The BNB Smart Chain (BSC) saw a mixed performance in the second quarter (Q2) of the year as the broader cryptocurrency market cooled off following a strong price surge in March. BNB, the native token of the BSC, remained mostly flat, dropping 5% quarter-over-quarter (QoQ). Meanwhile, the network’s key metrics revealed a combination of positive and negative trends.
Binance Smart Chain (BSC) Revenue Decline
According to a recent report by market intelligence platform Messari, the BNB Smart Chain’s revenue, which measures the total fees collected by the network, plunged 28% QoQ to $48.1 million in Q2. However, it was only down 8% year-over-year from $52.4 million in Q2 2023. This decline was largely driven by the decrease in BNB’s price, as revenue in the network’s native token terms dropped 51% sequentially from 165,100 BNB to 81,300 BNB.
The report also highlighted a reduction in network activity. Average daily transactions decreased by 10% QoQ to 3.7 million, and average daily active addresses dropped 18% QoQ to 1.1 million. This downward trend was not unique to BSC, as on-chain activity decreased across most smart contract platforms in Q2 following a robust Q1.
Despite the overall decline, user preferences within the BSC ecosystem showed notable shifts. Decentralized exchange (DEX) Uniswap experienced a significant increase in daily transactions, up 630% QoQ, while the previously dominant PancakeSwap saw a 46% QoQ decrease.
Staking Surges Amid TVL Drop
The Messari report also noted a 30% QoQ increase in the total BNB staked, reaching 30.4 million BNB. The total dollar value of staked funds increased by 24% to $17.7 billion, ranking Binance Smart Chain as the third-highest Proof-of-Stake (PoS) network by staked value. However, it still lags behind the Solana blockchain by a significant $38.4 billion.
Conversely, the BSC’s decentralized finance (DeFi) ecosystem saw a decrease in total value locked (TVL), down 24% QoQ to $5.5 billion. This decline was primarily driven by a 41% QoQ drop in borrowing on the DeFi protocol, Venus Finance. Messari attributes this overall decrease in value locked to the drop in BNB’s value, which closed the quarter at $567 after reaching an all-time high of $722 in March.
Despite these fluctuations, Binance Smart Chain maintained the third-highest DEX trading volume during Q2, with $66 billion in total volume, trailing only Ethereum (ETH) and Solana.
BNB Price Analysis
At the time of writing, the BNB token was trading at $586, up over 2% in the last 24 hours. However, trading volume in the last 24 hours was down 3% to $830 million, according to CoinGecko data. Since Friday, the token has been consolidating between $570 and the current trading price. This follows the lead of the largest cryptocurrencies in the market, after a failed attempt on Monday to break through its nearest resistance at $590, which is the last barrier preventing a move upwards to the $600 milestone.
Conversely, for BNB bulls, the key level to watch is the 200-day exponential moving average (EMA) noted on the daily BNB/USDT chart. The yellow line, positioned just below the current price, could act as a critical support for the token, potentially preventing further declines.
Conclusion
In summary, the second quarter of the year presented a mixed performance for the BNB Smart Chain amid a cooling cryptocurrency market. While BNB’s price remained relatively flat, key metrics like revenue and network activity showed declines. However, there were also positive trends, such as the increase in staked BNB and shifts in user preferences within the BSC ecosystem. Despite the challenges, Binance Smart Chain continues to be a significant player in the cryptocurrency market, maintaining high DEX trading volumes and staking values. As the market evolves, the performance of BSC and its native token BNB will be closely watched by investors and analysts alike.
