Original title: BNB DApp volumes down 25% in a week — Will BNB price follow?
Original author: Marcel Pechman
Original source: https://cointelegraph.com/
Compiled by: Mars Finance, Daisy
BNB price sees slight recovery, but will lackluster network activity and suboptimal Binance Launchpad results cap gains?
The native token of the BNB chain rose 4.1% between October 10 and 11, showing resilience after briefly testing the $555 support level. Since July, BNB prices have remained relatively stable despite a 15.6% drop in the broader altcoin market. This performance has solidified BNB's position as the third-largest cryptocurrency, with a market cap $15 billion higher than Solana.
Activity on the BNB chain has been declining, which could pose a threat to BNB prices. Over the past week, on-chain activity on the BNB chain has fallen by 37%, raising concerns among investors about the sustainability of BNB's recent outperformance. Traders are concerned that Ethereum's Layer-2 scaling solutions are gaining traction, especially after the launch of the Base network, which offers fast and extremely low-cost integration services with Coinbase, a leading US exchange and Web3 wallet provider.
It can be argued that the value of BNB is driven in part by Binance exchange offerings, including exclusive Launchpad access and trading fee discounts, which may have reduced the need to use BNB on the BNB chain itself. However, beyond network transaction fees, BNB is widely used in decentralized applications (DApps) across the ecosystem in areas such as trading, staking, yield farming, real-world assets (RWA), lending, Launchpads, gaming, and derivatives markets.
In order to assess whether activity on the BNB chain is indeed supporting BNB prices, it is key to examine important metrics such as on-chain deposits and network fees.
BNB Chain TVL and Fees (in BNB) Source: DefiLlama
Currently, the total locked value (TVL) of the BNB chain is 8.1 million BNB, which is not much different from two months ago. However, in the week ending October 7, network fees fell to the lowest level in more than four years. The accumulated fees in the period were 1,880 BNB, a sharp drop of 56% from the previous week.
The drop in fees was primarily due to a 25% drop in decentralized application (DApp) transaction volume on the BNB chain, which could pose a potential concern for BNB's price outlook. Poor performers included PancakeSwap, which saw a 25% drop in weekly volume, and Uniswap, which saw a 22% drop. In comparison, Ethereum's DApp transaction volume fell 9% during the same period, while Solana's on-chain activity decreased by 15%, according to DefiLlama.
Blockchain ranking by 7-day on-chain transaction volume (USD) Source: DefiLlama
Regarding deposits, Ethereum’s total value locked (TVL) is 19.2 million ETH, which is the same as two months ago. Meanwhile, the TVL of the Solana network surged to 40.9 million SOL, reaching a two-year high, reflecting a 26% increase over the past two months. Essentially, the activity of the BNB chain is slightly lagging behind its competitors, which does not support BNB’s recent outperformance in the broader altcoin market.
How sustainable is Binance Launchpad? One of the factors limiting BNB’s price gains is the growing criticism surrounding Binance’s listing fees. According to Arthur Hayes, co-founder and former CEO of BitMEX, token issuers are allegedly required to purchase and hold approximately $5 million in BNB and are required to give away up to 16% of the token supply.
Source: DefiIgnas
Ignas, co-founder of Pink Brains DeFi Creator Studio, suggested that Ethereum Layer-2 project Scroll could have issued its tokens through a decentralized Launchpool and allocated 5.5% of the supply to liquidity incentives. This approach could have boosted ecosystem activity and eventually prompted major centralized exchanges (CEXs) to voluntarily list the token. Ignas believes that paying for CEX listings rarely creates incentives for long-term holding.
Amid these criticisms, other market analysts have also expressed concerns about the poor performance of recent token launches on the Binance platform. In particular, Hamster Kombat (HMSTR), Catizen (CATI), and DOGS have seen significant price drops. According to ZerebusX, a user on the X platform, “This is not the Binance we are familiar with, nor is it the Binance that CZ hoped for.”
Therefore, the outlook for BNB price is affected by the lackluster BNB on-chain activity and the overall market sentiment towards Binance exchange services, including its Launchpad product.
