Activity in BNB Chain Has Been Falling, and This Could Spell Trouble for BNB Price

Ochain activity for BNB Chain dropped by 37% over the past week, raising concerns among investors about the sustainability of the BNB recent outperformance.

BNB Chain activity has fallen by 37% over the past week, raising questions about the sustainability of BNB's recent outperformance. Traders are also keeping a close eye on the increasing adoption of Ethereum layer-2 scaling solutions, particularly after the launch of the Base network, which provides fast and ultra-low-cost integration with Coinbase, the top US exchange and Web3 wallet provider.

To gauge whether activity on the BNB Chain is indeed supporting the BNB price, we can examine key indicators such as onchain deposits and network fees.

BNB Chain total value locked (TVL) and fees, in BNB terms. Source: DefiLlama

Currently, BNB Chain's total value locked (TVL) stands at 8.1 million BNB, showing almost no change from two months ago. However, network fees dropped to their lowest level in over four years for the week ending Oct. 7. The accumulated fees of 1,880 BNB for that period mark a significant 56% decrease compared to the previous week.

Blockchains ranked by 7-day onchain volumes, USD. Source: DefiLlama

As for deposits, Ethereum's TVL is at 19.2 million ETH, remaining unchanged from two months ago. At the same time, Solana's network TVL has surged to 40.9 million SOL, reaching its highest level in two years and reflecting a 26% increase over the past two months. Essentially, BNB Chain activity has lagged slightly behind its competitors, which does not support BNB's recent outperformance against the broader altcoin market.

How sustainable is the Binance Launchpad?

Adding to the factors limiting the BNB price upside, there have been substantial complaints regarding Binance's listing fees. According to Arthur Hayes, co-founder and former CEO of BitMEX, token issuers are reportedly required to buy and hold⁓$5 million worth of BNB and give away up to 16% of the token supply.

As a result, the outlook for the BNB price is influenced by the subdued activity on BNB Chain and by broader sentiment toward Binance's exchange services, including its launchpad offerings.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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