In late December 2024, the on-chain funding and ecological narrative surrounding BNB Chain was once again brought to the forefront: on one hand, its TVL, daily active users, and contract interaction data maintained high levels amidst multi-chain competition; on the other hand, new and old narratives such as derivatives, restaking, and RWA began to intensively overlap on this chain. With the cross-chain deployment of emerging derivatives protocols like Hyperliquid and Aevo, as well as BNB itself consistently ranking among the top four in market capitalization, BNB Chain is gradually transitioning from a "exchange-affiliated public chain" to a "multi-narrative infrastructure." This article dissects the true structure and long-short game logic of the trillion-level funds on this chain based on on-chain data and the distribution of ecological projects.
On-Chain Fundamentals: The Underlying Support of TVL and Activity
● TVL and Market Capitalization Structure:
● Research Brief shows that BNB Chain currently has an on-chain locked value of hundreds of billions of dollars, consistently ranking in the first tier of mainstream public chains, second only to the Ethereum ecosystem, and far exceeding most new public chains. Comparing its BNB market capitalization, which has long been in the top four globally, it can be seen that there is no extreme divergence between BNB Chain's on-chain TVL and asset market value, indicating that the capital accumulation is relatively matched with the asset scale.
● Among these, DEXs, lending, synthetic assets, and derivatives protocols contribute the vast majority of the TVL, with the top protocols accounting for over 60% of the locked value, presenting a concentrated structure of "obvious long tail and strong head."
● Active Addresses and Transaction Volume:
● The number of daily active addresses on BNB Chain has long maintained in the millions, placing it at an absolute high compared to other EVM public chains; the average daily transaction count also remains among the top globally, demonstrating strong user interaction demand.
● Research Brief mentions that during multiple market volatility windows, BNB Chain's daily transaction volume often experiences asymmetric amplification, meaning that during downward fluctuations, on-chain trading and liquidation activities significantly increase, mostly related to leverage and derivatives operations, which aligns closely with its "transaction-driven public chain" nature.
● Fee and Gas Structure:
● BNB Chain's average gas cost is significantly lower than that of the Ethereum mainnet, maintaining a low single-digit cent level during most periods, making high-frequency trading and small interactions economically viable.
● During peak periods, total on-chain gas consumption remains controllable, without the fee chaos seen in the early Ethereum bull market due to congestion; this structural advantage provides a stable foundation for quant and high-frequency strategies to be implemented on-chain.
The "fundamentals" of BNB Chain lie in: high TVL + high activity + low-cost trading, forming a soil suitable for the growth of leverage, derivatives, and complex combination strategies, providing space for various new narratives to overlap on the same chain.
Derivatives and High-Frequency Leverage: A New Round of Funding Machines
● Concentration of Contracts and Perpetual Protocols:
● Research Brief emphasizes that the TVL share of contract protocols on BNB Chain ranks among the top in the entire chain's DeFi TVL, especially perpetual contracts and leveraged trading protocols, which have absorbed a large amount of margin assets collateralized by BNB, BTC, and ETH.
● Among emerging derivatives platforms, some projects have achieved hundreds of millions in TVL growth shortly after deploying on BNB Chain, driving frequent on-chain liquidation and capital arbitrage activities.
● Capital Structure and Risk Appetite:
● In terms of capital composition, a high proportion of the funds participating in BNB Chain derivatives trading consists of professional trading and quantitative funds, which tend to:
● Use multi-asset collateral (BNB, stable assets, mainstream blue chips) to improve leverage efficiency;
● Shuttle between BNB Chain and other public chains/centralized platforms for arbitrage.
● The commonality of these funds is high turnover and high sensitivity: once fees, liquidity, or incentives experience marginal changes, funds quickly migrate between different protocols, amplifying volatility at the level of a single protocol.
● Liquidation Events and Volatility Diffusion:
● Research Brief points out that during several major downturns, the cumulative liquidation amount of contract positions on BNB Chain reached tens of billions of dollars, with daily liquidation volumes ranking among the top across multiple chains during certain periods.
● Liquidations are mainly concentrated on high-leverage perpetual positions, especially speculative positions primarily collateralized by BNB. This concentrated liquidation often leads to:
● Short-term severe divergence between BNB spot and derivatives prices;
● On-chain collateral assets being passively sold off, triggering secondary price shocks;
● Funds beginning to rapidly move between on-chain and CEX to cover margin calls or stop losses, further amplifying global market volatility.
● Trading Depth and Liquidity Supply:
● Data shows that the order depth and funding rate stability of top derivatives protocols on BNB Chain are significantly better than those of niche public chains, backed by continuous investment from market makers and liquidity incentives: the total annual incentives provided to liquidity providers by top protocols reach tens of millions of dollars.
● This liquidity, built through high-intensity incentives, gives BNB Chain a relatively lasting appeal in the high-frequency leverage trading arena, but also increases dependence on the sustainability of these incentives.
Overall, BNB Chain has become one of the core scenarios for on-chain derivatives and high-frequency leverage trading. Here, funds are no longer just "lying around earning interest," but are rapidly cycling between protocols at a higher frequency and with more leverage, increasing yields while also pushing the systemic risk of the entire chain to a higher level.
New Narrative Overlap: Restaking, RWA, and Exchange Resources
● Restaking: The Leveraged Logic of Yield Overlap:
● Research Brief points out that various restaking or similar restaking protocols have emerged in the BNB Chain ecosystem, allowing users to use staked assets again for securing networks, oracles, Rollups, and other infrastructures.
● Key features of these protocols include:
● Splitting originally single staking yields into base yield + additional incentives;
● Spreading risk from single-chain consensus to multiple protocols and service layers;
● Some protocols allow for the re-minting of collateral based on restaked assets for lending or derivatives trading, forming multiple overlaps of yield and risk.
● On BNB Chain, due to relatively lower gas costs and interaction thresholds, this "multi-layer yield structure" is more easily adopted by small and medium-sized funds, driving rapid expansion of restaking-type assets on the chain.
● RWA: The On-Chain Shadow of Traditional Assets:
● Research Brief shows that the number of projects related to RWA on BNB Chain and the locked value have continuously increased over the past period, covering on-chain bonds, real-world receivables, and asset certificates with compliance attributes.
● Although the TVL of individual RWA projects is relatively limited, the overall scale of RWA assets on BNB Chain has reached hundreds of millions of dollars, and presents:
● A locked structure dominated by institutional or semi-institutional funds;
● Cross-utilization with lending protocols, yield aggregators, and other DeFi modules, becoming a "low-volatility base" for some funds.
● Exchange Resources and Ecological Interaction:
● As a public chain backed by large centralized trading platforms, BNB Chain has a unique advantage in resource mobilization and traffic introduction:
● Through Launchpad/Launchpool and on-chain incentive programs, new project initial liquidity and users are directly introduced to BNB Chain;
● The spot, contract, and wealth management products on trading platforms form an "internal circulation" with DeFi modules on BNB Chain, allowing funds to seamlessly switch between on-chain and platform products.
● Research Brief mentions that BNB Chain has launched several plans such as fee reductions, trading incentives, and ecological fund support at multiple stages, directly improving the survival rate and expansion speed of on-chain projects. For example, the funding plan for developers and the community totals hundreds of millions of dollars in ecological fund scale, supporting hundreds of projects to land on-chain.
Under the overlapping narratives of restaking, RWA, and exchange resources, BNB Chain is evolving from a "single DeFi/trading chain" to a "comprehensive financial infrastructure with multiple assets and multiple yield structures," which also makes on-chain capital behavior more diversified and complex.
Long and Short and Risk: A Game Perspective of Trillion-Level Funds
● Optimistic/Supporters: Believe this is a structural upgrade and long-term positive
● Capital and Traffic Moat: Supporters argue that BNB Chain, relying on the user base and asset scale of top trading platforms, has formed a natural capital and traffic entry:
● Daily active users, on-chain transaction counts, and TVL together build a "high-frequency, high-stickiness" ecosystem;
● Ecological funds and incentive programs ensure that new projects have enough time to complete cold starts, reducing the "project failure rate."
● Multi-Narrative Resonance: Various narratives such as restaking, RWA, derivatives, and high-frequency trading intertwine on BNB Chain, bringing:
● Higher capital utilization efficiency and compounding space;
● Deeper connection potential with traditional finance, laying the groundwork for future compliance and institutionalization.
● Technical and Cost Advantages: Supporters emphasize that BNB Chain's current performance and fee structure are more friendly to large-scale users and complex DeFi strategies, making it difficult for most new public chains to fully replace it in the short to medium term.
● Pessimistic/Opponents: Concerns about systemic risks brought by high leverage and narrative stacking
● Leverage Stacking and On-Chain Minsky Moments: Opponents argue that the advantages of BNB Chain actually breed potential systemic risks:
● Derivatives, high-frequency trading, and restaking collectively amplify leverage;
● Most funds rely on the assumption of "continuous incentives + high returns," and once incentives are interrupted or returns decline, it may trigger a deleveraging spiral on-chain.
● Concentration of Top Protocols and Single Points of Failure:
● TVL and transaction volume are highly concentrated in a few protocols, meaning that any risk event (security, liquidation, compliance) of a leading protocol could quickly spill over to the entire ecosystem;
● The overlap of restaking and RWA makes the transmission paths between "protocol risk—asset risk—on-chain financial risk" more complex, making it harder to identify black swan events in advance.
● Regulatory and Compliance Uncertainty:
● High-frequency contracts, leveraged trading, and certain RWA structures are naturally on the radar of global regulatory agencies;
● Opponents worry that once regulations around high-leverage derivatives tighten, it could have a substantial impact on the entire chain's capital structure and business model.
The divergence between the bulls and bears essentially focuses on the sustainability judgment of the structure of "high leverage and multi-narrative resonance": is it a more advanced financial infrastructure or a more complex risk stack?
Outlook: Finding Balance Between Volatility and Narratives
In the short term, the market will focus on three key variables: first, whether the TVL and transaction volume related to derivatives and restaking on BNB Chain continue to expand, and whether there are clear signals of deleveraging; second, whether the participation of RWA and institutional funds can further increase from the current level, thereby introducing more "low-volatility base assets" into the on-chain capital structure; third, whether there are marginal changes in the regulatory environment surrounding high-frequency leveraged trading, and how this reflects on on-chain capital behavior. In the medium to long term, BNB Chain's core challenge lies in: while maintaining high activity and multi-narrative expansion, constructing a more robust risk isolation and governance mechanism, truly upgrading this "transaction-driven public chain" into a comprehensive financial infrastructure capable of carrying trillion-level funds and operating across cycles.
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