Recently, Binance has been under attack from both sides. On the one hand, the US regulators are pressing forward, and on the other hand, the crypto community has erupted in controversy over Binance's listing standards and returns. In addition to expressing dissatisfaction with the rate of return, they have also questioned the new standards. The entanglement with US regulators is bound to be another protracted legal battle, and the outside world generally believes that it will not end until the two sides reach a settlement.
Standing at the center of the public opinion storm, as the former "bull market perpetual motion machine", does the Binance ecosystem have the ability to withstand the blow? Can Binance's value capture still bring surprises? Is the "traffic effect" of this leading crypto company still there? PANews tried to find out from the data.
Market share and on-chain ecology are recovering rapidly
Compared with the sluggish market of mainstream coins, BRC 20, Meme, etc. have grabbed the market spotlight with their myths of getting rich by thousands of times and tens of thousands of times in the past period of time. The active CEX (centralized exchange) traffic of these concept coins is divided by DEX and Bitcoin trading market. The Block data shows that at the end of May this year, the ratio of DEX to CEX spot trading volume exceeded 21% for the first time. The trading volume of CEX was once at the lowest level in history this year, and has now dropped sharply to 13.9%.
However, behind the seemingly prosperous scenes of these popular concept coins is a large amount of survivor bias. In addition to a small number of "smart money" that successfully bet, more investors face risks such as insider trading, being buried in the market, and project running away. Cases of successful high profits are more likely to be spread by the community. In fact, the popularity of these altcoins is continuing to decline, market funds are also beginning to flee, and the market heat has returned to CEX.
The Block data shows that as of June 7, Binance's market share of monthly trading volume peaked at 62.01% in February 2023, and then began to decline to 48.58% in March and April, which was the time when Meme and BRC 20 were popular. However, after April, Binance's market share of trading volume began to rebound significantly to the current 52.9%.
Not only that, the BNB Chain ecosystem has also begun to recover. According to the Q1 market performance of 15 L1 public chains counted by Messari, BNB Chain's first quarter financial revenue and market value annual and quarterly cumulative change percentages ranked second on the list, second only to Ethereum. At the same time, BNB and ETH are the only deflationary tokens in the first quarter.
The BNB Chain browser data shows that BNB Chain transactions have become increasingly active in recent months. As of June 8, the total number of transactions on BNB Chain has rebounded to 4.064 million, up 80.2% from the beginning of the year. At the same time, in terms of the number of addresses, more than 110 million have been added since 2023, an increase of about 47.8%.
In addition, BNB Chain's daily gas fee consumption has also continued to grow, up 53.1% from the beginning of the year, which indirectly confirms that its ecosystem is active. Recently, Binance has also launched a new Gas Grant program, which will provide $200,000 in gas fee incentives to qualified projects every month, which may attract more projects to join.
It is worth mentioning that in April this year, the BNB Chain development team launched the decentralized storage infrastructure BNB Greenfield and has launched the test network "Congo", and will launch the main network in Q3 this year. As the data and storage layer of the BNB Chain ecosystem, the launch of BNB Greenfield will further stimulate the growth and prosperity of the BNB Chain ecosystem. In addition, BNB Chain is expected to upgrade to the "Luban" hard fork (BEP-126, BEP-174 and BEP-221) on June 12, which will create a faster and more secure network for users. The optimization of user experience means that it will feed back to the BNB Chain ecosystem.
Of course, the most direct relationship with ordinary users is whether the assets listed on Binance can really bring value. "BRC 20, Meme and other various prices have risen wildly, but all kinds of value coins have been ignored." In the crypto bear market, altcoins with returns of dozens of times are sought after by funds, which also makes many "classic players" who believe in value investment anxious for a time. The main reason behind the "retail investor revolution" is that assets are greatly discounted in the bear market environment, and investors are in urgent need of more stable and lucrative returns.
Low-priced coins are more likely to capture high gains
For players like Meme, the main motivation for participation is to use small funds to get high multiples. In addition to high-net-worth or institutional users, small and medium-sized investors are also the main participants in the market, which makes low-priced coins a sector they love, and the data also confirms this.
Judging from the 11 projects (including two IEOs) launched on Binance in 2023, projects with lower issue prices have achieved relatively higher increases, such as ID and EDU. This also shows to a certain extent that projects with low unit prices have stronger appeal and are more likely to be popular with investors.
Of course, overall, these new projects have shown good market returns. From the first-day closing increase, the average increase of these projects reached 383.9%, among which EDU, SUI and ARB performed best; from the historical highest rate of return, the average increase was as high as 823.4%, especially ID and EDU, which increased by 41 times and 32.8 times respectively, and 83.3% of the project yields led Bitcoin in the same period; from the time required for the highest profit, users can get the highest return by holding for an average of 17 days, and projects that set new highs within a few days accounted for 58.3% of the total.
From this point of view, compared with high-risk assets such as Meme, Binance not only acts as a "gatekeeper" for high-quality investment targets, but also generally brings considerable returns to users. Although no similar 100x effect projects have appeared since GMT in December 2022, the yield of Binance's listed projects is also quite impressive under the sluggish bear market, and tends to provide users with more stable returns.
"The underlying logic of listing coins on Binance is to try to list projects that can survive for a long time and bring returns to users. This is actually the difference in investment research capabilities and aesthetic differences. The platform that can identify suitable coin listing projects and timings in the long run will have users who can survive longer. This is the core competitiveness of the platform. (For) Launchpad projects, the price we give to users is the lowest we can negotiate, so users who grab IEOs basically make money. But the price in the secondary market is not under our control. As for who buys cheap chips and who sells them too early, Binance does not control it, but the project party must unlock them according to the public announcement, and Binance will also supervise." Binance co-founder He Yi recently said in the community.
The bear market still has tens of times the return
Looking back at Binance's past performance in the new market, with its excellent marketing and liquidity of the top trading platform, Binance's "currency listing effect" has been obvious to all, whether it is empowering the project party or the return on investment for users. So, in the current bear market environment, we will look at the return rate of Launchpad projects and BNB held over the years to see whether Binance's currency listing effect is still there.
According to PANews statistics (priced in USDT), Binance Launchpad has launched 17 projects so far, most of which have achieved a return rate of dozens of times. From the perspective of holding costs, there are relatively more projects with low prices and high gains, including TKO, C 98, BETA, GMT and ID, which are more likely to be "loved" by most investors; and from the perspective of the first-day closing increase, the average increase of the 17 projects reached 1458.2%, among which EDU, ID, HOOK, LAZIO, BETA and TKO performed best; the average of the highest historical profit was as high as 5186.7%, and the three projects of GMT, BETA and C 98 had the highest return rate, especially GMT, with a maximum return rate of 416.8 times; from the perspective of the highest profit time, the average holding time for users to obtain the highest profit was 34 days, of which 52.9% of the projects reached new highs within a few days. But from the perspective of rate of return, projects with a longer holding period have relatively higher returns.
According to the annual division, from the first-day yield, the number of new projects launched by Binance in 2021 and 2022 is quite different, but the average yield is basically the same, both exceeding 1371%. Although only two IEO projects were launched in 2023, the average increase was in the lead, reaching 2092%. In addition, from the perspective of the highest historical increase, the average return in 2022 far exceeded the other two years, exceeding 153.5 times, mainly due to the 100-fold project GMT, followed by 3690% in 2023, and the time cost required was relatively low. The number of new projects launched on Binance Launchpad is also in line with the market's popularity. In the bear market, although new projects emerge in an endless stream, there are still few high-quality projects, and the frequency of new projects has also been significantly reduced. There is no need to make up the number for the sake of new projects.
In addition, according to the Binance Launchpad participation requirements, the user's investment amount is determined based on the average holding of BNB, so what is the market return of BNB? According to the data, BNB increased by more than 11.6 times in 2021, while Bitcoin's return in the same period was only 64.4%; after the market began to bear in 2022, BNB fell by about 52.5% throughout the year, while Bitcoin fell by more than 65.3%. In comparison, BNB is more resistant to declines; from 2023 to date, BNB has only risen by about 12.2%, lagging behind Bitcoin's 62.3%. This is related to the tightening of supervision on crypto exchanges including Binance by the United States and other countries. BNB, as a platform currency, has been more or less affected.
But no matter what, from an overall perspective, facing the current bear market environment full of regulatory challenges, Binance, whether from the perspective of BNB Chain on-chain activity or product selection, not only has the ability to resist declines, but also has selling points that attract capital favor. It is not difficult to see that Binance is still able to fight, and the entire crypto market is gradually transitioning to a recovery stage after a long cooling-off period.