BNB Chain’s Total Value Locked Surges with Latest Addition: Are We Just Scratching the Surface?

BNB Chain operates as a smart contract blockchain, compatible with the Ethereum Virtual Machine (EVM).

Impact on Total Value Locked (TVL)

According to DeFiLlama, the Total Value Locked (TVL) of Binance (BNB) Staked ETH, the leading liquid staking protocol on the chain, witnessed a 2.75% increase in the last seven days. At the time of reporting, the TVL stood at $582.76 million. Additionally, Stader, another liquid staking protocol on the network, experienced a 6.98% increase within the same period.

Implications

This surge in the TVL suggests that market participants have deposited more assets on the BSC, indicating a growing trust in the protocol.

BNB Chain attributed the introduction of liquid staking to the upcoming Beacon Chain sunset fork, scheduled for finalization in June. The integration aims to enable users to engage in DeFi activities without sacrificing asset utility. The LSDFi integration is slated to occur between April and early May 2024, allowing delegators to compound staking rewards and facilitating cross-chain migration between the BSC and BNB Beacon Chain.

Challenges and Opportunities

Despite the increase in assets staked, the overall TVL of the BSC saw a decline of 22.16% in the last 24 hours. Improved staking activity could lead to a reversal of this trend, potentially enhancing revenue for participants. However, stagnation in staking could adversely affect BNB Chain’s revenue, especially considering the revenue decline observed in April. Nevertheless, the full liquid staking integration expected before the end of May may positively impact revenue.

On the sentiment front, there has been a notable improvement. According to Santiment, the Weighted Sentiment, which was as low as -1.631 on April 20, has turned positive, indicating a less bearish perception of BNB compared to a week ago.

If sentiment continues to improve, it could lead to an increase in assets allocated to staking on BNB Chain. Conversely, a decline in sentiment may stall growth or even prompt participants to withdraw their assets. Additionally, on-chain data suggests a decrease in social volume, which could potentially impact demand for the cryptocurrency but does not necessarily correlate with network activity.