Research View - Leap year: is an alt-season about to start?

In February, the total market cap decreased slightly from $255 billion to close at $249 billion, with Bitcoin’s dominance decreasing to the 63-64% territory. The first half of February was marked by a steady increase (in the total market cap) to above the $300-billion mark, followed by subsequent dips in the second half of February.

Aggregate spot exchange volumes were up from last month, with a +69% increase in daily average volume. In the second week of February, BTC price broke through the $10,000 mark, reaching a high of $10,453, before retreating below $9,000 toward the end of the month. BTC price volatility also increased slightly compared to January, with 6 days posting intraday movements greater than $500.

Perhaps the main finding is that Bitcoin’s trading dominance on Binance moved from 40% to 27% in February, one of its sharpest month-over-month changes. If this trend were to continue, it would signify a greater appetite for altcoins from market participants.

In Binance derivatives markets, not less than 13 new contracts were added to the platform. The total cumulative open interest on Binance Futures was around $322.8 million, as of February 29th.

An Ethereum hard-fork is scheduled for July, introducing ProgPoW (Programmatic Proof of Work). It would add a consensus algorithm change, targeting to improve ASIC-resistance and favor miners relying on GPUs. However, it is currently spurring controversy in the Ethereum community, and a hard-fork could lead to composability issues related to its active DeFi space and for stablecoin issuers (e.g., BUSD, USDC).

In February, we also saw BUSD getting its first move in the DeFi space with its introduction in Curve.Fi, along with various DEX aggregators (e.g.,

As of March 4th, the circulating marketcap of BUSD sat just below 80 million, ranking in the top 100 of circulating marketcap valuations. In addition, the BUSD zero maker fee promotion was extended until June, making it possible to fully go on-and-off crypto without any fee.

Hackathon from ETH Denver (2020)

The top event of the month was ETHDenver, with many hackathon projects on Ethereum building various projects. Many of them highlighted Ethereum’s pending switchover to Proof-of-Stake and the composability of smart contracts built on top of each other.


Amongst them, our team wishes specifically to highlight the following 9 projects from ETHDenver:

  • Die Kitty Dai: a multi-coin game at improving the interoperability amongst Ethereum-based games. In this case, it takes CryptoKitties NFT tokens while embedding DAI rewards in a new multi-faceted game.

  • Endaoment: a grant system that redirects interest earned on deposits to selected recipients, thus allowing DAO participants to use interest-bearing assets as pledges to create “no-loss” DAOs.

  • ERC-20-powered paywalls.

  • KettleCorn: a tool to anonymize ETH 2.0 deposits, making it easier for ETH holders to securely participate in ETH 2.0 validation.

  • Ledger Locker: a pluggable protocol enabling interest-based business models for smart contract services.

  • Lend721: a protocol to support loans backed by NFTs, increasing access to capital to individuals with illiquid assets.

  • Meta-Credits: a product utilizing meta-transactions to sponsor gas fees for first-time smart-contract users.

  • RAD: a reputation system for quantifying decentralized user participation.

  • Warpy: a decentralized Venmo that targets DeFi and enables interest payments.

Flash loans stole the spotlight.

Concurrently, flash loans stole the spotlight after they enabled two significant attacks, resulting in significant profits ($360,000 in ETH and $630,000 in ETH) from the opportunistic trader.

The concept of flash loans is leveraging the smart contract functionality of Ethereum. With decentralized finance (DeFi for short), users are able to programmatically lend and borrow tokens on-chain via overcollateralized lending protocols, such as dYdX, Compound, and Aave (LEND).

However, new features in dYdX and the Aave Protocol allow users to be able to borrow funds with no collateral, for a fee, provided that they are able to return the borrowed capital fully to the contract it borrowed from within the same block, hence the name “flash loan”.

This allows users to look for arbitrage opportunities on-chain without needing to supply capital and allows the collateralized lending pools to add an additional source of income to lenders. In theory, this levels the playing field between regular users and large whales to make large trades. Owing to the atomicity of such trades, the execution fails if not all parts perform as intended, putting only the gas fees at risk.

In this particular case, the flash loans enabled a decentralized user to manipulate on-chain price feeds for another portal, Fulcrum by bZx. The user first flash-borrowed a lot of capital (ETH), which was then used to obtain levered positions on illiquid assets (WBTC, sUSD), via Compound and Fulcrum, and then used remaining capital from the flash loan to manipulate the illiquid tokens’ momentary quoted value all within the same block.

Finally, the user subsequently closed a position held on Fulcrum/paid back the outstanding debt on Compound in each instance, thus cashing in on the manipulated price before finally paying back the flash loan with profit to spare.

Views from Binance Trading

This section has been prepared by Binance Trading, one of the world’s most liquid OTC desks for cryptocurrencies and digital assets. The content reflects solely the views of the team from Binance Trading.

If you wish to trade large volumes with an efficient settlement procedure and competitive quotes, join the Binance Trading channel on Telegram or send an email to


A rise, correction, and fall, all in one month!

February was quite the roller coaster ride, even in terms of the normally volatile crypto markets. Bitcoin started the month at $9,300 before reaching $10,400 highs and closed the month at $8,600. While BTC did show some big price swings, what was more impressive was how BTC dominance fluctuated, starting at 66% before dropping all the way down to 61% by mid-February, and closing the month at 64%, showing a strong month in general for altcoins.

Coinciding with BTC’s price increase at the beginning of the month, the desk saw some of its highest buy flows in recent months during this time. Flows were not just BTC related, as alts across the board picked up significant steam with traders, perhaps buying in to chase rallies. When BTC reached 10k on February 9th, the tide seemed to turn a bit with flows cooling off. Buy-sell flow ratios evened out, and traders seemed more cautious in general compared to the start of the month.

On Feb 10, BTC dropped below 10k before rebounding on Feb 12. This was the second time in the month that BTC reached 10k, and this time, the desk saw strong sell flows, especially for high to mid-cap alts. This was around the time BTC dominance dropped to a months-long low (61%), and with the dip below 10k just a day or so prior, traders looked to be taking profits.

This trend largely continued until the final third of the month when BTC saw a plunge to $8,600. The desk saw strong buy flows/requests for BTC when prices were between $8,800 and $9,500, but it was not enough to hold off the bears. Although the markets have seemed to turn bearish, at least in the short term, amidst a growing worldwide pandemic and large scale corrections in equity markets, over 75% of users in our Trading Telegram channel still remain long-term bullish on BTC, based on information such as its hashrate reaching ATH and its upcoming halving.

Crypto spot markets

Table 1 - Overview of the largest assets by market cap (EOM - February 2020)



Monthly price change (%)

Average daily Binance volume (USDT)

Monthly avg. volume change (%)

Marketcap (EOM - USD)



581.2 M


156.9 B



248.9 M


24.2 B



103.7 M


10.1 B

Bitcoin Cash


90.5 M


5.6 B



77.1 M


3.8 B



93.9 M


3.0 B



74.1 M


3.3 B



18.8 M


1.2 B



30.3 M


1.2 B



13.9 M


1.2 B

Table 2 - Monthly top 3 gainers on in February 2020


Monthly change (%)




Table 3 - Monthly top 3 losers on in February 2020


Monthly change (%)




In previous reports, we defined Bitcoin trading dominance, such as:

Sources: Binance Research.

Chart 1 - Bitcoin monthly trading dominance on

Monthly trading dominance

Sources:, Binance Research.

With last month’s upswing in altcoin trading, the trading dominance of BTC has fallen to 27.26%, a level not seen since June 2019. The lead driver of this February rally was ETH, with a total monthly volume increase of +158.6% (despite February being shorter), followed by XRP, ETHBEAR, LINK, BNB, XTZ, and LTC.

Table 4 - New asset listings on February 2020



Pair asset(s)

Listing date

LTO Network


February 6th



February 21st



February 25th

3 new assets were listed on the platform in February 2020.

Meanwhile, Binance USD (BUSD) continues its expansion with 23 new pairs being added in February.

On-chain markets on Binance DEX


In February, Binance DEX displayed minor activity with only 1 new pair being listed: ETH/BUSD. As a result, BUSD had total of 5 pairs available on Binance DEX, at the end of February.

As of February 29th 2020, Binance DEX offered 123 pairs for trading.

Table 5 - New DEX stablecoin pairs in February 2020



Pair asset(s)

Listing date

Ethereum BEP-2


February 17th

Chart 2 - Daily volume on the Binance DEX since August 2019 (USD million)

Daily Volume DEX

Sources: Binance DEX, Binance Research.

As illustrated in chart 2, the daily volume in February on the Binance DEX remains quite low, with a median of $1 million, an increase of +0.2 million in the daily average volume.

Chart 3 - Top pairs’ contribution to the total volume on Binance DEX in February 2020

Contribution top pairs to Volume DEX

Sources: Binance DEX, Binance Research.

NEXO was the most traded asset on Binance DEX in February, representing 20% of the total volume of the Binance DEX. Meanwhile, VRAB and AVA were the only two other assets with a respective trading contribution to the total volume superior to 10%.

Derivatives markets


Following a strong start in January, Binance Futures continued to expand its product offerings with 13 new pairs added, increasing its total crypto-futures offerings to 24 contracts.

Table 6 - New product offerings on Binance Futures in February



Maximum Leverage

February 3rd


February 4th


February 5th


February 6th


February 7th


February 10th


February 11th


February 12th


February 13th


February 14th


February 17th


February 20th


February 21th


Sources: Binance Futures. Data as of February 29th.

Binance Futures concluded the month with $77 billion traded across its perpetual contract markets, 37.5% higher from the previous month. The platform recorded one its highest single-day volume, with over $4 billion worth of perpetual contracts traded. On average, Binance Futures processed over $2.6 billion worth of trades in February.

Total volume across altcoin perpetual contracts increased by 160% from $12.6 billion to $32.8 billion in February. During the month, daily volume across altcoin markets averaged at $1.1 billion, an increase of almost 300% from January.

Chart 4 - Daily volume traded on Bitcoin perpetual contracts (in USD million)

Daily Volume BTC perpetual

Sources: Binance Futures. Data as of February 29th.

Chart 5 - Daily volume traded across large-cap altcoin perpetual markets (in USD million)

Daily Volume Altcoin markets

Sources: Binance Futures. Data as of February 29th.

Total open interest on Binance Futures grew 18% from $272 to $322 million in February. Its open interest broke the $400 million mark and peaked at $450 million in mid-February. Open interest in BTC/USDT perpetual markets continues to dominate, contributing 60% in total. Overall, the cumulative open interest across altcoin perpetual markets has grown from USDT 75 million to USDT 133 million - a 76% month-on-month expansion.

Chart 6 - Open interest on BTC and altcoin perpetual markets in February (in USD million)

Open Interest BTC/Altcoin

Sources: Binance Futures. Data as of February 29th.

With the addition of 13 new pairs, Bitcoin’s open interest dominance continued to decline throughout February, reaching a new low of 55%. As of February 29th, Bitcoin’s open interest dominance stood out at 59% (vs. 73% as of 31st January).

As a reminder, it was defined as follows.

Chart 7 - Bitcoin’s open interest dominance in February

Open Interest BTC dominance

Sources: Binance Futures, Binance Research.

Sentiment on Binance Futures remains bullish as traders continue to pile on long positions throughout February. Binance Futures’ Long/Short ratio climbed to its highest of 1.7x despite the recent selloff in crypto-markets.

Chart 8 - Long/short ratio (daily) in February 2020

Long/Short ratio

Sources: Binance Futures. Data as of February 29th.

Borrowing and lending markets

Borrowing and lending markets remained extremely active in February.

As of February 29th 2020, 29 assets supported were supported for margin trading on Binance. For a list of all supported assets and trading pairs for margin trading, please refer to the website.

Two fixed lending products were also offered in February: BUSD and USDT.

BUSD’s support in the margin trading space continues with the addition of 9 margin pairs in February: BNB, ETH, ETC, TRX, ADA, BCH, EOS, XRP, and LTC.

Staking markets

Staking markets are essential from the perspective of all crypto-participants, as illustrated in our recent report as they can bring additional returns for long-term holders.


Binance Staking offers passive rewards for many cryptoassets supported by Binance.

Staking yields vary greatly amongst stake-able assets, with expected yields ranging from 1% (NEO) to as high as 20% (ALGO). Rates also differ from month to month, so please check the full list of individual product pages.

Binance Staking provides zero-fee staking rewards, allowing users to get access to high yields, with the added capacity of being able to trade cryptoassets.

To learn more about Binance’s staking offerings, please visit the Binance Staking’s page.

Chart 9 - Expected yields (%) for assets supported for staking on

Yields Staking on Binance

Sources: Binance Staking, Binance Research.

As of March 2rd 2020, staking services are currently supported for 16 cryptoassets, with one new asset being added in the month of February: Lisk (LSK).

Notably, yields for Cosmos (ATOM) nearly doubled to 6.12% APY, up from 3.33% implied APY from the last payout period.

Tezos (XTZ) yields also remained north of 7% for the second straight period, making Binance the highest-yielding exchange baker and the only fee-free exchange baker, ahead of the likes of Kraken (7%), Coinone (10%), OKEx (18%), Coinbase (25%), and (28%) (data courtesy of MyTezosBaker).

LOOM’s staking yield also came in at 6% APY, higher than what users would be able to get with a 2-week lock on-chain (5% APY).