Cryptocurrency exchange Binance is going through a painful day around fear, uncertainty and doubt. The FUD around the exchange greatly influences all markets, not just the local token BNB price. So, will Binance and its token BNB be a new FTX and FTT event?
Is the world’s largest cryptocurrency exchange at risk?
cryptocoin.com As you follow, Binance came to the fore with the withdrawal of a large amount of money from the platform recently. In fact, due to this incident, he faced rumors of bankruptcy. These developments also negatively affected BNB, the token of the stock market. BNB lost nearly 24% in value during this period. Moreover, it has affected not only its own token, but the entire crypto market, including Bitcoin. Most cryptocurrencies fell massively with double-digit losses. So, this shakeup has ignited ripple effects in the crypto space.
That said, Binance, the world’s largest cryptocurrency exchange, has been resilient. This chain of events was largely considered a FUD, as it is a strong exchange and BNB is a little different than FTT. BNB is the native token of both BNB Chain and Binance exchange. FTT, on the other hand, was only the native token of the FTX exchange. There are also some other features that make Binance stand out from the crowd.
First, BNB Chain (BSC) is the world’s most used Blockchain with the second highest TVL. BSC also has more active users than Ethereum, Polygon, and Solana combined.
In addition, BSC is the Blockchain most used by the best NFT games. 9 of the top 25 NFT games are featured on BSC. So this makes it the most preferred Blockchain for crypto games.
Will Binance become a new FTX?
According to Nansen data, BNB has the 4th largest share in Binance reserves with 10.2% of the domestic token. In addition, BUSD takes the first place with 26.38%, followed by USDT with 21.61% and BTC with 14.94%.
- Pancakeswap, BNB’s largest DEX, has a TVL of $3.1 billion on Blockchain.
- Venus, one of the popular lending protocols, has a TVL of $1 billion on Blockchain
- Prominent DEX BiSwap has a $250M TVL on BNB Chain
- ApeSwap DEX has a $52M TVL on Blockchain
- Binance, as an exchange, has around 120 million users. Also this is the highest of all users.
- The exchange holds 75% of the CEX market share with $56 billion + reserves. It also survived stress tests, including over $10 billion in withdrawals last week.
- The popular exchange handled nearly $15 trillion in Futures volume this year alone. It also earned them an estimated $3 billion in fees from futures trading alone.
- The platform has a strong revenue stream and offerings such as Spot and Margin trading, which provide a revenue forecast of $20 billion in 2021.
In addition, the FTX exchange had a large number of loans that it took as collateral with FTT. This, combined with the lack of strong organic demand for FTT, and disclosures about abuses of FTX intensified its decline. Conversely, Binance does not have a loan with BNB as collateral. Also, the strong fundamentals of the token are not similar to FTT anyway.
Overall, the Binance platform has proven to be the largest and preferred platform. It also maintained its transparency with Proof-of-Reserves. Therefore, the platform may not suffer the same fate as FTX. Therefore, it is possible for the BNB price to recover in the coming days.