Penta Lab Research Report Top 30 - BNB Chain - 24% potential for market value increase

Author: Penta Lab

The third largest public chain ecosystem continues to grow, opBNB and Greenfield promote large-scale adoption

Project name: BNB chain

Token: BNB

Current market value: 79 billion

6-month estimated market value: 98.3 billion US dollars

Room for upside: 24%

Penta ten-dimensional score: 77

Data as of: March 10, 2024

Download the complete research report: https://t.me/pentalabio 

Official website: pentalab.io

Binance + BNB ecology helps BNB chain become the third largest public chain. BNB chain’s TVL has increased by 57% year-to-date to reach US$5.5 billion, ranking third largest public chain after Ethereum and Tron. By splitting 706 protocols on the BNB chain, 10 of them have a TVL of more than 100 million US dollars. Except for Lista DAO, which is an exclusive single chain, the other protocols are multi-chain structures. Among them, PancakeSwap ranks first with a TVL of 2.1 billion US dollars. . Except for PinkSale, the remaining top ten TVL protocols are all lending or staking platforms. Judging from the TVL trend since the beginning of the year, except for Coinwind and B2 Buzz, which have negative growth, others have double-digit or triple-digit growth.

A total of 26% of the initial total supply of tokens has been destroyed, and the annualized deflation rate exceeds 4%. Through the real-time burning (Real Time Burning) system and the quarterly automatic burning (Auto-Burn) system, the total supply of tokens can be reduced. According to Staking Rewards and official data, as of March 6, 2024, a total of approximately 52.46 million BNB tokens have been burned through various burning plans, accounting for approximately 26% of the original total supply, with an annualized deflation rate of 4.225%. The current deflation is mainly driven by quarterly destruction, and because the block production speed is relatively stable, the deflation rate is most affected by the price of BNB.

Greenfield enhances the development experience and helps significantly reduce costs. Greenfield is designed for “popular, valuable data” to facilitate direct access by opBNB/BSC smart contracts. On opBNB, the gas limit will be increased from 100 million to 200 million, with the goal of achieving a throughput of 10,000 TPS. With the new EIP4844 and the data availability layer on Greenfield, the project team expects gas costs to be reduced by 5-10 times. In addition, opBNB L2 will develop from an L2 to "opBNB Connect" to support large-scale application chains. In less than three months, more than 480GB of active data has been stored, particularly in AI infrastructure and applications. By 2024, Greenfield will enhance the development experience (e.g. Greenfield executable, atomic updates, Payment Master (AA)) and middleware infrastructure (e.g. bundled services, data availability layer) to better meet data processing needs.

Valuation: We estimate that Pancake, the largest TVL contributor, will grow at 20% in six months, and Kinza will grow at the fastest rate. The six-month growth rates of Finance and Lista DAO are 80% and 70% respectively, and Coinwind and B2 have fallen back by 20% and 30% respectively. In this way, the TVL in six months is estimated to be 7.2 billion US dollars, which is a 29% increase compared to the current speed. The current BNB circulation market capitalization to TVL ratio is 14x, which is 1.3 standard deviations higher than the average 8.3x since 2021. We believe this is the market’s recognition of Binance, the largest exchange behind it, and the BNB ecosystem, as well as the recent incentive activities. Positive feedback. Based on the current circulation market value/TVL level of 14 times, the predicted deflation rate of 4% and the TVL growth rate of 29% in six months, we obtained a six-month target market value of US$98.3 billion, which has 26% room for growth compared to the current level. .

Main risks: Weak growth of TVL, Binance lawsuit, lower than expected incentive activities

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