of validators in the ETH network, 2253 or 33.7% of the total, and the majority of them (+400) are located in a single location somewhere in Ashburn Virginia, just 30 miles away from Washington, speaking of centralization…

Even when Binance Coin (now BNB Coin) was just another centralized exchange token in its infancy, first implemented on ETH, the BNB chain has come a long way and has also grown to its current size and position in the market, as it continues to offer amazing performance and outstanding metrics that increase adoption from around the world, but apparently, mostly on the Asian region of the planet. Also with their multiple Burn mechanisms and a very promising infrastructure behind it, the BNB chain is poised to capture a huge market share, as it has been doing it so well until nowadays, that, if its competitors are not up to the challenge.

I think the heart and blood of any crypto project lies within their development team, and the BNB chain has some serious growth in this matter that is worth keeping an eye on it. As we´ve seen, BNB chain was born under a centralized authority and it basically relied on one man's vision, but nowadays apparently their community has taken more control towards making BNB truly decentralized and  more independent from Binance Exchange. Which recently achieved the 200M users milestone, adding another one to the list.

Being a token (BNB) which is part of a chain that was created by the largest crypto exchange in the world, apparently has its benefits, marketing? solved, funds? solved, payment system? solved, demand sources? solved, etc. you mention it.  BNB has all the advantages backing it that paved the way to make this ecosystem what it is now, and there is no sign from them to stop growing and reaching more and more people with all their user friendly products. In my opinion and I don't want to sound like a paid ad but, the recent ATH and all the other milestones that BNB is achieving are well deserved, and that just clearly speaks about their strength in the market, despite our north american biased view on this token-exchange-company, they are doing a great job, what can we do besides ride the wave.

Conclusion

We are honestly surprised by the BNB tokens price action recently despite market conditions, but it may be  due to our western bias about Asian and Eastern adoption of this famous token. With a well bootstrapped launch with all the funds required available at will, this token that started as one man’s vision, managed to push the boundaries of what utility of a token may represent for its performance, stakeholders and regular users.

Strategic partnerships, clever deflationary mechanism, and an ambitious roadmap compose the BNB ecosystem, making it more than just a CEX token, and apparently its price action in the last few months is proof of that statement.

Hopefully the stars just keep aligning for this token and its ecosystem to keep achieving more milestones on the road. Because it seems like this BNB uptrend and hype is only sustainable with the right market conditions and with a clever management of the hype generated by its hottest features like the launchpad.

But generally speaking BNB price performance just reflects the hard work behind its design, implementation, and management, hopefully this once “one man’s vision” project could evolve into a truly decentralized version of itself breaking the inherent ties that bond this token to the biggest centralized exchange out there.  

Disclaimer

This publication is for information purposes only, and represents neither investment advice, nor an investment analysis or an invitation to buy or sell financial instruments. Specifically, the document does not serve as a substitute for individual investment or other advice. The statements contained in this publication are based on the knowledge as of the time of preparation and are subject to change at any time without further notice. The author have exercised the greatest possible care in the selection of the information sources employed, however, he do not accept any responsibility (and neither does Coinsider or RetailDAO) for the correctness, completeness or timeliness of the information, respectively the information sources, made available, as well as any liabilities or damages, irrespective of their nature, that may result there from (including consequential or indirect damages, loss of prospective profits or the accuracy of prepared forecasts.

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