The BNB Chain, previously known as Binance Smart Chain, has experienced a remarkable turn of events amidst the global regulatory crackdown on Binance and other centralized crypto finance (CeFi) service providers. In 2023 alone, this decentralized finance (DeFi) ecosystem witnessed an astonishing outflow of $2 billion.
CZ’s prediction was revealed during a live ‘Ask Me Anything’ (AMA) session at X Space on Sept 3. In this open and forthright discussion, CZ tackled the challenges his company faces and explored the intricate regulatory landscape surrounding DeFi platforms.
Binance’s CEO, Changpeng Zhao (CZ), boldly predicted that DeFi would surpass CeFi in the upcoming crypto bull run. However, recent developments are challenging this forecast.
CZ, the head of Binance, is not only dealing with regulatory matters. The numbers linked to his significant holdings in BNB Chain’s native token, BNB, could potentially hinder both his vision and Binance’s success as they consider a shift towards the decentralized finance sector.
BNB Chain’s $1.85 Billion TVL Plunge: A Startling 2023 Reality
Data compiled by Finbold from DefiLlama on Oct 7 presents a concerning picture. The BNB Chain has experienced a significant loss of $1.85 billion in its total value locked (TVL) year-to-date (YTD). In the beginning, on Jan 1, 2023, the TVL stood at $4.65 billion but has now dropped to approximately $2.8 billion.
PancakeSwap (CAKE) and Venus (XVS), the two leading DeFi protocols on the BNB Chain, currently dominate the total value invested. PancakeSwap boasts an impressive $1.27 billion TVL, while Venus follows closely behind with $608.46 million. However, recent trends raise concerns as both platforms have experienced outflows of 1.52% and 7.18% respectively over the past month, signaling a decline in investor confidence.
The third-largest DeFi protocol by total value locked is surprisingly not using BNB, but instead opting for ‘Binance staked ETH,’ which is measured in Ethereum (ETH). This unconventional decision benefits the former chain as investors choose CZ’s structure and stake ether, resulting in passive income.
The BNB Chain faces significant challenges with massive outflows and regulatory pressures. CZ, the crypto billionaire and founder of Binance, has a vision of DeFi surpassing CeFi. However, successfully navigating these turbulent waters may require CZ and Binance to reassess their strategies.
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