Growth Through the Bear Market

Despite the ongoing bear market, BNB Chain experienced more user adoption during this period as more users joined the network. But an area of concern around the BNB Chain ecosystem is its concentration and dependence on PancakeSwap.

Here are some key highlights from the second quarter:

Daily Active Addresses and Transactions:

After a downward trend in Q2, daily active addresses stabilized at 1 million per day in June. In context, this almost doubles last year's network activity. Over the quarter, 6.6% more addresses were created daily.

In contrast, average daily transactions declined by 17.3%, while total revenue declined by 35.8%. Daily transactions, however, stabilized at around 4 million in June, similar to one year ago. Moreover, the number of daily transactions spiked between May 11-14. The pattern indicates that Terra users migrated to BNB Chain to transact, and the chain also got a major push from the launch of Binance Bridge 2.0. 

Growth in daily transactions indicates gains in the network’s fundamental value and revenue generation.

A Decline in $BNB Circulating Supply:

BNB Auto-Burn replaced the quarterly burn to provide greater transparency and predictability. The burn program began in 2017 and has eliminated more 36.8 million $BNB as of the end of June. A deflationary mechanism combined with transaction activity supported $BNB values over Q2.

Total Value Locked: 

BNB Chain's TVL dropped 55% from $14 million at the beginning of the quarter to $6 million in Q2. This downturn, however, was confined to Decentralised Finance(DeFi) as there was growth in BNB Chain’s nascent Non-Fungible Token (NFT) and GameFi markets. 

The TVL of BNB Chain's most prominent protocol, PancakeSwap, dipped roughly at the same pace as the ecosystem. Meanwhile, PancakeSwap grew in dominance, suggesting a migration of TVL from smaller protocols.

Growth Strategies: 

In Q2, BNB Chain launched DeFi protocols like iZiSwap and Unbound Finance and continued to make strategic investments in protocols like OpenLeverage. Further, BNB Chain announced the MVB V Accelerator Program to help projects develop working products. 

The Emergence of GameFi: 

Collectively, the top three GameFi applications (Era7, X-World Games, and Binary X) on BNB Chain by the number of users and transactions have generated over 60,000 daily active users, up 35% from Q1 2022. In addition, the application's smart contracts generated $14 million, representing incoming value. 

Staking and Decentralization:

Besides the 21 active validators, BNB Smart Chain also introduced more inactive validators (called "Candidates") over the quarter. As a result of this Euler hard fork, the network will have improved reliability and redundancy. Redundancy, in this case, means that two candidate validators and 19 active validators will be selected every hour to join the consensus. BNB Chain's Nakamoto coefficient of 7 is within the industry median. 

NFT Sector:

In comparison with the top five L1s by secondary NFT sales volume, BNB Chain has established a strong position. NFT secondary sales (634%) and unique NFT buyers (716%) grew rapidly on BNB Chains, reaching levels seen on Solana and Flow.

“We believe the growth for BNB Chain NFTs in Q2 is a factor of the increased quality of the underlying projects, the impact of tools like Rareboard, and the clear indications from Binance and the BNB Chain team that they are taking NFTs more and more seriously,” Luke Rare, Growth Lead at Rareboard, told BSC News.

The NFT marketplace aggregator Rareboard was also selected for the BNB Chain MVB program in the NFT category.

Despite the market downturn, developers strengthened the BNB Smart Chain with the Euler hard fork and enhanced the BNB Beacon Chain with the Descartes upgrade. Through its evolving architecture, investment in its ecosystem, and deployment of ZK-rollups and sidechains, BNB Chain is providing additional value propositions to its users. 

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