Disclaimer: Nansen has produced the following report as part of its existing contract for services provided to BNB at the time of publication. While BNB has the right to review and provide feedback to Nansen, Nansen maintains full editorial control over the publication of this report. All views expressed are the independent opinions of Nansen's research analyst(s) who are the author(s) named in this report. This report is intended for informational purposes only and does not serve as investment, financial, professional, or other advice. For more information, please refer to the disclaimer at the end of this report, as well as our Terms of Service.
Overview
BNB Chain (formerly known as Binance Smart Chain or ‘BSC’) was launched in September 2020 to provide an alternative smart contract platform to the increasingly expensive Ethereum mainnet. BNB Chain is an independent blockchain that works on a Proof of Staked Authority (PoSA) consensus mechanism (where participants stake BNB to become validators). It is also compatible with the Ethereum Virtual Machine (EVM), meaning it could leverage pre-existing Ethereum tooling which contributed to its enormous growth.
BNB Chain was created as a scalable infrastructure to handle a large number of low-cost DeFi transactions without compromising speed. It also aims to deliver programmability and smart contracts to developers who want to launch their tokens on the BNB Chain network.
To date, there are hundreds of projects on the BNB Chain, with notable mentions of PancakeSwap, CryptoBlades and CryptoMines. BNB Chain is the most used chain in terms of transactions and unique wallet addresses.
Key Developments:
- Binance Smart Chain (BSC) rebranded to BNB Chain. This is because the smart contract platform intends to extend far beyond Binance. BNB stands for ‘Build and Build’.
- BNB Chain’s $1b ecosystem fund has been highly active, funding numerous projects to grow out and improve the ecosystem.
- BNB Beacon Chain v0.8.3 Release with various bug fixes.
- Launch of 4th ‘Most Valuable Builder’ program. This is named ‘MVB IV: MetaFi - Smarter DeFi for the Web3 Universe’.
On-chain overview
Daily Transactions
As can be seen in the Nansen Data, both transactions and gas have slowly declined in 2022 after peaking in Q4 2021. This makes sense, as general on-chain activity has decreased as the market has turned increasingly bearish/sideways at the start of 2022.
Transactions: Ethereum vs BNB Chain
BNB Chain is the most active smart contract blockchain by number of transactions, even dwarfing Ethereum. Although transactions have fallen slightly over Q1 (which can be explained by general reduction in on-chain activity), it remains ~3-6x that of Ethereum, peaking at 8 million transactions in early Jan. Although some of this can be attributed to bot activity, BNB Chain remains a popular chain with retail who have been priced out of Ethereum.
Daily Gas Paid vs Ethereum
The data shows that total gas paid on the BNB chain is significantly lower compared to Ethereum. It is much cheaper and faster to conduct transactions on the BNB chain, however the network is also a lot more centralized than Ethereum. The daily gas paid in USD for both chains has been falling consistently since the beginning of the year. Both chains recorded their lowest daily gas paid (for Q1) within a day difference. Ethereum’s lowest daily gas paid hit around $6.6m on the 12th of March, while BNB recorded its lowest on the 13th of March hitting a quarterly low of $1.3m. It is important to also remember that BNB has significantly higher daily transactions compared to Ethereum.
As mentioned previously, PancakeSwap continues to dominate the log occurrences, amounting to 22% of all transactions on the chain. Notable mentions in the ecosystem during Q1 include Bomb Crypto and Star Sharks which are both gaming related applications.
Stablecoins: Daily On-Chain Volume
The Daily Stablecoin volume in a chain is another important metric that can be used to assess the activity and adoption taking place in that network. As the adoption of a chain grows, so does the amount of the daily on-chain stablecoin volume, as stablecoins are a fundamental component that facilitates token transactions. The graph above shows the daily on-chain volume for USDT, DAI USDC, BUSD and TrueUSD on the BNB chain. It can be seen that the daily on-chain volume has significant variations for the different stablecoins available on the chain. USDT and BUSD account for the majority of the activity, followed by USDC, DAI and True USD. On March 27th for example, the stablecoin with the highest on-chain volume (USDT) had around ~290x the on-chain volume of the lowest one (TrueUSD).
USDT has recorded the highest daily on-chain volume for this quarter and continues to dominate. It recorded its maximum daily on-chain volume on the 25th of Feb (just over $3.8b on the day), compared to a maximum of $2.6b for BUSD and $714m for USDC. The dominance of the different stablecoins has remained roughly the same throughout the quarter with USDT and BUSD competing for the top place, followed by a USDC.
Stablecoins: Daily Active Senders
By further analyzing the Daily Active Senders for the different stablecoins, it can be confirmed that USDT is the highest circulating stablecoin, followed closely by BUSD. There is a significant gap in the number of daily active senders between these two tokens and all the other stablecoins on the chain. BUSD was the preferred stablecoin up until the beginning of Feb, but since then it has lost that place to USDT. BUSD saw its user base decrease from a peak of 173k daily active senders to about 91k. Roughly in the same period, the number of daily active senders for USDT increased from a low of 96k (at the start of the year) to around 135k by late March. The adoption of the two least popular stablecoins on the chain, namely DAI and TrueUSD, has roughly stayed constant this quarter. The number of daily active senders for DAI has been hovering around the low thousands while for TrueUSD it has been in the low hundreds.
Ethereum Smart Money Segments on BNB Chain
The chart above shows a breakdown of the Smart money addresses that are active on the BNB Chain as a proportion of the segments in Ethereum addresses. They have been categorized based on the type of smart money. If you are not yet familiar or need a refresher on what the different labels mean, please follow this link here for the specific definitions. The majority of the smart money segments fall under stakers or liquidity providers, this can be explained by the high APYs available on the chain for such activities. It is then followed by NFT segments given the high growth of NFT activity on the chain lately. Funds are a smaller segment with 17.5% overlap.
Conclusion
Binance Smart Chain’s rebrand to BNB Chain, short for ‘Build and Build’ Chain, combined with its $1bn ecosystem fund is a strong message of its ambition to become a leading smart contract platform. The most used chain by daily transactions, BNB Chain’s activity has generally mimicked that of the overall market in Q1 - with a general decrease in activity. However, the BNB Chain ecosystem fund has been highly active investing in new projects to build out the ecosystem further. We are excited to see what Q2 brings for BNB Chain, with the BNB Beacon Chain Mainnet Descartes upgrade already announced.
