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| "Staying positive in the face of adversity is what separates successful investors from the rest. Embrace challenges as opportunities for growth." - Ray Dalio |
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| In today's issue: Our investing thesis is Layer-1 blockchains are like operating systems. Just as most of the world runs on macOS or Windows, most blockchain apps end up running on either Ethereum or...?
Today, we move onto another top Layer-1 BNB Chain in our guide to the top 10 projects building on top of it.
Our new report is timely given the recent SEC action against Binance. While the BNB token is down nearly 20% since the news broke, not all he projects in the Binance ecosystem have suffered as badly.
Also, some of these projects are cross-chain, and can easily survive even if Binance doesn't. While caution should be exercised right now with anything Binance-related, if you believe the exchange can beat the SEC, it could be a good time to buy BNB at a discount.
If you're ready to see what projects are building on Binance, read on. |
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| | | Must Read Today's most important story for crypto investors. |
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| Tokenomics, which refers to the economic models governing the issuance and distribution of digital assets, is a significant area of study in the digital asset space.
An important aspect for investors is token unlocks, where early investors and insiders gain access to funds in a token that was previously locked to incentivize alignment with network interests.
This Coin Metrics piece looks at several specific token unlocks and their impacts on the free float supply to determine the impacts of token unlock events on the prices of tokens.
As the piece points out, from an economic perspective, the unlocking of tokens should theoretically push the price down, as it increases the availability of a commodity. However, these token unlocks don't occur in isolation, but within a complex ecosystem of market participants and speculators that are constantly preempting market events to exploit inefficiencies for profit.
Note that further analysis could reveal effects across different time periods or by categorizing market periods into bullish or bearish zones. |
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Investor takeaway: What will happen to the price of a token around an unlock event is anyone's guess. However, know that new tokens dilute your ownership stake(s). Read through a token's whitepaper and website to learn about its unlock schedule before investing. |
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| Must Read Today'saPremium Power-Ups Level up your crypto investing game. most important story for crypto investors. |
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| We're always looking to add more value for our Premium members, so we hope you'll join Bitcoin Market Journal (and our partners at the Boston Blockchain Association) for our very first meeting of the Blockchain Book Club!
For our first meeting, we'll discuss a16z’s “State of Crypto Report.” Take 10-30 minutes to look through this presentation prior to the meeting and come with your questions and discussion topics! If you don’t have time to do the reading, join us anyway to learn.
Moderated by angel investor and Amazon bestselling author Michael de la Maza, this is a great time to network, share ideas, and listen to other crypto investors.
Premium members: Join us on Zoom this Wed., June 14 at 6:30 pm ET. Click here to RSVP.
Not yet a Premium member? Sign up now to join the event and get access to our on-demand library of previous workshops. |
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The Ultimate Guide to the Top 10 Protocols on BNB Chain by Anatol Antonovici |
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| Executive Summary: Since 2021, BNB Chain has made significant strides in the decentralized finance (DeFi) sector, now holding a roughly 8.5% market share and standing as a formidable competitor to Ethereum and Tron. BNB's user-friendly design, compatibility with the Ethereum virtual machine, and lower transaction fees position it as an attractive alternative to Ethereum.
Our investing thesis is Layer-1 blockchains are like operating systems. Just as most of the world runs on macOS or Windows, most blockchain apps end up running on Ethereum or a competitor. If you believe in the long-term potential of BNB Chain as a top blockchain platform, buying and holding BNB is the way to invest in it.
With over 500 DeFi applications, BNB Chain continues to attract robust investor interest, bolstered by Binance's native token (BNB) being the fourth-largest crypto. That said, the recent SEC lawsuit against Binance has impacted the BNB token negatively, sending the price roughly 20% lower in a week. This could be a sign that worse things may come... or a good way to buy the token at a discount.
Before 2021, Ethereum monopolized the blockchain applications market thanks to its intuitive smart contract feature and user-friendly programming language. It accounted for 95% of all DeFi applications. However, the dynamic nature of the crypto space led to the emergence of fierce competition.
Binance, the world's largest crypto exchange, launched its own public blockchain as a competitor to Ethereum. Today, it holds roughly 8.5% of DeFi's total value locked (TVL), making it the third most popular DeFi ecosystem after Ethereum and Tron. |
Percentage share of Layer-1 blockchains (BSC is in purple). Image via Token Terminal. |
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What is BNB Chain?
BNB Chain has had several re-brandings. Today, it's made up of two separate blockchains: BNB Smart Chain (originally called Binance Smart Chain) and BNB Beacon Chain (BC). |
| BNB Chain is two blockchains in one: BNB Beacon Chain and BNB Smart Chain. Image via BNBChain.
BNB Chain uses a proof of staked authority (PoSA) consensus mechanism that's supported by 50 validators to ensure short block times and lower fees. The most-bonded validators become block producers, guaranteeing security, stability, and chain finality. BNB Chain is compatible with the Ethereum virtual machine (EVM) and facilitates cross-chain transfers and communications.
BNB Chain offers security and safety through its elected validators. It supports Ethereum tooling, ensuring faster finality and cheaper transaction fees. The native token, BNB, is used for executing smart contracts and staking. It's also the 4th largest crypto and boasts a market cap exceeding $47 billion.
BSC hosts over 500 dapps. We'll discuss the top 10 by total value locked.
Top 10 Protocols on BSC by Total Value Locked |
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PancakeSwap
Type of dapp: DEX BMJ Score: 4.0
PancakeSwap is a decentralized exchange (DEX) built on BNB Chain. It enables users to swap Binance's BEP-20 tokens seamlessly. Borrowing elements from Ethereum-based Uniswap and SushiSwap, PancakeSwap implements an automated market maker (AMM) system, eliminating the need for a centralized order book or facilitator. This means users trade against liquidity pools funded by other users instead of trading directly with counterparties.
Besides trading, PancakeSwap users can become liquidity providers, earn shares of transaction fees, participate in yield farming to earn CAKE tokens, and engage in lotteries. Moreover, it supports trading and staking of non-fungible tokens (NFTs).
PancakeSwap accounts for about 44% of all total value locked (TVL) on BNB Chain, so it easily makes the list of the top 10 largest DeFi protocols. |
Venus
Type of dapp: Lending BMJ Score: 4.0
Venusis a DeFi lending platform for the BNB ecosystem. It aims to provide secure and decentralized lending and borrowing of crypto. Anyone can access this algorithm-based money market by connecting compatible wallets like MetaMask.
Users can lend or borrow supported digital assets, earn token rewards, and participate in governance via Venus' native token XVS. The protocol integrates the functionalities of Compound and MakerDAO, enabling users to lend, borrow, and mint stablecoins within single ecosystems. On Venus, interest rates are set by the protocol and respond to market demands, but the minimum and maximum levels are determined by the governance process. The protocol was founded in 2020 by the team behind Swipe. The team’s goal was to bridge traditional finance and DeFi on the BNB Chain. With a TVL figure of $800 million, Venus is the second-largest DeFi protocol on BSC. |
Biswap
Type of dapp: DEX BMJ Score: 3.5
Biswap, launched in May 2021, is a DEX offering token swapping on BSC with trading fees starting from as low as 0.1%. Besides providing a platform for trading, farming, and staking, Biswap offers an innovative three-type referral program rewarding users for their referees’ activities in farming, launchpools, and swaps.
The ecosystem also hosts an NFT marketplace and NFT game. Utilizing an AMM model, Biswap ensures swift transactions while maintaining user control over funds. Its native token (BSW) facilitates incentivization across the platform. With astrategic investment from Binance Labs, Biswap enhances its innovative DEX services. |
Radiant V2
Type of dapp: Lending BMJ Score: 3.5
Radiant is an Arbitrum-native, omni-chain money market protocol that's also supported on BSC. It aims to facilitate cross-chain deposit and borrowing of major assets. With the recent launch of Radiant V2, the protocol addresses some of the issues encountered in V1 like initial emissions, liquidity provision, and fixed unlock times. Enhancements include refined tokenomics, increased utility, the integration of cross-chain capabilities, launches on multiple new EVM chains, and the implementation of the LayerZero Omnifungible Token (OFT). V2 is also designed to amass fair value for the DAO, positioning Radiant as a leading, fee-generating protocol in DeFi. The upgrade underwent rigorous security audits by Peckshield, Zokyo, and BlockSec, affirming its robust security framework. |
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Alpaca Finance
Type of dapp: Yield farming BMJ Score: 3.0
Alpaca Finance is a decentralized finance (DeFi) platform launched on BSC in early 2021. It offers leveraged yield farming and supports undercollateralized loans for enhanced yield farming positions, improving capital efficiency.
With over $300 million in TVL, it has grown rapidly since its launch, diversifying into single-asset staking, LP staking vaults, and experimental synthetics while actively partnering with other protocols.
Alpaca’s lending mechanism lets users earn yield through Alpaca tokens and popular cryptos like BTC, ETH, and BNB.
Alpaca also adopts a deflationary buyback and burn model for a percentage of platform fees. This reduces total supply over time, strengthening the value proposition of the protocol. |
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Binance Staked ETH
Type of dapp: Liquid Staking BMJ Score: 3.0
To compete with the popular Lido, Binance launched its own Ethereum-based liquid staking product. Like Lido, this service enables users to earn staking rewards on ETH without locking up their assets, providing enhanced liquidity and more yield opportunities in DeFi.
Launched initially in response to the Ethereum network's shift to Ethereum 2.0 and its proof of stake mechanism, this product was shifted to a wrapped version of Ether (WBETH) after Binance was served with an SEC lawsuit. It caters to the ETH community's increasing demand for staking. Users can stake any amount of ETH and receive WBETH tokens in exchange, which can be eventually used for yield opportunities across the BSC ecosystem. These tokens can be traded, transferred, or used as collateral on Binance, multiplying the options for staked ETH. |
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PinkSale
Type of dapp: Launchpad BMJ Score: 3.0
PinkSale is a decentralized launchpad unveiled in July 2021. It enables token creation and presale funding for projects across various networks including BSC, Ethereum, Fantom, Polygon, KuCoin Community Chain, and Avalanche. It stands apart with its minimalist toolkit for swift token development and Initial Dex Offering (IDO) sales.
PinkSale integrates innovative features like an anti-rug pull system, antibot feature, and various token types. It also ensures platform safety through regular audits by Certik. With more than 6,000 projects launched, 650,000 participants, and $220 million in TVL, PinkSale has solidified its status as a leading decentralized crypto launchpad while preventing scams and maintaining platform decentralization.
Warning: These IDOs are likely to be considered unregistered securities in the eyes of the U.S. Securities and Exchange Commission. |
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UNCX Network (formerly UniCrypt)
Type of dapp: Launchpad BMJ Score: 2.5
Launched in June 2020, UNCX Network (previously UniCrypt) is a one-stop DeFi solution providing five principal services to streamline project development and enhance investor security. With offerings like Initial Liquidity Offering (ILO) services, liquidity lockers, token vesting, staking-as-a-service, and the ENMT Token Minter, the UNCX Network facilitates transparency and safety for both project creators and investors.
Developers can create bespoke presales, lock liquidity to protect investors, vest tokens for price stability, and establish staking pools. For those lacking token or solidity skills, the network's minter creates pre-audited tokens, boosting project credibility. UNCX Network's integrated platform simplifies project launches and operations while promoting secure investments.
Warning: These ILOs are likely to be considered unregistered securities in the eyes of the U.S. Securities and Exchange Commission. |
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CoinWind
Type of dapp: Yield BMJ Score: 2.0
CoinWind is a smart yield farming platform supported by HECO and BSC. Launched in 2021, it's strategically designed to optimize user revenues by automatically matching pledged tokens (digital assets locked for rewards). As of May 2023, the protocol’s TVL is over $200 million.
CoinWind effectively addresses the issues of low revenues from single-token mining and high risks from LP mining in the DeFi landscape. As a smart decentralized finance management platform, CoinWind aggregates funds from various token pools to participate in diverse liquidity mining opportunities. It combines this with price hedging strategies to lessen impermanent loss, thus aiming to maximize user returns while minimizing unpredictable losses. |
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THENA
Type of dapp: General BMJ Score: 1.0
THENA is a newer project that looks to become the go-to DeFi trading platform on BNB Chain. Per its roadmap, the ecosystem includes a wide range of DeFi products including ALPHA, an advanced perpetual trading platform; WARP, a launchpad accelerator; and CORE, a social hub promoting user interaction. Also, RAMP ensures seamless fiat transactions, something other DeFi projects don’t offer. |
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| Investor Takeaway
Since 2021, BNB Chain has demonstrated significant growth and adoption in the DeFi space, capturing nearly 10% of the total market and vying with Tron for the spot as the second-largest DeFi ecosystem. Despite Ethereum's dominance, BSC's lower transaction costs, shorter block times, and compatibility with the Ethereum virtual machine have made it an appealing alternative for many projects.
The BNB Chain hosts a multitude of DeFi applications, and a diverse range of protocols leads the way. Projects like PancakeSwap and Venus have left their mark on the ecosystem, with the former accounting for almost half of BSC's total value locked.
While BNB is maintaining its position among the top five largest cryptos by market cap, investor interest and confidence in the BNB ecosystem has fallen due to the SEC lawsuit against Binance and its founder and CEO Changpeng Zhao. Given the uncertainty surrounding the exchange, it would be wise to remain cautious about investing in BNB and any project building within the Binance ecosystem. |
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