‘We Are in a BUIDL Market’ — Binance Research Half-Year 2022 Report

‘We Are in a BUIDL Market’ — Binance Research Half-Year 2022 Report

1 year ago

What really happened this year in cryptocurrency? Did everything just turn red and gloomy? Well, according to the latest Binance Research report — that's not the case.

‘We Are in a BUIDL Market’ — Binance Research Half-Year 2022 Report

The first half of 2022 has proven to be challenging for investing in risky assets — even for not-so-risky ones. Crypto has not been spared from the market downturn. Nonetheless, continued developments and innovation in the crypto ecosystem contributed to an optimistic view of the future of crypto, according to  Binance Research.

The best time to practice for a big performance is not on the opening night, but months before people are even aware of what will come. It's these days that are the most important for the long-term success of the space and as such, it is worth having a closer look at what has been happening in crypto this year amidst the  bear market territory that has set in.

For one — the recently published Binance Half-Year Report 2022 shows that competitionbetween layer-ones (L1s) remains as fierce as ever. The total value locked (TVL) of L1s declined throughout the year, and Ethereum has been losing market share to alternative L1s. Ethereum’s market share of TVL dropped from 96.91% at the start of 2021 to 59.01% by June 2022. Yet neither of them stopped innovating and the focus on increased scalability is still persistent — despite the different approaches towards it.

According to the Binance research team, layer-two (L2) deployment appears on track to become increasingly ubiquitous going into the second half of the year. Their expectation is that most, if not all, of the top-ranked decentralized applications (DApps) are being deployed in some form on an L2.

Another key takeaway was the dominance of Ethereum in DeFi — which has continued to decline as other chains, such as the BNB Chain, catch up. Development in the space remains strong and fundraising in DeFi — $2.6 billion so far this year — has already hit an all-time high.

Even within the non-fungible token (NFT) space, trading volume in the first half of 2022 remained resilient despite a sharp decline in June. OpenSea is still the leading NFT marketplace, but new entrants such as X2Y2 and Magic Eden have introduced strong competition. The team sees the shift to using NFT aggregators likely to continue gaining ground, albeit slowly.

On the regulatory front, the team portrayed an optimistic view, seeing regulation as "nothing bad per se" as they believe that "proper regulation can foster increased institutional adoption and enhance consumer protection while at the same time allowing cryptocurrencies to see further adoption."

The Binance Half-Year 2022 report further touches on stablecoin development, GameFi, sector comparison, crypto fundraising and more. Having reviewed the underlying trends and developments across different sectors in the crypto ecosystem, one thing seems clear for the team: we are in a BUIDL market.

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About Binance Research: Binance Research is the research arm of Binance, the world's leading cryptocurrency exchange. The team is committed to delivering objective, independent and comprehensive analysis and aims to be the thought leader in the crypto space. Our analysts publish insightful thought pieces regularly on topics related but not limited to the crypto ecosystem, blockchain technologies and the latest market themes.

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