This time we will analyze the possibility of Binance crash from three perspectives:
1. Platform asset composition:
Objective: To determine the anti-fragility of the platform’s asset allocation and to predict the probability of similar events based on their causes in the past.
Monitoring indicators: Total assets of addresses on each Binance chain (about $60 billion) / Reserve asset distribution / Native asset ratio
2. Dynamic structural changes of platform assets: inflow and outflow
Objective: To present a panoramic view of firefighting and escape, and to determine the extent of current liquidity risk
Monitoring indicators: Binance platform 24-hour/3-day inflow and outflow and 24-hour/3-day ratio to confirm the real reason for capital outflow
Judgment: The proportion of escape in the form of exchanging assets for USDT is relatively high
3. Dynamic changes in platform asset value: price fluctuations of major reserve assets
Objective: To identify the distribution of major reserve assets and analyze the factors that may lead to risks.
Monitoring indicators: price fluctuations of the platform’s native tokens, whether the stablecoins in the ecosystem are decoupled
text:
Currently, Binance monitors the total assets of addresses belonging to each chain: about $60 billion
ETH accounts for more than half, 62.39% --- $37.7 billion;
Tron accounts for 19.07% - $11.5 billion;
BTC accounts for 11.02% — $6.6 billion;
BSC accounts for 5.83% - $3.5 billion
Possible flashpoints: A direct flashpoint in the FTX and Luna incident is that a large amount of reserve assets are tokens of this ecosystem, while Binance system assets only account for 5%. Therefore, the probability of reserve assets returning to zero due to uncontrollable events in this ecosystem is relatively small.
The top five assets in the ETH chain's reserves are BUSD, ETH, BNB, USDT, and USDC.
BUSD — $18.4 billion, accounting for 49.17% of the total reserves of the ETH chain;
ETH---$6.2 billion, accounting for 16.76% of the total reserves of the ETH chain;
BNB---$4.2 billion, accounting for 11.27% of the total reserves of the ETH chain;
USDT---$1.8 billion, accounting for 4.93% of the total reserves of the ETH chain;
USDC---$1 billion, accounting for 2.79% of the total reserves of the ETH chain;
Possible risk points: As can be seen from the above, Binance's native assets in the total reserve of the ETH chain are about 60%, which are embodied in the form of BUSD and BNB. If you peel off the shell mentioned in the previous article, in fact, Binance's reserve assets can be said to be still issued by itself. If extreme situations occur, such as BUSD depegging or BNB price drops, causing users to sell off a large area to cash out, it is possible that FTT or Luna will return to zero overnight. The probability of such an event remains to be observed in terms of market sentiment and policy trends, but these two incentives are worth tracking by large asset holders. If there is an abnormality, assets can be withdrawn in time to ensure safety.
Within 22 hours of Reuters’ first announcement on December 12 that US prosecutors planned to sue Binance, the 24-hour net inflow of Binance was as follows:
BNB: $48,000
BUSD: -$610 million
ETH: -$220 million
USDC: -$180 million
USDT: -$560 million
Total outflow: $1.57 billion, mostly in the form of BUSD and USDT, which accounted for 74.52% of the total outflow and 2.6% of the total reserves.
The net inflow data of the above-mentioned assets within 3 days are as follows:
BNB: $59,000
BUSD: -$640 million
ETH: -$230 million
USDC: -$280 million
USDT: -$450 million
The percentage of 24-hour net inflow to the net inflow within 3 days is:
BNB：81.35%
BUSD：95.31%
ETH：95.65%
USDC：64.28%
USDT：124.44%
This shows that the main reason for the net outflow of funds is indeed the panic escape of users caused by the above news, and the rate of escape in the form of converting assets into USDT accounts for a relatively large proportion.
Possible warning points: Although BUSD has the largest net outflow according to the data, it is possible that some people use BUSD depegging for arbitrage and interfere with the authenticity of the data. Therefore, when measuring the outflow of funds, the total amount of BUSD+USDT is mainly observed, and the speed of USDT outflow is supplemented. Once it is found that the total outflow ratio of the two is constantly expanding and the outflow speed of USDT is accelerating, please withdraw your assets in time to ensure safety.
Summarize
When deciding whether to withdraw assets from the Binance platform, you need to pay attention to the following points:
BUSD is seriously depegged
BNB price drops sharply
The total amount of BUSD+USDT outflow continues to expand, and the frequency of USDT outflow increases
