Layer by Layer: BNB Chain Holds Steady in Evolving Market Conditions

The BNB Chain ecosystem has been a steady presence within the DeFi landscape since its inception in late 2020 and subsequent rise to prominence in early 2021. Despite the rapid emergence of multiple new smart contract platforms last year, as well as the broad tightening of liquidity across markets in 2022, BNB Chain has continued to remain relevant as a major layer 1 (L1) network. With respect to total value locked (TVL) in DeFi protocols, BNB Chain - formerly known as Binance Smart Chain - has seen its share of the market fall from its all-time high of 17.6%, briefly reached in May 2021.

Nonetheless, the L1 ecosystem has managed to hold onto a significant share of DeFi TVL during a particularly tumultuous year. In fact, it is now breaching new highs for the year and hovering at about 9.4% as of this writing. A considerable part of the reason for this resilience is the consistency of liquidity and activity on the PancakeSwap DEX, which has been the most dominant protocol in the BNB Chain ecosystem by far for nearly the entirety of its history. As of this writing, PancakeSwap still makes up 53% of TVL in the ecosystem and is over $2 billion larger than the second-largest protocol by TVL, the lending protocol Venus.