BNB Chain’s Q2 Performance Sparks Optimism Amidst Regulatory Uncertainty
July 27 2023 - 4:00PM
NEWSBTC
Binance Smart Chain (BNB) has seen significant growth in its daily
active addresses and transactions in the second quarter of 2023,
according to a report by blockchain analytics firm Messari.
The increase in activity was primarily driven by LayerZero, a
cross-chain messaging protocol that enables lightweight and
efficient communication between different networks. However, BNB’s
market cap declined by 25.2% after the US Securities and Exchange
Commission (SEC) alleged that BNB is a security in its regulatory
actions against Coinbase and Binance. Despite this, the total
cryptocurrency market cap increased by 2% quarter-over-quarter
(QoQ), primarily driven by Bitcoin (BTC) and Ethereum (ETH). BNB Q2
Revenue Declines Per the report, BNB’s revenue in BNB decreased by
6.1% QoQ as average transaction fees declined 25.5% after BSC
validators voted to reduce gas fees from 5 to 3 Gwei.
Nevertheless, staking on the network remained stable. BNB Chain
plans to increase the number of validators from 29 to 100 with a
new validator reward model (balanced mining) and a validator
reputation system. On the other hand, the Binance Smart Chain saw a
decrease in total value locked (TVL) denominated in USD during Q2
2023, decreasing by 26.3%. However, TVL denominated in BNB was
relatively flat at -2.8%. While PancakeSwap remained the most
prominent protocol by TVL on the BNB Chain, its dominance decreased
from 45% to 37% during the quarter, indicating a shift in TVL
concentration towards a more robust DeFi ecosystem. Related
Reading: PEPE Whales Load Up Their Bags As Memecoin Jumps 13% In
the stablecoin space, Binance Smart Chain has the third-highest
total stablecoin market cap of approximately $5.7 billion, trailing
behind Ethereum and TRON. The BUSD market lost some of its users
after regulators forced Paxos to cease the issuance of BUSD,
resulting in a decline of approximately 54% in the BUSD market cap
on the BNB Chain during Q1. Developer engagement also showed
positive growth during Q2, with the number of unique contracts
verified growing by 51.9% QoQ, and full-time developers on the BNB
Chain increasing from 130 to 133 QoQ. Despite the decline in TVL
denominated in USD, the BNB Chain’s continued expansion of its DeFi
ecosystem and the shift in TVL dominance towards a more diverse
range of protocols signal a promising outlook for the ecosystem’s
future. Binance Smart Chain Outlines Ambitious Plans For 2023
Despite the regulatory challenges, BNB Chain has laid out robust
plans for 2023, including increasing the network’s gas limit to
boost throughput and reducing the data footprint through state
offload. BNB Chain also plans to further decentralize by
introducing a new validator reward model and a validator reputation
system to increase the number of validators from 29 to 100. The
roadmap highlights other initiatives, including increased
scalability through modular architecture, creating a data storage
network, and implementing consumer protections provided by
blockchain security firms. Related Reading: Fed’s No
Recession Claim Boosts Bitcoin And Crypto, Historical Data
Contradicts In Q2, BNB Chain validators and projects discussed the
integration of miner extractable value (MEV) within the BSC
network, with some validators piloting MEV in various formats. With
its wide-reaching plans, BNB Chain aims to remain competitive for
the rest of 2023. While the regulatory challenges faced by Binance
and Binance.US directly impact the entire crypto ecosystem, Binance
and BNB Chain are separate entities. Binance, Binance Labs, and the
Binance Launchpad help grow the BNB Chain ecosystem through asset
listings, liquidity provision, investment, and project
launches. The outcomes of the ongoing lawsuits are
unpredictable, and adverse outcomes could slow the advancement of
the BNB Chain ecosystem and bring continued volatility to its
native BNB token. Featured image from Unsplash, chart from
TradingView.com
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