In a recent report from Messari, the analysis sheds light on the developments and challenges facing Binance Chain (BNB), the blockchain created by binancethe largest cryptocurrency exchange in the world with respect to trading volume.
The report highlights the separation of BNB Chain from Binance and various events and allegations that have impacted Binance and its associated entities throughout the third quarter of 2023.
Binance Chain Separation and Challenges
Messari’s report emphasizes that BNB Chain has distinguished itself as an independent entity separate from Binance despite its origins as a product of the largest centralized cryptocurrency exchange. However, the market has not fully recognized this separation, leading to a lack of distinction between BNB Chain and Binance.
During the third quarter, Binance faced numerous challenges, including losing partnerships, closing business lines, making layoffsand in front of accusations of violating sanctions.
These developments coincided with downward pressure on the value of BNB, which saw a 25% drop from the previous quarter. In contrast, the cryptocurrency market fell by 9% during the same period.
The Messari report mentions that Binance, including its subsidiary Binance.US, was accused by the Securities and Exchange Commission (SEC) from engaging in unregistered offers and sales of “crypto securities,” including BNB.
These accusations further added to the challenges faced by Binance and its associated entities during the third quarter.
BNB Chain Performance and On-Chain Activity
In spite of the challenges, BNB maintained its position as the fourth-largest cryptocurrency by market capitalization, with a market capitalization of $35.3 billion. The circulating supply of BNB decreased by 1.3% in the third quarter due to the token burning mechanism employed by BNB Chain.
The report also highlights the impact of adverse events on BNB Chain’s on-chain activity. BNB Smart Chain revenue, measured in BNB, fell in line with the decline in BNB market capitalization, indicating a decline in activity on Binance Smart Chain (BSC). Daily transactions (-14%) and average fees (-12) on BNB also saw drops during this period.
BNB Chain offers staking opportunities for cryptocurrencies such as ethereum (eth), BNB, Cardano (ADA), and others. The report notes that total participation and eligible supply decreased by 3% and 2%, respectively, while the average annualized betting return decreased from 2.6% to 2.1% during the third quarter.
The DeFi sector on the BNB chain demonstrated strength compared to other sectors. The nft space saw a higher volume of secondary sales, one-time buyers and sellers.
However, stablecoin and GameFi transfers saw drops in volume. The report suggests that newer applications on BSC may have influenced the growth of unique buyers and sellers in the nft sector.
Ultimately, Messari’s report provides information on the separation of BNB Chain from Binance and the challenges that Binance and its associated entities will face during the third quarter of 2023.
Despite these challenges, BNB Chain maintained its market capitalization and continued to launch new products and implement technical upgrades. The report highlights the need for the market to recognize the separation between BNB Chain and Binance and the impact of adverse events on BNB Chain’s on-chain activity.
On the other hand, BNB has experienced a btc-sales-to-boost-bnb/” target=”_blank” rel=”nofollow”>prolonged downtrend since hitting its yearly high of $350 in April. The token subsequently plummeted to $202 on October 9.
However, recent events have led to a positive trend: BNB recorded a profit of 5.2% in the last 14 days and 1.8% in the last 30 days. As a result, the current trading price of BNB is $223.
Featured image from Shutterstock, chart from TradingView.com
