After the explosive growth at the beginning of the year, the BSC ecosystem seems to be starting to show signs of weakness. In recent times, the growth of BSC head projects has been sluggish, the lock-in has been losing volume and the yield has plummeted. Some investors are starting to worry whether the dividend period of the BSC ecosystem is over.
BSC was once regarded as a dark horse in DeFi, and its rise was beyond the expectations of many professionals, with onlookers believing it was just a copy of Ether and not decentralized enough. Followers enjoyed the dividends of its explosive growth and accumulated a lot of wealth in the short term.
Currently, BSC’s locked position is $42 billion, almost half of Ether’s. BSC’s daily on-chain transactions are in the tens of millions, compared to Ether’s millions during the same period, an order of magnitude higher than Ether. Today, BSC is the second most active blockchain, and its user base increased by 61% in April. May’s numbers are not expected to be too bad because of the recent wave of animalcoin and meme coin hype, which brought huge traffic to BSC. Due to the low cost and speed of transactions on the BSC chain, many projects chose to issue coins on BSC, and at the height of the wave, the BSC network was once congested.
Earnings plummeted and lockups exploded
After entering May, the head projects of BSC showed their weaknesses. the locked position of Pancakebunny, the largest machine gun pool of BSC, fell from the highest $7.6 billion on May 4 to $4 billion today, and the locked position of Venus, the largest lending platform of BSC, fell from $15 billion on May 10 to $8.7 billion.
In addition to the near-death of the lockup, the earnings of these platforms have plummeted, with pancakebunny’s single-coin earnings suddenly dropping from double digits to single digits last week, seemingly signaling the end of the “white whoring” era. The price of the coin has also plummeted.
Usually, lock-in volume and yield affect each other, with yield having a greater impact on lock-in volume. The higher the yield, the greater the amount of money coming in, and when the yield drops to less than investors’ expectations, it leads to a withdrawal of funds.
As it happens, the recent behavior of the headline programs on BSC have all had an impact on yields.
1) Pancakebunny: On May 11, the reward output of bunny was adjusted from the previous 5:1 to 3:1, and the yield exploded by 40%. on May 14, Pancakebunny lowered the mining leverage multiplier of single coins such as BTCB from the current 2.5 to 1.0, leading to a further reduction in yield, and the mining yield of BTCB and ETH thus fell to Single digits.
2) Venus: On May 14, Venus passed a proposal to reduce XVS production by 50%, which was officially implemented today. The impact of this production reduction on Venus is very obvious, with lockups plummeting at a rate visible to the naked eye.
Where does the money go?
Money never sleeps and will always flow to where it is more efficient.
From within the BSC ecosystem, the weakness of the headline projects gives the later the opportunity to catch up.
In the DEX space, pancakeswap has a lock volume of over $12 billion and a volume of $2 billion traded in the last 24 hours, making its position as king hard to shake even if it jumps out of the BSC ecosystem.
With such a large volume, it seems to have reached the ceiling. Shortly and then let pancake lock volume and trading volume on an order of magnitude, this round of bull market is afraid that can not be achieved. This has instead given the second and third tier DEX the opportunity to grow. The most outstanding ones are bakeryswap and aeswap.
On April 27, BakerySwap received a strategic investment of $100 million in BSC seed funds from Coinan, and the news spread like wildfire in the community. The timing of the news coincided with the announcement of the launch of the NFT trading platform in June, and combined with the fact that Bakeryswap is the more vocal DEX platform for NFT on BSC, the subtle relationship completely ignited the market enthusiasm, and the Bakeryswap platform coin BAKE pulled up in a straight line after the news was announced, soaring 7 times in less than a week.
On May 11, the meme coin DOGGY was launched, and with the help of “animal coin craze + self-burning dividend mechanism + NFT concept”, DOGGY surged more than 100 times in less than a week, and Bakeryswap even named itself the “100 times coin factory”. Bakeryswap even named itself “100 times coin factory”.
The huge wealth creation effect attracted a large number of investors to trade on the platform. bakeryswap’s lock volume and trading volume both reached new highs.
Apeswap is a very clean DEX, and is considered by many to have a high potential to become the Sushiswap on BSC.
DEX has long been a red ocean and it’s hard to run out of it. For a long time since its launch in February, apeswap’s lock volume has been hovering around 10 million dollars, a volume that almost no one would pay attention to when looking at the DEX market. But aeswap has a great community atmosphere, and the number of tweeters and telegraphers has been growing. As a latecomer, aeswap has had an interesting playbook, launching IAO (benchmarking pancakeswap’s IFO), NFA (benchmarking NFT), GNANA (the platform’s membership benefits) and a flexible burn mechanism, leaving the market with a new set of expectations in its favor. After getting CZ’s attention in April, pancakeswap quickly opened up the situation, with lockups jumping from 10 million to 100 million and trading volume rising.
Not long ago, pancakeswap upgraded to 2.0, and aeswap quickly seized the opportunity to launch a one-click LP migration feature, allowing LPs originally on pancakeswap to migrate to aeswap. this small move is interesting, as sushiswap siphoned off a lot of liquidity from uniswap last year. Compared to pancakeswap, aeswap has high seeding returns, and I believe aeswap’s TVL will rise further as more investors take notice.
Outside of the BSC ecology, Polygon (MATIC), Solana, Fantom and other ecologies are also drawing money, with Polygon in particular performing well.
Against the backdrop of the recent general market decline and sluggish growth of major DeFi eco-funds, Polygon’s lockup has bucked the trend and is currently over $8.6 billion. Relative to other second layers, Polygon has captured a head start and continues to attract more and more head projects in the ethereal community to participate, including AAVE, Curve, Sushiswap and other DeFi blue chips are deployed in Polygon. Polygon is now just in the mining bonus period, with many projects’ annualized mining returns above 100%.
Compared to internal competition, external competition is more alarming. At the moment, Polygon is the most likely opponent to beat BSC.
How far can BSC go?
Coin and CZ are the strongest backing for BSC, which is its advantage and time bomb. In this round of CeDeFi boom, Coinan is the biggest winner, none other than CZ, which made Coinan the world’s largest cryptocurrency exchange and made BSC ecology the biggest DeFi playground outside of ethereum, and many followers praised its far-reaching pattern. ecological projects on BSC are often sought after by investors if they are supported by Coinan. However, regulation has always been a sword hanging over Coinan’s head, and almost every time there is news that Coinan is being investigated by the US, it triggers market turmoil. Fortunately, Cryptocurrency takes its legal obligations very seriously and cooperates with regulatory and law enforcement authorities in a collaborative manner.
BSC has been able to rise quickly without low GAS fees and faster transfers, however, the recent congestion on BSC has caused a re-examination of BSC’s aforementioned advantages.
SBF has $2 billion worth of assets seeded on BSC, and the operational strategy of digging up and selling has left many projects under selling pressure, even though measures like pancakebunny have been taken to reduce production, but the results are not good at the moment.
From DEX, lending, machine gun pool, leveraged mining and stable coin exchange, BSC has almost finished copying the products of the ethereum ecology, and it is estimated that it is difficult to produce refreshing products in the short term.
Investment is to cast expectations, if BSC cannot bring investors new expectations, it will naturally move to the next battlefield.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/earnings-plunge-lock-volume-loss-end-of-bsc-eco-early-dividends/
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