Binance has been busy in the last few months, they release new services such as the OTC portal or the mining pool and strengthen their ecosystem via the Binance Smart Chain which integrates EVM smart contracts into their DEX.
Whether you like Changpeng Zhao or not, you cannot dismiss that Binance is firing on all cylinders and is quickly expanding in new markets.
A quick look at what has been released
Mining pool: miners can now mine through Binance pool and send their rewards to the exchange directly.
OTC portal: it is a platform to sell large quantities of cryptocurrencies, starting at $10,000 or more. You can submit request for quote (RFQ) into the portal and see if someone is willing to take your offer.
CoinMarketCap: they reportedly bought CoinMarketCap for $400M. It looks expensive at first sight but will strengthen the Binance ecosystem. When Google bought YouTube for $600M, a lot of people said that it was not worth it but now YouTube is worth a lot more.
Binance Smart Chain: it is an interoperability solution to bring the Ethereum Virtual Machine (EVM) to Binance Chain. So basically, Ethereum smart contracts are compatible with Binance chain, it is easy to to make both blockchain communicates effortlessly and securely.
Why do we take notice?
Well, all the moves Binance is making to expand its ecosystem, do matter for the future of the BNB token, the Binance native token.
And it provides even more reasons to be bullish on BNB token going forward.
These new initiatives strengthen the use case of BNB token:
OTC portal & Mining pool: they bring more users (miners and traders) to Binance ecosystem, as a result fees generated will increase.
CoinMarketCap: we will have to see what happens, how the website is rebranded and what is the strategy behind this acquisition: do they want to rebrand it as “BinanceMarketCap” and put other exchanges out of business? Or do they want to build a better website to show to new crypto users that the industry has changed a lot and is more transparent than in the past ?
Binance SmartChain: imagine being able to use your BNB token to do all the things you can currently do with ETH in DeFi currently. Doesn’t it sound super bullish for BNB?
11th BNB burn
On the BNB token itself, they have burnt 1.69% of token supply or $52.4M USD during their 11th BNB Burn event.
What about BUSD?
BUSD for those unfamiliar, is the Binance’s stablecoin. BUSD has reached a $200M of market cap, it is still small compared to Tether USDT or Coinbase USDC, but Binance makes progress on that front once again.
What we don’t like yet: Binance options
Binance options are not yet competitive. Only people not knowing what they are doing, are currently buying options on Binance. They are super expensive compared to Deribit.
Hopefully, they will improve in terms of pricing and tooling available as well.
BNB is one of the cheapest token in terms of Price to earnings Ratio. According to Token Terminal, BNB has a P/E of 47.
The platform is heavily profitable and has built a moat around its exchange and token. With the addition of new services and the buyout of CoinMarketCap, we continue to see Binance as a top player in the crypto industry going forward and see its BNB token as undervalued considering that Binance Smart chain is compatible with Ethereum.
A lot of new possibilities emerge, such as bringing BNB to Ethereum as collateral (such as we have seen with tokenized BTC). But the most interesting part will be to see how serious is CZ about DeFi.
As Binance has plenty of cash, we see the possibility that the exchange attracts some players to build a DeFi ecosystem around its DEX and incentivises the ecosystem in the beginning to lure in developers, as DeFi in Ethereum is becoming less and less accessible if you have a good idea but no money.
Binance is firing on all cylinders with the release of new services and the buyout of CoinMarketCap.
The Smart Chain initiative is still seen by many as an underrated move but we do see it as a very smart one, which will strengthen the whole Binance ecosystem. The fact that it makes Binance compatible with Ethereum is huge. We do believe that they can build a DeFi ecosystem around their DEX if the strategy is executed correctly.
The BNB token at $16.3 is meaningfully undervalued in our opinion, for all the above reasons.
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