Binance Research 2024 Semi-Annual Report: 6 Key Takeaways

Original title: Half-Year Report 2024

Author: Binance Research

Translation: Vernacular Blockchain

In 2023 After growing by 109% , the crypto market continued to rise in the first half of 2024, with the total market capitalization increasing by 37.3%. The growth was largely driven by a 60.2% gain in the first quarter of the year, before giving back some gains in the second quarter, with the market cap falling 14.3%.

The successful launch of a U.S. spot Bitcoin exchange-traded fund ("ETF") in January marked a pivotal moment for the industry and sparked a period of bullish sentiment and positive inflows. While the initial price reaction was muted, subsequent months saw strong gains as the market digested the impact of ETFs in attracting new capital, increasing investor accessibility, and strengthening the acceptance of cryptocurrencies as mainstream investments.

It’s worth noting that there were several narratives that gained momentum in the first half of the year – for example, points meta, restaking hype, memecoins mania, and airdrop season, to name a few. While some of these narratives may have died down, they were certainly strong drivers of on-chain activity and transactions in the first half of the year.

Looking ahead, we’ll be keeping a close eye on the Fed’s interest rate policy, the approval and progress of spot Ethereum ETFs, and watching for the emergence or resurgence of crypto-specific narratives by monitoring on-chain metrics. We recognize the structural drag from the large number of tokens set to be unlocked in the coming months and years and urge investors to conduct their own research. The good news is that over the past few months, many token valuations have corrected and returned to more reasonable levels.

The following is a summary of some key points of this report:

1. Layer1 & Layer2 of Public Chains

Layer1 ("L1") performed strongly at the beginning of the year, with Bitcoin's fourth halving, the launch of the Runes protocol, and the U.S. Spot ETFs have continued to gain market dominance following their approval (attracting over $14 billion in inflows to date). Ethereum went through a reset burst and EIP -4844 update, BNB chain continued to work on op BNB and Greenfield, while Solana excelled in the memecoin space and launched blockchain links ("blinks").

The first half of 2024 is the airdrop season in the Layer2 ("L2") field, especially zero-knowledge ("zk") projects. The promise of incentives attracted massive capital inflows into the L2 chain, bringing L2’s total value locked (TVL) to $43 billion, a 90% increase in just the first 6 months.

2. DeFi

2024 has seen a massive influx of capital into decentralized finance (“DeFi”), driving TVL year-to-date (“YTD”) growth by 72.8%, from $54.4 billion at the beginning of the year to $94.1 billion. This growth has benefited nearly all DeFi sectors, whether major or niche, prompting some protocols to bring original elements of finance on-chain that were previously unachievable.

3. Stablecoins

The stablecoin market has rebounded significantly and is currently only 14.5% below the peak before the collapse of TerraUSD (UST) in April 2022. The stablecoin market capitalization was $161 billion as of June 30, 2024, a two-year high. While Tether’s USDT continues to dominate, Circle’s USDC and Ethena’s USDe have also increased their market share.

4. NFT

The NFT market experienced turmoil in the first half of the year, with sales declining and floor prices of major projects falling by more than 50%. Blur continues to dominate, driven by the BlastToken airdrop, while Pudgy Penguins has seen some success with its physical toys. Bitcoin NFTs also continue to perform well.

5. SocialFi

SocialFi continues to develop, and the Lens protocol announced the upcoming launch of its zk chain, Lens Network. Farcaster's user growth continued after the launch of Frames, while friend.tech released their Token and v2. The Fantasy .top trading card game is also a notable highlight.

6. GameFi

The Web3 gaming sector performed strongly in the first quarter, but the market capitalization of gaming project tokens fell sharply in the second quarter along with other altcoin markets. Despite the price drop, user growth metrics are healthier than ever, with projects like Pixels and Hamster Kombat attracting large numbers of players through token airdrops.

Other areas of note include memecoins, artificial intelligence (“AI”) and decentralized physical infrastructure networks (“DePIN”). These sectors continue to receive strong interest from investors and the wider community in the first half of 2024.

7. Looking ahead to the second half of the year

As we enter the second half of 2024, we continue to be particularly interested in six key themes and expect significant progress in these areas throughout the year. These topics cover a variety of narratives and sectors, such as those related to the macro environment, the Bitcoin ecosystem, economic applications of ownership, real-world assets (“RWAs”), and more.

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