Looking at the encryption market from the data on the multi-dimensional BNB Chain: is it on the eve of a bull market?
After the tightening of macro policies and the successive explosions of encryption institutions such as FTX, the encryption market has been in a downturn. We have been in a bear market for too long.
Although no one can accurately predict the direction of the market, judging from the recent data indicators of global policies, industry hotspots, and ecological activity, the market is recovering, sentiment is gradually returning, and we may be in the transition stage of the beginning of the bear tail .
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The trading volume of BNB Chain DEX is recovering, and it is coming out of the haze of the bear market
Taking various public chains as an example, the various L1s that flourished in the bull market have gradually become silent in the deep bear market, and some of them have even approached decline, and there is no real activity on the chain. The data shows that the data of BNB Chain has not only recovered, but also become more prosperous recently.
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The green part is the BNB Chain share, source: DeFiLlama
As of the publication of this article, BNB Chain’s DEX 7-day transaction volume (May 23-May 30) is about $5 billion, while the Ethereum mainnet’s DEX transaction volume is only $5.6 billion.
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User growth, frequent interactions, on-chain activities have returned
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(Image source: DeFiLlama)
As can be seen from the figure above, with the bear market, the number of BNB Chain transactions has declined. It reached a low point at the beginning of this year, but then gradually recovered. In the near future, the number of its Tx has returned to the level at the end of last year, and the activity on the chain is not low, and it is still showing obvious signs of rising.
There are many reasons for the recovery of its on-chain activity. If observed from the number of users, the result seems to be more obvious.
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(Image source: tokenterminal)
The current data has increased by nearly half of the number a few months ago, and the activity on the BNB Chain is constantly recovering.
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(Image source: tokenterminal)
Of course, the main network is a barometer of the overall market. Although it reflects the overall temperature of the market to a certain extent, the network’s competitive relationship with other public chains is not obvious.
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Will Layer 2 seize the BNB Chain market share?
With the end of the "new public chain" boom in the bull market, this year's market sentiment and on-chain activities have gradually shifted to Layer 2. Although technically speaking, Layer 2 is technically more "orthodox" because the security is guaranteed by the Ethereum main network, but in terms of user experience and user perception, there is not much difference between Layer 2 and the EVM public chain on the user side. There is direct competition.
Taking Arbitrum as an example, its data performance has been tepid since its mainnet launch. After the large-scale airdrop of ARB tokens in March of this year, on-chain activity became active rapidly.
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(Image source: tokenterminal)
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(Image source: tokenterminal)
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Stable currency use case is active, is it a harbinger of market recovery?
Regardless of whether it is bullish or bearish, the demand for stablecoin transactions will always exist. This is also an important transaction indicator that reflects whether transactions on the chain are active. Stablecoins can reflect the adoption rate of the network to a certain extent. With the accelerated adoption and popularity of the chain, the number and transaction volume of stablecoins on the chain will inevitably usher in growth.
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(Image source: DeFiLlama)
Previously, BUSD had experienced regulatory turmoil. As a chain that has a certain correlation with BUSD, the number of stable coins in BNB Chain has also been affected to a certain extent, but it has not caused any obvious changes. The data shows that the current circulation of stablecoins on the BNB Chain chain has declined to a certain extent, but the number of TVL has remained relatively stable at around $6 billion.
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(Image source: DeFiLlama)
In terms of shares, the combined stablecoin shares of the Ethereum mainnet and the Tron mainnet accounted for the majority. Due to various historical reasons, the vast majority of the stable currency market has always been held by these two companies.
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(Image source: DeFiLlama)
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Hard fork, store new chain, build "another Binance" outside of CEX?
Currently, BNB ChainTVL is as high as $4.5 billion. It ranks third in the entire DeFi market, second only to the Ethereum mainnet and Tron. BNB Chain is an old-fashioned "new public chain". Although this project is no longer "novel", its ecology and projects are constantly prospering.
On May 22, data from The Block showed that the ratio of DEX to CEX spot trading volume hit a record high, and the proportion of DEX exceeded 20% for the first time. Meanwhile, CEX cryptocurrency trading volumes are at an all-time low this year.
A prosperous Layer 1 network can build a more decentralized encryption ecosystem than CEX.
In February of this year, after the reintegration of the BNB Chain, its structure can be compared to Ethereum. The BNB Beacon Chain (formerly Binance Chain) provides a secure technical bottom layer, and the BNB Smart Chain (Binance Smart Chain) has actually become the execution layer. . In its ecology, Dapp covers all tracks, including DeFi, SocialFi, NFT, GameFi, Metaverse, cross-chain, derivatives, infrastructure, etc., covering almost all areas of the chain world.
In February, BNB Chain released the BNB Greenfield white paper, and launched the test network "Congo" in early April. According to the latest news, the main network of BNB Greenfield will be launched in the third quarter of this year. Although it has not yet been launched, the birth of this new chain has also allowed us to see the further prosperity of the ecology on the BNB chain.
Although BNB Greenfield is still a brand new chain, its native storage function can give BNB Chain a strong infrastructure support. This innovation may bring a large number of imaginative new use cases.
In the upcoming June 12th, BNB Chain will also undergo a "Luban" hard fork upgrade. This upgrade consists of three proposals: BEP-126, BEP-174, and BEP-221, aimed at creating a faster and more secure network for users.
The "Fast Finality" mechanism introduced by BEP-126 makes it impossible for a block to be reversed once it is finalized on the network, which will reduce the possibility of bad actors performing chain reorganizations.
BEP-174 proposes "Cross-Chain Relay Management", which aims to mitigate any potential security issues in BBSC Bridge. BEP-221 proposes "CometBFT Light Block Validation", a contract that helps to validate specific blocks from other CometBFT compatible blockchains and enables data transfer between those blockchains.
Although the market is still relatively sluggish, due to its lower gas fee and always active ecology, BNB Chain is still the underlying layer preferred by users in daily transactions.
In the encryption world, projects in the bull market are attracting much attention, but whether a project can pass through the bull-bear market will ultimately take the test of time. With the alternation of the market cycle in this round, how will the market structure change in the future?
