On February 27th, the BNBChain Gas token BNB broke through $400, a 63.93% increase from the beginning of 2023 when it was at $244, and a 27.79% increase from the New Year when it was at $313, with a market value of $61.763 billion.

Of course, the rise of BNB, ranked third in market value, is accompanied by the "early spring" of the cryptocurrency market since February 8th. In addition to this, it also benefits from Binance's initial point, as the platform has been actively operating its new asset issuance section, LaunchPool.

Since December 2023, LaunchPool has accelerated its pace of new listings, with the number of new listings in the first two months of this year almost half of the total for the entire previous year (11). The value of LaunchPool lies in providing benefits to users and helping to lock in the outflow of BNB and stablecoins.

The fast pace of LaunchPool's new listings coincided with Binance's $4.3 billion fine and settlement with the US Department of Justice, leading to speculation that Binance may be short of funds, defending its user base, which is the foundation of its fee income. The revenue pressure on Binance after being restricted by US regulations is real?

Although the 2023 annual report of Binance did not disclose revenue data, the registered user base (170 million) and third-party statistics on trading volume ($16.69 trillion) that have been exposed both saw significant increases compared to 2022, with growth rates of 70% and 215.5% respectively.

In 2022, Binance disclosed a revenue of $12 billion. Considering the overall upward trend of the market last year, the platform's revenue in 2023 is likely to exceed the $20 billion disclosed during the cryptocurrency bull market in 2021.

In 2024, as the new cryptocurrency bull market begins to brew, Binance, which is by no means short of funds, has once again seized the opportunity for expansion, but its goals are changing.

LaunchPool's high-frequency new listings average lock-up of 15.2 million BNB

On February 27th, BNB reached a new high of $404, the highest since November 8, 2022, when it was at $398, which was due to selling pressure, but now it is due to strong buying pressure. This price is less than halfway to BNB's all-time high of $669.3 on November 7, 2021.

The current cryptocurrency market has completely shaken off the bearish trend of 2022, and analysts have positioned it as the early stage of a new bull market. The leading performer in the market is still Bitcoin (BTC). When BNB broke its previous high, the market-leading BTC surged to $54,910, and has now broken through $57,000. Following closely behind is Ethereum (ETH), which rose to a high of $3,280.

With a market value of $61.335 billion, BNB, following behind BTC (market value of $1.1 trillion) and ETH (market value of $390 billion), is rising with the tide, and it is clear that BNB, ranked third in the market, has a unique advantage in the market.

BNB's growth also benefits from its ecosystem.

On the BNBChain blockchain network, where BNB operates as Gas, the total value locked (TVL) of cryptocurrency assets is $44.91 billion. According to DeFiLlama, a third-party data website, there are over 600 DeFi applications on the BNBChain, with 102 of them having a TVL of over a million dollars. These applications support the activity on the BNBChain and contribute to the flow of BNB on the chain.

Among the top 10 Layer1 chains by market value, the TVL of BNBChain (formerly known as BSC) has been growing since the second half of last year, second only to the original Ethereum.

BNBChain TVL recovery growth

In addition, BNB continues to maintain a significant amount of token burning off-chain. As of now, BNB has burned a total of 52,457,076.73 tokens over 26 quarters, with 25.96% of BNB already out of circulation.

Outside the chain, the most stimulating action driving up the price of BNB comes from Binance, which previously used it as a platform token. Since the end of last year, the platform has taken active operational strategies for LaunchPool, an important use case for BNB within the platform.

Users familiar with LaunchPool know that it is a channel for staking BNB or stablecoins to obtain new assets. Users do not need to incur any additional costs. By depositing BNB or stablecoins into the open LaunchPool for new listings, they can receive the new Web3 project assets distributed within a limited time.

Since December 2023, the pace of monthly "new coin mining" on LaunchPool has accelerated, with three new assets listed that month. In January of this year, the pace continued with three new listings, and from February to the present, two new listings have been added. It's worth noting that LaunchPool only started new listings in April last year, releasing a total of 11 new assets for the entire year, while in the first two months of this year, LaunchPool has completed nearly half of that "task".

New assets listed on LaunchPool from the end of last year to the beginning of this year

From the performance on the secondary market, the new assets listed on LaunchPool have been on an upward trend since December.

In December, the first two new assets, ACE and NFP, are still in a downtrend, but the third new asset, AI, has risen by 32.52% from its closing price on the first day. XAI, a gaming blockchain listed on January 5th, saw a peak increase of 165%, and still has a 151.66% increase. However, for users who purely stake to obtain new tokens through LaunchPool, it's considered "pure profit".

The LaunchPool product has brought a win-win situation for users and Binance—users receive airdrops for free, and if BNB rises during the same period, users staking BNB can enjoy dual benefits. Meanwhile, Binance retains users and their BNB and stablecoins through this method.

In just January and February of this year, Binance has locked a total of $9 billion in stablecoins and 15.2 million BNB through LaunchPool, with the latter valued at approximately $22.8 billion, bringing the total locked value to $31.8 billion. Considering the overlap of users participating in new listings, the average locked value for each new listing on LaunchPool is approximately $5.56 billion.

According to DeFiLlama data, during the same period, the total on-chain assets on Binance were valued at $80-90 billion, and when LaunchPool is active, at least 6%-7% of the assets will remain on Binance.

Don't underestimate this proportion. After reaching a settlement with the US Department of Justice for a fine of $4.3 billion on November 23, Binance lost $2 billion in just one week. The start of the accelerated pace of new listings on LaunchPool coincided with that black swan event for Binance.

After the disclosure of the hefty $4.3 billion fine, combined with Binance's actions to retain users and assets, there is a growing sentiment in the market and even within the Web3 community that Binance is short of funds and is defending its base of fee income by retaining users.

After the settlement, although Binance's new CEO Richard Teng has repeatedly emphasized in public statements that the company's "financial strength has not been affected" and that "there is no debt in the capital structure, expenses are within a reasonable range, and there is still considerable income and profit," the market still seems to doubt Binance's ability to withstand the pressure of regulation and even fines in the future.

So, does Binance really lack money? In the end, it all depends on its ability to make money, in other words, its revenue and profit.

How much money did Binance make last year?

Given that Binance is not a publicly listed company and its business scope is not limited to trading, it is difficult to obtain accurate revenue data, largely depending on its willingness to disclose. In January of this year, Binance's blog published a "2023 Annual Review," which did not include revenue data. However, this does not prevent us from using estimation and comparison to get a glimpse of the profit-making ability of this "world's largest cryptocurrency exchange platform."

According to the "review," Binance added over 40 million users in 2023, increasing the registered user base to 170 million, compared to 128 million in 2022. Third-party statistics show that Binance's trading volume in 2023 reached $16.69 trillion, a 215.5% increase from $5.29 trillion in 2022.

Although the revenue for 2023 has not been disclosed, Binance did disclose a revenue of $12 billion in 2022. During the previous cryptocurrency bull market in 2021, Binance publicly reported a revenue of $20 billion. It is clear that a cryptocurrency bull market is an absolute revenue-generating year for a trading platform.

 Binance's verifiable historical revenue, user, and trading volume data

In 2023, Binance saw growth in both registered user numbers and annual trading volume, with the latter almost tripling. The growth in user numbers and trading volume will both contribute to an increase in trading fee revenue, which is the main source of revenue for cryptocurrency trading platforms. A conservative estimate would put Binance's revenue for the past year at no less than $20 billion.

As for profit, if we follow Binance's previous rule of "burning BNB based on 20% of profit," and calculate based on the total amount of BNB burned in the four quarters of 2023 (8,233,412.617) and the median price of BNB for each quarter, Binance's profit for the entire year of 2023 would be $11.08 billion.

The amount of BNB burned in the four quarters of last year

Overall, since its establishment, Binance has consistently maintained high-speed growth in market share, user base, and revenue, still living up to its title as the "world's largest cryptocurrency exchange platform."

It is worth noting that in the face of this growth trend, Binance has begun to expand its own boundaries. In addition to the "2023 Annual Review," the company has published a blog post revealing the performance of Binance Pay in the payment field.

Binance Pay was launched in 2021 as a cryptocurrency payment method, and after 3 years of development and iteration, the total transaction volume of this product has reached $120 billion. For comparison, this data is equivalent to 0.4% of China's third-party payment transaction volume in 2023 ($28.33 trillion).

The proportion may be small, but the growth rates of various indicators are significant. In 2023, Binance Pay added thousands of merchants, with active users increasing by 70% to reach 12 million, and the total transaction volume reaching $770 billion. This means that over the past year, each user has completed an average of $6,410 in transactions using this payment method, with the main scenarios being payments, gifts, sending, or receiving cryptocurrency.

Binance CEO Richard Teng believes that cryptocurrency and Binance Pay will bring a convenient experience to the population in underdeveloped countries and regions where payment is inconvenient. "Now, they can use cryptocurrency for payments, transfers, and remittances 24/7, at a cost that is only a small fraction of traditional finance."

In the face of the observation, intervention, and regulation of cryptocurrency and emerging finance by various countries around the world, Binance seems to be looking for new breakthroughs beyond trading services, and is getting closer to the core mission that Richard announced when he took office: to promote finance towards compliance and broader freedom.

(Disclaimer: Readers are strictly required to comply with local laws and regulations. This article does not represent any investment advice.)

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