With increasing regulatory pressure from Coin On and other global centralized financial (CeFi) service providers, the total lock-in value of the decentralized financial (DeFi) ecosystem on the BNB chain (formerly known as Coin On Smart Chain) has decreased by approximately $2 billion (TVL) since the beginning of the year. This decline has caused many problems
With increasing regulatory pressure from Coin On and other global centralized financial (CeFi) service providers, the total lock-in value of the decentralized financial (DeFi) ecosystem on the BNB chain (formerly known as Coin On Smart Chain) has decreased by approximately $2 billion (TVL) since the beginning of the year. This decline has caused many problems.
BNB chain TVL steadily decreasing
The decline of BNBChainTVL is reminiscent of the recent prediction by Coin An CEO Zhao Changpeng (CZ) that DeFi will surpass CeFi in the next bull market. CZ made this prediction at the "AskMeAnything" (AMA) meeting held on September 3rd, where he discussed the challenges the company faces and other regulatory issues related to the DeFi ecosystem.
However, despite Zhao's ambitious vision for the cryptocurrency market and Coin An's focus on decentralized finance, current data on BNBChain suggests that Zhao and Coin An's prospects are unsettling.
According to current data from DeFiLlama, BNBChain's TVL has decreased by $1.85 billion since the beginning of the year. On January 1, 2023, BNBChain's TVL was $4.65 billion, but it has now dropped to $2.8 billion. As expected, the decline in BNBChain directly affected the price of BNB. BNB suffered significant losses after filing a lawsuit with the US Securities and Exchange Commission (SEC), with trading prices currently fluctuating within a narrow range of $220 to $200.
The TVL of the DeFi protocol on the BNB chain is also decreasing
The decrease in BNBChainTVL is mainly due to the decline in protocols for ecosystem construction. In particular, the two leading DeFi protocols, PancakeSwap (CAKE) and Venus (XVS), built on the BNB chain, currently account for a significant portion of the total lock in value, with TVLs of $1.27 billion and $6084.6 million, respectively. In the past 30 days, the two have fallen by 1.52% and 7.18% respectively.
It is interesting that the third largest DeFi protocol based on TVL actually considers the "coin security pledge ETH" measured by Ethereum (ETH) rather than BNB chain. Therefore, by pledging ETH to earn passive income, investors only contribute value to the first chain because they use the structure of CZ.
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