Outflows from BNB Chain DeFi Ecosystem Reach $2 Billion in 2023
Despite regulatory scrutiny faced by Binance and other centralized finance (CeFi) providers, the BNB Chain (formerly Binance Smart Chain) has experienced nearly $2 billion in outflows from its decentralized finance (DeFi) ecosystem in 2023. Binance CEO Changpeng Zhao (CZ) had previously predicted that DeFi would surpass CeFi during the next bull run.
In a live ‘Ask Me Anything’ session on September 3, CZ discussed the challenges his company was facing, as well as regulatory matters related to DeFi platforms. However, the numbers associated with Zhao’s holdings in the BNB native token present additional obstacles for his vision of the cryptocurrency market and Binance’s success in the decentralized finance sector.
BNB Chain DeFi Protocols Experience Decrease in TVL
The data obtained from DefiLlama on October 7 reveals a loss of $1.85 billion in total value locked (TVL) for the BNB Chain since the beginning of the year. The TVL dropped from $4.65 billion on January 1 to approximately $2.8 billion at present.
PancakeSwap (CAKE) and Venus (XVS), the two leading DeFi protocols on the BNB Chain, hold a significant portion of the total value invested, with TVLs of $1.27 billion and $608.46 million respectively. Both protocols have experienced outflows of 1.52% and 7.18% respectively over the past month.
Interestingly, the third-largest DeFi protocol on the chain is “Binance staked ETH,” which measures its value in Ethereum (ETH) rather than BNB. This protocol generates value for the Ethereum chain, as investors utilize CZ’s structure while selecting ETH for staking and earning passive income.
BNB Price Analysis
BNB tokens have experienced a 13.8% loss in value since the beginning of the year. Starting at $246.66 on January 1, the current trading price stands at $212.62.
This decline in value has also affected the TVL metric, which is measured in USD by DefiLlama despite being invested in BNB. Additionally, there has been a decrease in the number of BNB tokens locked into the protocols since the start of 2023.
Hot Take: BNB Chain DeFi Ecosystem Faces Significant Outflows
The BNB Chain’s decentralized finance ecosystem is witnessing substantial outflows, with nearly $2 billion leaving in 2023. Despite Binance CEO Changpeng Zhao’s prediction that DeFi would surpass CeFi, these numbers pose challenges for both Zhao’s vision and Binance’s success in the decentralized finance sector. The leading DeFi protocols on the BNB Chain, PancakeSwap and Venus, have experienced outflows recently. Furthermore, the decline in BNB token value contributes to a decrease in total value locked (TVL) on the chain. It remains to be seen how these trends will impact the future of Binance and its involvement in DeFi.
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