For the first time in six months, Binance Coin, the native token of BSC Chain, went in the opposite direction of the rest of the cryptocurrency market on December 26. It jumped 11% to hit its highest level.
Even though BNB had a hard time breaking through the $300 barrier at first, the recovery closed the market capitalization gap that Solana had created.
Aside from stablecoins, BNB was the third-largest cryptocurrency before December 23. That changed, though, when SOL made huge gains of 50% in seven days. Now the question is whether BNB can keep its market value above $46 billion so it can move back into third place. Even though BSC Chain and Solana are decentralized, they both offer fast, cheap blockchains that don’t just rely on layer-2 scaling options.
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A big part of the value of the BNB token comes from lower trade fees and special launchpad services and offers from Binance. As soon as Changpeng “CZ” Zhao, the founder of the exchange, pleaded guilty to U.S. Federal charges on November 21, investors were afraid that it would quickly lose market share.
But that wasn’t the case—at least until the trial is over and Binance has to give all trade information to a watchdog chosen by the Justice Department. Also, Binance’s settlement with the U.S. Commodity Futures Trading Commission (CFTC) on December 18 made the risk of a regulation shutdown even lower.
However, BNB is under pressure to be sold because a lot of its ownership is held by Binance’s leaders and team. Investors lost faith in the exchange because it wasn’t clear how the BNB tokens were distributed at first. This was especially true after the exchange changed how it burned tokens over time. Basically, the original promise to buybacks using money from Binance’s exchange was changed to a simple “burn” method.
There are many ways to figure out how much the BNB token is worth, but none of them can truly reflect how most people in the market see its pros and cons. Even so, it is still a good idea to see how the network stacks up against other groups.
The fact that decentralized apps (DApps) work well on the BNB Smart Chain shows that people want the BNB token. Besides Binance’s goods and services, the BNB token’s value mostly depends on how it is used in the BSC Chain.
Total value locked (TVL) on BSC Chain is $3.6 billion, which is the amount of deposits in its smart contracts. This is less than 13% of Ethereum’s $28.2 billion. Even worse, it’s less than the $4.6 billion that Arbitrum, Optimism, Polygon, and Base, Ethereum’s best scaling options, already have.
In the last 30 days, BSC Chain’s TVL went up by 25%, but other leaders like Solana and Avalanche went up by 142% and 50%, respectively.
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When looking at networks that are used to run DApps, volume and the number of addresses used in smart contracts, which can be used as a reference for user numbers, should be the main things you think about.
In terms of volume, Ethereum and its layer-2 scaling options are still the best. In the last 30 days, they’ve gained over $46.4 billion, with 73% of that volume coming from Ethereum’s base layer. BSC Chain, on the other hand, saw $4.7 billion in volumes during the same time period, which is only a 6% rise from the previous month. But when current unique addresses (UAW) are taken into account, BSC Chain, Solana, and zkSync Era are the best. In light of this, it’s unclear whether those numbers truly show the truth.
The fact that the number of addresses using DApps on BSC Chain has grown by only 7% in 30 days is worrying, especially when compared to Ethereum’s 12% growth during the same time period.
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In the same way, Solana saw a 28% increase in the UAW measure. Because of this, the recent rise in the price of BNB probably wasn’t just due to more action on the BSC Chain or its higher TVL compared to other blockchains.
This doesn’t necessarily mean that BNB’s price will go down, but it will be hard to get back to third place in market value if things don’t get better
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