BNB is now the second biggest DeFi chain with a TVL of $6 billion
Before its collapse, Terra was the second biggest DeFi blockchain. As it did, it exerted significant pressure on Bitcoin and Ethereum, knocking over every crypto vertical on its way down and exacerbating an already bearish market.
There was a silver lining for the BNB, for it replaced Terra as the second biggest DeFi blockchain in terms of Total Value locked (TVL), being second to Ethereum. BNB is also a prevalent chain as it has the second highest average daily unique active wallet activity (UAW) after WAX. Last year many blockchain verticals soared to new heights, and what goes up must eventually come down. While the downwards trend continues, many performance indicators are still orders of magnitude above their values at the same time last year. Finally, July is showing a glimmer of good news as the price of BNB is on the uptake.
PancakeSwap remains the most used DeFi dapp on the BNB chain with 246 thousand average daily UAWs users, being a significant reason for BNB’s success. Former leading games on BNB, such as Mobox and BombCrypto, continue to decline as they are replaced by SecondLive, the most popular game on BNB with thirty thousand daily average UAWs, and Era7 is the fastest growing game this quarter, growing by over 24,000%.
Table of Contents
- BNB Wallet Activity has dipped marginally since Q2 2021
- DeFi has been the hardest hit vertical by Terra
- Pancake Swap still is the most used Dapp
- NFT trading volumes have mooned since last year
- Play-to-Earn Games struggle as tokens devalue
- Road Ahead
BNB Wallet Activity has dipped marginally since Q2 2021
BNB chain has weathered the collapse of Terra better than most other chains having the second largest count of average daily UAWs at 462,418, slightly edged out by WAX with 502,707. BNB’s decrease from last quarter has been minimal, slipping by 28% since Q1. In terms of yearly performance, the decline has been even smaller, only 11% lower than Q2 of 2021.
DeFi remains the most popular vertical on the BNB chain with 301,955 average daily UAWs, followed by games with 113,530, and NFTs continue to form the minor fraction with only 10,928 UAWs.
All verticals have receded since last quarter, the most prominent being from games by 32%, DeFi by 28%, and NFTs by 25%. The year-over-year performance is, in contrast, much more positive. Game-related UAWs has grown by 387%, NFTs by 52%, and DeFi, unfortunately, has slipped by 36%.
DeFi has been the hardest hit vertical by Terra
Earlier this year, Terra held the number two spot by order of magnitude before the collapse. After Terra’s virtual departure from the industry, BNB has become the second biggest DeFi chain. Although Ethereum remains king of DeFi by a significant margin, BNB now sits proudly in second with a TVL of nearly $6 billion. Terra’s collapse has hit DeFi the hardest. The average decline TVL decline is 68% across the board since Q1.
BNB was one of the lesser affected chains losing 54% in TVL since last quarter, reporting a smaller loss than most of its peers in the industry. DeFi soared to new heights the previous year, and the year-over-year performance looks equally damning, with a 70% drop in TVL since Q2 2022.
Pancake swap continued to lead in the DeFi dapps in TVL, having $3.6 billion in its contracts. In a distant second place is Rest with $1.3 Billion, followed by Magic Eden with a TVL of $0.5 billion and Alpaca Finance with $0.4 billion. The final two places are taken by Elipsis Finance and ApeSwap, having $89 and $80 million, respectively.
Overall, DeFi has become very competitive since the beginning of this year, and many dapps will be fighting to fill the void left by the collapse of Terra.
Pancake Swap still is the most used Dapp
BNB chain owes this relative success to the performance of PancakeSwap, which remains the most used dapp with over 246 thousand UAWs in Q2. Other popular dapps in terms of average daily UAWs include Biswap (5,802), Bitkeep Swap (5,534), ApeSwap(4,391), and 1-inch Network (4,010).
NFT trading volumes have mooned since last year
BNB still attracts many game-related UAWs, comprising 10% of all game-related NFTs. At the end of Q2, BNB has 113,326 gaming AUWs, being edged out by Hive with 283,934 and WAX being the number one gaming blockchain with 393,933 UAWs. Despite the 32% reduction in gaming activity from the last quarter, the year-over-year performance is still impressive, up by 387% since Q2 of 2021.
The depreciation of the BNB coin has drastically affected the trading volume for game-related NFTs. The growth since last year for this vertical has been nothing short of astronomical.
Both year-over-year trading volume and NFT transactions count are up several thousand percent; 8555106% and 42700% !!!
The trend is very similar for overall NFT trading on the BNB chain. Compared to the last quarter, the trading volume has decreased by 22% since last quarter while the sales count has remained on par with only a 4% dip. Compared to other chains, these results look very favorable as the average reduction was 33%. A significant gain on smaller chains offset this average. It should be noted that many larger chains, such as Ethereum(-40%), Flow(-71%), and Polygon(-59%), suffered substantial losses since the last quarter.
Compared to Q2 of last year, the sales are booming with an increase of 670% in trading volume and 859% in sales count. NFT collectibles follow the same trend. Trading volume receded by 22% since last quarter, but sales count grew by 4%. The year-over-year growth likewise has mooned to 4420% for trade volume and 16301% in sales count.
Play-to-Earn Games struggle as tokens devalue
Games are the second most crucial vertical for BNB, contributing 25% of all on-chain activity.
As mentioned above, the depreciation of the BNB coin has extrapolated into the devaluation of many gaming tokens. For many play-to-earn games, it has not been a good sign, as the prices of tokens are intrinsically linked to play-to-earn mechanics. This devaluation killed fundamental interest in playing those games. Such has been the case for previous Mobox and BombCryto, which have suffered after the Terra collapse. Bcoin has deflated by 86%, which led to BombCrypto activity dropping by 71% since Q1. Mobox is still the most consolidated option and fared a bit better with a drop of 33%, even though Mbox dropped by 65%. Mobox is still among the top 15 most played games in the entire industry.
Era7, a hybrid card, and turn-based-battle game, has picked up the slack and storms ahead every month. It has grown by 24481% since Q1.
In terms of overall popularity, SecondLive, the virtual free-roaming social game, is the most popular, with 30,492 average daily UAWs. Mobox is in second place with 19,407, followed by X world games with 13,126 UAWs. Era7 and BombCrypto take the last two spots with 7,897 and 7,294, respectively.
Terra and the downfall thereof have significantly impacted the rest of the industry. When Terra was riding, it ousted BNB as the second most prominent blockchain for DeFi dapps; however, after the collapse, BNB resumed its former place. The issue is that Terra has torn a gaping in the market and sucked many of them from other chains. BNB has lost 54% of its TVL since last quarter. Despite the loss, BNB is performing better than most other chains, which have lost 68% on average. The relative success of BNB rests primarily with PancakeSwap, which became the most used dapp last year and connected to dominate the market with over 2.1 million unique users over the previous 30 days.
The results follow the same trend for many other verticals with various fluctuations. Despite the setback, BNB has grown substantially over the past year and is still significantly above the milestones set in the quarter of last year. For example, NFT transactions are up 859%, while volumes are up by 670% since Q2 of 2021.
Having such resilience compared to other smaller chains puts BNB at an advantage as it is more likely to recover and recover faster than its competitors, who have suffered more debilitating blows. We already see signs of recovery as the BNB coin began to recover in late July, up by 28% since July 1st at the time of writing.