The BNB Chain ecosystem demonstrated much strength last week, as it appeared to secure its spot as a leading Layer 1 blockchain.
The BNB Chain had a market cap and on-chain activity that surged. There was a seemingly coordinated ecosystem development push, too, that noticeably improved the BNB Chain. Altogether, it seemed like the BNB Chain was catching up to the overall Layer 1 blockchain scene, so we thought it might be worth checking out.
Market Cap Climbs as BNB Leads Among Gas Tokens
The past week has seen a much broader altcoin rally that has given many assets a big boost, but we have to mention that BNB Chain really stood out over that timeframe, adding an impressive $8 billion in market capitalization. The total market cap of the BNB Chain ecosystem now stands at $175.4 billion, which is a 4.8% increase in the past seven days. Meanwhile, the BNB token itself has followed a very similar path, reaching an impressive high of $695 and making a pretty clear statement that it is the best-performing smart contract gas token within the top-10-cap cryptocurrencies.
Consistent growth has been witnessed by BNB for over a month now. This isn’t merely a weekly uptrend; the token’s valuation is undergoing a growth phase, and it seems like there is some fundamental strength underpinning this rise.
Last week, I mentioned that the sentiments in the broader market appeared fairly balanced. This week, that observation holds true once more. The Fear & Greed Index has cooled down to a healthy 68 — that’s what we in the trade call a safe level.
On-Chain Metrics Go Parabolic
Even though market gains are impressive, it is the on-chain activity of BNB Chain that is really making news. Year-to-date, daily transactions on the BNB Chain have erupted by 310%, vaulted from 3.5 million to a staggering 14.4 million daily. This explosion of activity reflects not only greater network usage but, even more importantly, the settling-in of BNB Chain as a go-to layer for decentralized applications.
Maybe even more incredible is the decentralized exchange (DEX) trading volume. In just May, volumes leaped by a thrilling 1400%, shooting BNB Chain ahead of all other Layer 1 networks in our space and making it the clear winner in on-chain trading. The network now processes more trading volume than all its competitors combined, which is quite the milestone and really underscores the platform’s scalability and cost efficiency.
In the last 7 days, the BNB Chain has shown the most growth in TVL. This is a clear signal that more developers and users are interested in building on and using the BNB Chain ecosystem.
Network Upgrades and Ecosystem Shifts
A significant technical upgrade is also on the horizon. On May 26, the BNB Chain testnet successfully executed the “Maxwell” hard fork. This update brings several performance improvements. These improvements include a 50% reduction in block times — from 1.5 seconds down to just 0.75 seconds. They are expected to enhance transaction throughput and reduce latency.
The hard fork brings us BEP-524, BEP-563, and BEP-564, which are all intended to make BNB Chain function more efficiently. They are indirect fixes for what we on the team have identified as some of the weak points in the underlying structure of the BNB Chain. They are also fixes that should allow the BNB Chain to scale extremely efficiently.
At the same time, DeFi continues to evolve. One of BNB Chain’s oldest DeFi platforms, Alpaca Finance, has announced its shutdown after a four-year run. Persistent revenue challenges, along with M&A discussions that led nowhere (especially after the platform was delisted from Binance), seemed to have pushed the platform into the ground. But Alpaca’s not the only platform facing headwinds. Users of the platform will need to withdraw funds and unwind positions by December 31, 2023.
In a more positive development, BNB Chain has added another project to its HODLer Airdrop program. Sophon (SOPH), now the 20th project in the HODLer Airdrop program, has opened up an opportunity for BNB Simple Earn subscribers to acquire SOPH tokens. They will receive 150 million SOPH tokens before the project’s spot trading program commences.
The previous week has demonstrated that BNB Chain is a top-tier Layer 1 blockchain as it continues to attract even more on-chain activity and is expanding its technological capabilities. Not only is the network performing well in terms of the overall crypto market, but it also is seeing a strong uptick in usage, which, coupled with some upcoming infrastructure upgrades, seemingly puts the ecosystem in a position to have sustained growth.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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