How will the DeFi ecosystem influence BNB prices

The Binance Coin is the native coin used in the BNB Beacon Chain and BNB Smart Chain, decentralized environments that streamline blockchain communication and handle Ethereum-based smart contracts. Binance introduced the token through the ERC-20 protocol with 200 million coins, of which half were burned to increase the NBN coin value. 

Besides having transactional purposes on the Beacon and Smart chains, BNB is a highly used cryptocurrency for travelling, entertainment and various financial services, such as paying fees on Binance. BNB has had an impressive history on the market and peaked in 2018 and 2021 but showed a lack of consistency in value, so making a correct BNB crypto price prediction might be challenging considering factors like the state of the market or the worldwide adoption rate. 

But what’s sure is that BNB and DeFi ecosystems complete each other as many users leverage the coin in these financial environments due to numerous benefits. Here’s how DeFi can change BNB’s trajectory. 

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Use cases of BNB in DeFi

Decentralized Finance, or DeFi, is an emerging ecosystem that can allow users to operate financial transactions without the need for third parties using blockchain technology and cryptocurrencies. Considering its potential, DeFi has become increasingly popular as investors use it for decentralized exchanges, e-wallets and stablecoins.

Therefore, leveraging a native coin like BNB on prominent chains has numerous value benefits, which is why BNB is beneficial in DeFi for fee payments. Liquidity pools, DEX trading, and NFTs all use the BNB cryptocurrency to benefit from low fees.

At the same time, investors who hold BNB don’t need a third party for storage since it already serves as a value for storage and transfer. Moreover, anyone can generate passive income through BNB as the chains backing it up provide numerous digital products and technologies that give investors access to loans and other financial assets.

DeFi projects build on the Binance Smart Chain

Considering how expansive the Binance Smart Chain is, it can act as a reliable alternative to the Ethereum blockchain or the Tron platform due to low fees and high throughput. Numerous famous DeFi applications on the chain leverage the BNB cryptocurrency, such as the following:

  • Uniswap is a decentralized trading system used on the Ethereum blockchain;
  • Avalanche is a high-end blockchain used for innovating dApps;
  • Tezos is a smart contract platform like Ethereum;
  • DAI is a stablecoin backed by the US dollar;

These are only the most popular projects, which gained a widespread presence in the online environment, pushing the BNB price upwards in a short time. Therefore, they have the potential to be the driving force of further DeFi projects.

DeFi predictions and BNB prices

Since DeFi projects automatically influence the popularity of BNB, it’s easy to look at DeFi predictions and imagine where the cryptocurrency will go in the future. For example, while regulating DeFi is currently challenging, progress will be made in 2024 towards ecosystems of hybrid finance, paving the way towards DeFi.

At the same time, tokenization in DeFi is already an emerging trend, as more fiat currencies are associated with blockchain and networks. Assets like yield-bearing stablecoins and tokenizing real-world assets will eventually become mainstream, so users and developers will need BNB in digital ecosystems. Hence, its prices might boom at some point.

Another essential factor to consider for the development of DeFi includes more Layer-2 solutions that DeFi ecosystems need to enhance security. At the same time, Layer-2 protocols can support communication between blockchains, which is active through the Smart and Beacon Chain.

DeFi trends that will impact BNB

Since DeFi is emerging, there’s no wonder that it’ll integrate some of the latest technologies to improve products and services. For instance, investors should expect 2024 to be the year cross-chain compatibility is available across all networks through cross-chain transfer, an aspect already provided by the BNB Smart Chain.

At the same time, integrating traditional finance in DeFi will enable real-world asset tokenization of assets like mortgages and real estate property. Therefore, banks will be able to implement DeFi more easily, closing the gaps of technological issues.

Finally, cryptocurrency insurance might become a thing, as DeFi insurance policies have been discussed numerous times on these networks as a way to safeguard investors’ assets. Some platforms have already introduced services that handle stablecoin coverage.

BNB has plentiful community support

In crypto, communities matter the most because they have the power to support an entire cryptocurrency’s emergence on the market and ensure blockchains are safe for all users. For example, Ethereum’s user community was known to be significantly unified, which propelled it into the mainstream.

This is also the case with the BNB cryptocurrency, especially since the Binance exchange, a prominent company in the crypto industry, issues the coin. Therefore, the native cryptocurrency will always have a strong backup from Binance’s customers as it provides a reliable and trustworthy investment option as well as a means of payment.

Moreover, BNB has the support of communities from DeFi ecosystems, as the Binance blockchain is helping platforms and exchanges navigate various cryptocurrency challenges. That’s why BNB is one of the best DeFi tokens, along with Lido, AAve and even Ethereum.

Still, BNB must tackle these challenges

As innovative as it is, the BNB cryptocurrency must navigate its legal issues before entering the crypto market and competing with massive digital assets. The Binance landscape must change for BNB to increase. Although BNB is considerably flexible and adaptable within the crypto market, it needs a little bit of adjustment to shine again.

What do you think about BNB in DeFi?

BNB is the Binance Coin leveraged on the company’s chains and acts as a native token. It’s used to power up transactions on the Binance blockchain, but its use cases have expanded to include reliable payment methods for real-world cases. However, its power is exhausted with DeFi ecosystems since that’s where BNB is most valuable, so their relationship will influence the cryptocurrency’s prices. Still, BNB must tackle some of its legal and structural challenges to become more stable.