Binance Coin (BNB) market capitalization surpasses Santander and UBS — What comes next?

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Binance Coin has risen 900 percent to date, giving the token a $64 billion market value, surpassing Santander, Bank of Montreal, and UBS.

Binance Coin (BNB) has seen a more than 900 percent increase in value in 2021.

The continued congestion on the Ethereum network was one of the primary drivers of BNB’s rise. As the battle raged on, Binance Smart Chain (BSC) emerged as an option, satisfying the demands of the increasingly – decentralised finance (DeFi) market.

With a market capitalisation of $64 billion, BNB has exceeded conventional banks such as Santander, Bank of Montreal, and UBS. Meanwhile, some analysts point to Coinbase’s impending direct listing ($100 billion valuation) as a reason for the BNB price increase.

A common narrative in recent weeks has been that the direct listing of COIN is increasing the appeal of centralised exchange tokens. Analysts predict that other owned exchanges located in the United States, such as Kraken and Gemini, will possibly follow Coinbase’s lead and seek to collect funds with a stock offering.

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To comprehend BNB’s capacity, one must first comprehend the distinctions between equities (stocks). Once this is resolved, it will be easier to investigate the potential drivers of BNB’s gratitude.

BNB does not represent shares of Binance

BNB token provides holders with a discount on trading fees, and it is required for those wishing to participate in Binance Launchpad token sales. As BNB gained liquidity, it also became a base pair for other cryptocurrencies at Binance exchange.

As the Binance Smart Chain gained momentum, other applications arose. BNB, for example, can be used to pay network costs as well as a utility token in the community, which includes decentralised applications (dApps) and sports.

Binance burns (destroys) each of the non-circulating BNB tokens on a regular basis depending on the exchange’s total trading rate. The effectiveness of this technique faded over time when investors realised that these destroyed tokens never reached the circulating supply.

The Binance Smart Chain network employs Proof of Stake Authority, which removes the need for miners and prohibitively high transaction fees. The platform maintained consistency with the Ethereum Virtual Machine (EVM) and has a token and smart contract structure that is identical.

Many tokenized (or pegged) cryptocurrencies also gained traction in Binance’s networks, enabling users to avoid miner fees. Another advantage of Binance Smart Chain’s BEP-20 model is the ability to stake and farm in its large network of decentralised apps, such as the PancakeSwap DEX and Venus lending site.

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Decentralized Finance Total Value Locked ranking. Source: DeBank

In terms of overall value closed, as seen above, Binance Smart Chain has been gaining ground on other DeFi protocols. As a result, new applications for the BNB token appeared to take centre stage, with farming, liquidity pools, and base pairs using the token across the network.

Banks are reliable dividend providers, but DeFi could overtake the system

Equity partners are entitled to a portion of a company’s nett profit if it is publicly traded. This balance may vary from quarter to quarter, as the board of directors can want to repay debt or put any of the money into reserves. Banks, on the other hand, are well-known cash cows and therefore a stable source of dividend payouts.

Dividends paid by Santander (SAN) over the last 12 months separated by the current stock price result in a 3.7 percent increase, while Bank of Montreal (BMO) shareholders got a comparable yield. UBS yields in Switzerland fell in 2020, but they have traditionally averaged 5%.

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In shareholder meetings, bank shareholders essentially have voting rights, and minority interests will obstruct proposals that will harm them financially. This equity investors, on the other hand, are completely reliant on the bank’s nett income and development.

BNB, on the other hand, could be able to live without the overt effect of the Binance trade. If Binance Smart Chain will attract independent developers and validators, its ecosystem can flourish in the future. In principle, as the environment expands, the token’s reliance diminishes, and it becomes less concentrated.

If achieved right, BNB’s market capitalisation could exceed that of the entire conventional banking system; however, before this can happen, these networks and decentralised applications must achieve adoption and demonstrate their ability to meet the demands of mainstream customers and banking clients.

 

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