{"id":38944,"date":"2021-03-15T15:48:07","date_gmt":"2021-03-15T13:48:07","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=38944"},"modified":"2025-08-30T07:09:41","modified_gmt":"2025-08-30T04:09:41","slug":"analysts-divided-over-real-activity-on-binance-smart-chain","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/analysts-divided-over-real-activity-on-binance-smart-chain\/","title":{"rendered":"Analysts divided over real activity on Binance Smart Chain"},"content":{"rendered":"<p><span style=\\\"font-weight: 400;\\\">PancakeSwap&#8217;s ascent to the top among Binance Smart Chain (BSC)-based protocols by value locked has drawn mixed reactions from experts.<\/span><!--more--><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">Analyst Calvin Chu questioned the reliability of the spike in the number of unique addresses on BSC. He saw in this the influence of the team-led <\/span><a href=\\\"https:\/\/blog.1inch.exchange\/1inch-introduces-chi-gastoken-d0bd5bb0f92b\\\" target=\\\"_blank\\\" rel=\\\"noopener\\\"><span style=\\\"font-weight: 400;\\\">1inch \u0442\u043e\u043a\u0435\u043d\u0430 Chi<\/span><\/a><span style=\\\"font-weight: 400;\\\"> (CHI) and its release on BSC.<\/span><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">CHI allows users to &#8216;lock in&#8217; a low gas price and deploy it when it rises, which undermines the economic rationale for carrying out various operations, including arbitrage.<\/span><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">In mid-February, the liquidity aggregator from decentralized exchanges 1inch <a href=\"https:\/\/u1f987.com\/en\/news\/defi-project-1inch-launches-governance-token-on-binance-smart-chain\"><span style=\\\"font-weight: 400;\\\">opened access to projects on BSC<\/span><\/a><span style=\\\"font-weight: 400;\\\">, including PancakeSwap.<\/span><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">Since mid-February, users have begun deploying CHI on BSC, which coincided with a spike in active addresses in the network. Chu explained that the \u201cactive\u201d addresses are those that receive or send coins. The analyst suggested that this happened with CHI \u2014 the creation of a new token requires obtaining ETH to activate the contract.<\/span><\/p>\n<p>\\n<\/p>\n<blockquote class=\\\"twitter-tweet\\\"><p>\\n<\/p>\n<p dir=\\\"ltr\\\" lang=\\\"en\\\">4\/n This roughly coincides with the incredibly high spike that users may see in this bscscan graph. Why? Because the metric \u00abactive addresses\u00bb means an address that receives or sends ETH (or in this case, BNB on bsc).<\/p>\n<p>\\n<\/p>\n<p>\u2014 Calvin Chu (@calchulus) <a href=\\\"https:\/\/twitter.com\/calchulus\/status\/1368637489880072196?ref_src=twsrc%5Etfw\\\">March 7, 2021<\/a><\/p>\n<\/blockquote>\n<p>\\n<\/p>\n<p><script async src=\\\"https:\/\/platform.twitter.com\/widgets.js\\\" charset=\\\"utf-8\\\"><\/script><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">Chu explained that due to gas-price differences there can be situations where CHI is cheaper to acquire on Uniswap\/Mooniswap than to accumulate it on Ethereum.<\/span><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">In BSC, CHI is easier to issue due to low fees. As a result, activity will naturally increase on the Binance Smart Chain. Calvin Chu urged not to rely on the active-address metric as confirmation of the BSC ecosystem growth.<\/span><\/p>\n<p>\\n<\/p>\n<blockquote class=\\\"twitter-tweet\\\" data-conversation=\\\"none\\\"><p>\\n<\/p>\n<p dir=\\\"ltr\\\" lang=\\\"en\\\">12\/n the takeaways being:<br \/>\\n1. stop looking at a mediocre metric to measure network growth or real adoption<br \/>\\n2. stop trying to pin this on a chain or a specific ecosystem.<\/p>\n<p>\\n<\/p>\n<p>\u2014 Calvin Chu (@calchulus) <a href=\\\"https:\/\/twitter.com\/calchulus\/status\/1368637500097396737?ref_src=twsrc%5Etfw\\\">March 7, 2021<\/a><\/p>\n<\/blockquote>\n<p>\\n<\/p>\n<p><script async src=\\\"https:\/\/platform.twitter.com\/widgets.js\\\" charset=\\\"utf-8\\\"><\/script><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">Another analyst Andrew Kang noted that after BSCscan updated their algorithms to account for CHI issuance, the growth slope of active addresses took on a more realistic shape. In a thread, he attempted to counter skeptics&#8217; claims about &#8216;fake&#8217; activity on BSC.<\/span><\/p>\n<p>\\n<\/p>\n<blockquote class=\\\"twitter-tweet\\\"><p>\\n<\/p>\n<p dir=\\\"ltr\\\" lang=\\\"en\\\">2\/ The most commonly cited questionable activity we saw was that of unique addresses<\/p>\n<p>\\n<\/p>\n<p>The sudden uptick in unique addresses was mostly attributed to CHI tokens being minted. When BSCscan changed their algo to exclude addresses generated by the CHI contract, slope normalized <a href=\\\"https:\/\/t.co\/Vq24G0JtQs\\\">pic.twitter.com\/Vq24G0JtQs<\/a><\/p>\n<p>\\n<\/p>\n<p>\u2014 Andrew K\u00f8ng (@Rewkang) <a href=\\\"https:\/\/twitter.com\/Rewkang\/status\/1371259530324013059?ref_src=twsrc%5Etfw\\\">March 15, 2021<\/a><\/p>\n<\/blockquote>\n<p>\\n<\/p>\n<p><script async src=\\\"https:\/\/platform.twitter.com\/widgets.js\\\" charset=\\\"utf-8\\\"><\/script><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">He noted that, unlike centralized platforms, on DEX it&#8217;s much harder to organise \\&#8221;wash trading\\&#8221;. The essence of this practice is the simultaneous buying and selling of assets to create an illusion of high trading activity.<\/span><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">According to Kang, transaction data is open and auditable. Binance would have to spend around $730 million per year in fees, based on a rate of 20 basis points of volume and a daily turnover of $1 billion.<\/span><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">The researcher supplemented the analysis with transaction volumes\u2014the metric rose as TVL increased. He introduced the term DEX AMM Velocity (the ratio of transaction volume to TVL), which describes the turnover speed of capital <span class=\\\"old_tooltip\\\"><span data-descr=\\\"automated market maker mechanism\\\"> AMM<\/span><\/span>.<\/p>\n<p>\\n<\/p>\n<blockquote class=\\\"twitter-tweet\\\" data-conversation=\\\"none\\\"><p>\\n<\/p>\n<p dir=\\\"ltr\\\" lang=\\\"en\\\">10\/ Now let\u2019s introduce a concept called DEX AMM velocity (ratio of Tx volume vs TVL) which tracks the speed of turnover of AMM capital<\/p>\n<p>\\n<\/p>\n<p>Higher velocity means that capital is being turned over faster (higher flow). Flow can be segmented to:<\/p>\n<p>\\n<\/p>\n<p>\u2014 non-arbitrage flow<br \/>\\n\u2014 arbitrage flow <a href=\\\"https:\/\/t.co\/CHirEzeec6\\\">pic.twitter.com\/CHirEzeec6<\/a><\/p>\n<p>\\n<\/p>\n<p>\u2014 Andrew K\u00f8ng (@Rewkang) <a href=\\\"https:\/\/twitter.com\/Rewkang\/status\/1371259584044621824?ref_src=twsrc%5Etfw\\\">March 15, 2021<\/a><\/p>\n<\/blockquote>\n<p>\\n<\/p>\n<p><script async src=\\\"https:\/\/platform.twitter.com\/widgets.js\\\" charset=\\\"utf-8\\\"><\/script><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">This flow can be segmented into arbitrage and non-arbitrage components. The former better reflects real user activity. Kang cites DappRadar data showing comparable metrics for their numbers on PancakeSwap and Uniswap.<\/span><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">Comparing volume to users:<\/span><\/p>\n<p>\\n<\/p>\n<ul>\\n<\/p>\n<li style=\\\"font-weight: 400;\\\" aria-level=\\\"1\\\"><span style=\\\"font-weight: 400;\\\">The \\&#8221;volume per user\\&#8221; metric is rising across the board, reflecting higher asset prices.<\/span><\/li>\n<p>\\n<\/p>\n<li style=\\\"font-weight: 400;\\\" aria-level=\\\"1\\\"><span style=\\\"font-weight: 400;\\\">Curve sees mostly large trades.<\/span><\/li>\n<p>\\n<\/p>\n<li style=\\\"font-weight: 400;\\\" aria-level=\\\"1\\\"><span style=\\\"font-weight: 400;\\\">Sushi+Balancer have high volume per user indicating a skew toward larger traders and arb flow.<\/span><\/li>\n<p>\\n<\/p>\n<li style=\\\"font-weight: 400;\\\" aria-level=\\\"1\\\"><span style=\\\"font-weight: 400;\\\">Uni+PCS indicate a skew toward retail investors.<\/span><\/li>\n<p>\\n<\/ul>\n<p>\\n<\/p>\n<blockquote class=\\\"twitter-tweet\\\" data-conversation=\\\"none\\\"><p>\\n<\/p>\n<p dir=\\\"ltr\\\" lang=\\\"en\\\">13\/ Comparing volume to users:<\/p>\n<p>\\n<\/p>\n<p>\u2014 Volume\/User is increasing across the board reflecting higher asset prices<br \/>\\n\u2014 Curve sees mostly large tx trades<br \/>\\n\u2014 Sushi+Balancer have high volume\/user indicating skew towards larger traders+arb flow<br \/>\\n\u2014 Uni+PCS indicate skew towards retail <a href=\\\"https:\/\/t.co\/aJ1hSBGZta\\\">pic.twitter.com\/aJ1hSBGZta<\/a><\/p>\n<p>\\n<\/p>\n<p>\u2014 Andrew K\u00f8ng (@Rewkang) <a href=\\\"https:\/\/twitter.com\/Rewkang\/status\/1371259607876702210?ref_src=twsrc%5Etfw\\\">March 15, 2021<\/a><\/p>\n<\/blockquote>\n<p>\\n<\/p>\n<p><script async src=\\\"https:\/\/platform.twitter.com\/widgets.js\\\" charset=\\\"utf-8\\\"><\/script><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">Kang added that activity in BSC communities confirms his conclusion about rising engagement. The expert estimates it is now higher than ETH projects. He found nothing extraordinary in on-chain analysis of Binance Smart Chain.<\/span><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">Kang said that his study does not confirm &#8216;fake activity&#8217; and bot-washing in BSC, but rather indicates growing interest from retail investors.<\/span><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">The Block analyst Larry Cermak noted that Kang&#8217;s work could be more useful if he studied liquidity-provider addresses. The $730M figure cited in the study is not entirely correct, since Binance provides a large share of liquidity, added Cermak.<\/span><\/p>\n<p>\\n<\/p>\n<blockquote class=\\\"twitter-tweet\\\"><p>\\n<\/p>\n<p dir=\\\"ltr\\\" lang=\\\"en\\\">You mention that Binance would need to pay $2M a day ($730M annualized) to wash trade but that\u2019s not really correct if we assume that the vast majority of liquidity is being provided by Binance itself. The most convincing analysis here would be to focus on the addresses LPing<\/p>\n<p>\\n<\/p>\n<p>\u2014 Larry Cermak (@lawmaster) <a href=\\\"https:\/\/twitter.com\/lawmaster\/status\/1371325046061432833?ref_src=twsrc%5Etfw\\\">March 15, 2021<\/a><\/p>\n<\/blockquote>\n<p>\\n<\/p>\n<p><script async src=\\\"https:\/\/platform.twitter.com\/widgets.js\\\" charset=\\\"utf-8\\\"><\/script><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">Binance CEO Changpeng Zhao thanked Kang and noted that he learned a lot from the thread.<\/span><\/p>\n<p>\\n<\/p>\n<blockquote class=\\\"twitter-tweet\\\"><p>\\n<\/p>\n<p dir=\\\"ltr\\\" lang=\\\"en\\\">Very interesting thread, with detailed analysis. Learned a lot. \ud83d\ude4f\ud83d\ude4f\ud83d\ude4f <a href=\\\"https:\/\/t.co\/W2tB1BvW5w\\\">https:\/\/t.co\/W2tB1BvW5w<\/a><\/p>\n<p>\\n<\/p>\n<p>\u2014 CZ \ud83d\udd36 Binance (@cz_binance) <a href=\\\"https:\/\/twitter.com\/cz_binance\/status\/1371322854868852741?ref_src=twsrc%5Etfw\\\">March 15, 2021<\/a><\/p>\n<\/blockquote>\n<p>\\n<\/p>\n<p><script async src=\\\"https:\/\/platform.twitter.com\/widgets.js\\\" charset=\\\"utf-8\\\"><\/script><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">In early March, TVL in the PancakeSwap protocol on the Binance Smart Chain <a href=\"https:\/\/u1f987.com\/en\/news\/pancakeswap-surpasses-uniswap-in-tvl-on-binance-smart-chain\">topped $4 billion<\/a>.<\/span><\/p>\n<p>\\n<\/p>\n<p><span style=\\\"font-weight: 400;\\\">Read more about the BSC rise in <a href=\"https:\/\/u1f987.com\/en\/news\/february-2021-in-numbers-bitcoin-tops-1-trillion-in-market-capitalization-binance-smart-chain-surges-and-the-nft-ecosystem-booms\">the February report<\/a>.<\/span><\/p>\n<p>\\n<\/p>\n<p>Follow ForkLog news on <a href=\\\"https:\/\/www.facebook.com\/forklog\\\" target=\\\"_blank\\\" rel=\\\"nofollow noopener\\\">Facebook<\/a>!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>PancakeSwap&#8217;s ascent to the top on the Binance Smart Chain by TVL drew mixed reactions from analysts.<\/p>\n","protected":false},"author":1,"featured_media":38945,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1307,1227,787,46],"class_list":["post-38944","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-bnb-chain","tag-cryptocurrency-transactions","tag-dex","tag-ethereum"],"aioseo_notices":[],"amp_enabled":true,"views":"19","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/38944","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=38944"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/38944\/revisions"}],"predecessor-version":[{"id":38946,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/38944\/revisions\/38946"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/38945"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=38944"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=38944"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=38944"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}