Binance Clears the Clouds! BNB Surges Above $500 After Two Years, Launchpool Boosting Momentum?

The platform token BNB of the largest cryptocurrency exchange Binance has returned to the $500 mark after a two-year absence, reaching a new high in nearly two years. It has surged by 27% in the past 7 days and over 60% in the past 30 days. While the rise of BNB is generally in line with the trend of Bitcoin prices, the recent consecutive Launchpool new coin mining on Binance may also be a significant driver for the surge of BNB.

BNB Hits Historical High of 690, 23% Away

BNB, the native token of Binance, also serves as the gas fee for the Binance Smart Chain (BSC). It reached a historical high of 690.93 in May 2021 during the DeFi Summer, NFT, and GameFi boom. Starting from November of the same year, it began to retrace. Throughout the long period from mid-2022 to early 2024, despite facing several significant industry events, BNB has consistently maintained a stable range of $200 to $300, becoming one of the most resilient cryptocurrencies in the market.

However, this trend changed at the end of February when BNB first broke through the $300 mark and continued to rise to $530 on March 11, just 23% away from its all-time high of 690.

BNB's Upsurge Trend Aligns Roughly with Bitcoin's

Comparing the upward trend charts of Bitcoin (BTC) and BNB:

It can be observed that BNB's upward trend roughly aligns with BTC, with significant surges slightly lagging behind BTC. There were larger price increases starting around 2024, especially in February when a sustained upward trend began.

Launchpool Boosts BNB Again, Focusing on L2 and Gaming Themes

During the bear and bull markets in 2019, Binance introduced the Initial Exchange Offering (IEO) platform called Launchpad, which promised investment in exchange for shares, ushering in a springtime for the overall crypto market. However, as the market gradually turned bearish and lacked themes and momentum, not all projects performed well.

In 2024, Binance's new coin activities seem to have shifted towards Launchpool, where rewards are obtained through staking. With the approval of a Bitcoin ETF and the upcoming Bitcoin halving, along with other significant bullish factors in the market, the continued market frenzy has gradually led to significant price increases for BNB.

Launchpool requires staking BNB and stablecoins FDUSD and TUSD, with 80% of the new coins allocated to BNB stakers. Each staking period involves approximately 14-15 million BNB tokens, with a market value of around $7 billion, and stablecoins worth about $2 billion.

As shown in the table, each project since 2024 has brought stable returns, making it a good investment for short-term investors. For long-term investors, the accumulated returns from holding BNB may also be substantial. Most staking periods of less than a week yield an annualized return of 70-200%; BNB started to rise gradually at the end of December 2023 and officially took off at the end of February 2024.

[Note: Short-term return rate calculation is based on the token's opening price * staked BNB share / BNB price * total staked BNB in Launchpool; Annualized return rate calculation is based on 365 days / number of days in Launchpool * short-term return rate.]

The new coin themes in Launchpool include AI, L2, and gaming. Results indicate that AI-driven themes are not the most favored in the crypto market. Instead, themes related to existing infrastructure that can quickly introduce concepts like "point system" and "anticipated airdrops," such as customized infrastructure projects like ALT and MANTA, as well as gaming blockchains like XAI and PIXEL, have gained traction.

New Coin AEVO Brings Highest BNB Surge

The ongoing Launchpool project AEVO, a decentralized derivatives exchange, announced on March 6, has led to a significant surge in BNB value, pushing it from 400 to 500 in less than a week.

The pre-market contract market opened by AEVO and the anticipation of airdrops have also contributed to the popularity of this Launchpool:

Binance Smart Chain Transaction Fee Revenue Growth

The purple portion in the following BSC fee revenue chart shows a significant growth in revenue starting from March 2024, increasing from tens of thousands of dollars per day to millions in recent times, possibly providing support for the recent rise in BNB value.

Furthermore, according to DeFiLlama data, BSC's on-chain DEX reached a trading volume of $24.74 billion on March 10, surpassing Ethereum and ranking first. Ethereum and Solana followed in second and third places, respectively. The more active on-chain trading activities may also be a crucial factor driving the continuous rise of BNB.

Are Platform Tokens Dead? BNB Seems to Have Resurged

BNB, as the earliest and arguably most successful exchange platform token, has experienced multiple cycles of market praise and skepticism, seemingly reaffirming its value and consolidating its market leadership this year.

Common concerns regarding platform tokens include:

• Limited market value sustainability due to trading fee discounts
• Securities concerns arising from exchange profit buybacks in the early days, sparking widespread discussions and regulatory attention

However, through Launchpool/Launchpad and various applications on the BNB Chain, BNB's extensive utility has dispelled the securities concerns and moved away from profit buybacks. Such platform tokens are no longer suitable to be labeled as such, as they integrate functions like blockchain gas fees, staking mediums, payments, and lending collateral, forming a vast "BNB ecosystem."

The mentioned use cases may only scratch the surface of BNB's price surge reasons, which have been present in the past. Binance has deeply rooted itself in startup investment incubation and marketing in recent years, evolving from just a trading platform to one of the major investment institutions. With over half of the overall cryptocurrency trading liquidity, its market influence remains significant. Strong exchanges tend to have strong-performing tokens during bull markets, so BNB's performance is not entirely surprising. The question that may arise next is how BNB will grow in this round of the bull market?

Despite facing significant pressure on BNB due to U.S. regulatory issues in the past, the future appears brighter. As the bull market revives, it is foreseeable that BNB will continue to secure its position as the fourth-largest cryptocurrency. Excluding stablecoin USDT, BNB ranks third in the market, following only BTC and ETH, making it one of the most widely used exchange-issued tokens.