Reviewing historical data from Binance Launchpad to analyze long-term holding returns of BNB.

CapitalismLab

23-05-15 18:38

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Original Title: "Reviewing Binance Launchpad Historical Data, Analyzing Long-term Holding Returns of BNB"

Original Source: CapitalismLab

Binance Launchpad has recently received negative reviews, but the voice of "education cannot be impoverished" still fully reflects the warmth and beauty that Launchpad brings to the cryptocurrency community.

We have analyzed the Launchpad historical data from 2021 to present, and compared the historical evaluation with the current profit level of Launchpad using data. We have explored the reasons for the "boring" reputation and calculated the long-term return rate of holding BNB for new investment by benchmarking the ETH staking return rate. We have conducted a comprehensive analysis of the "profitability of BNB" issue.

Indicator Explanation

First day increase: compared to the IDO price, the first UTC+0:00 price after going online has increased.

The largest historical increase: the increase in price compared to the highest historical price of IDO.

：The first day return rate of BNB in base currency is: 1 BNB for initial investment, the amount of BNB that can be obtained by selling tokens on the first day.

：BNB's historical maximum return rate based on its own currency is 1 BNB. By participating in initial coin offerings (ICOs), the highest amount of BNB that can be obtained by selling at the highest historical price is also available.

Revenue Assessment

Take the median of all projects, with a first-day increase of 12.6 times and a maximum historical increase of 25.7 times. The first-day return rate of BNB is 0.015, and the maximum historical return rate of BNB is 0.031.

Since the launch of the three tokens after HOOK, all indicators are at a medium to high level. The median first-day increase of 24.4 times is 1.9 times the historical median, and the maximum historical increase is 1.4 times the historical median. The first-day return rate of BNB is 1.5 times, and the maximum historical return rate of BNB is 1.3 times. This means that these projects in the bear market are actually more profitable than most projects in the bull market.

The current policy is also friendly to arbitrage users. Compared with the uneven returns before, the BNB-denominated return rates of the past three projects are around 2%. If the terms of Launchpad are similar to these in the future, then for users who buy spot and short contracts to participate in new projects, as well as those who borrow BNB from Venus to participate in new projects, there is basically a stable expectation.

Why does it feel dull and tasteless?

The question is, why does it always feel like it's not as powerful as before? The reason is mostly due to the lack of big breakthroughs. Within 21/22 years, there are products like SFP/GMT that can bring returns of hundreds of times. If you hold onto them, one is worth ten. The last round of SFP to GMT was about a year apart, and after another year in GMT, there has not been a project that has achieved the same level of growth.

It is normal for an impressive project to leave a stronger impression than three above-average projects. When you look at the picture below, your first reaction is probably to look for GMT. What does GMT's BNB-based historical maximum return rate of 0.46 mean? It means that you can sell 0.46 BNB at the peak by using 1 BNB to participate in the GMT initial offering. SFP can even generate 1.56 BNB with 1 BNB! No wonder everyone is so impressed. In comparison, the current maximum return rate of 0.0X is somewhat uninteresting.

However, what is interesting is that the first-day gains of SFP/GMT were only average, at 12 times, which is only half of Hook/EDU. The three new projects have not been online for long, and in the current bear market, Ponzi and other models are unlikely to thrive, so there should not be too high expectations for the time being.

BNB Long-term Holding Benefits

BNB LaunchPad's annualized return can actually be benchmarked against ETH staking returns. Over the past two and a half years since 2021, if the token is sold on the first day, the total return rate of BNB is 36% with an annualized return of 14%, which appears to be slightly higher than the returns from ETH staking during the same period.

However, BNB and Launchpool yields, combined with the earnings from Launchpool mining, bring the total return rate of BNB to 52%, with an annualized rate of 21%, which is nearly twice the yield of ETH Staking during the same period.

Since the bear market, the total project return has been about 9.5% in the past year, while the ETH Staking APR benefiting from MEV income after the Merge is approximately 6%. This means that even in a bear market, the return rate of BNB investment is still maintaining a yield of over 50% compared to ETH Staking.

If the bull market comes, as stated in this tweet, ETH staking rewards are expected to benefit from MEV income, while BNB Launchpad is expected to see a double increase in quantity and price. However, the current staking rate of ETH is relatively low, with 2-3 times room for growth compared to other L1s, which may dilute the rewards due to more staking. The amount of new projects on Launchpad seems to be stable at around 10M in both bull and bear markets, and with the temptation of "historical maximum return", BNB is relatively more resilient.

Of course, currently BNB/ETH are both undergoing deflation through burning, but the burning speed of BNB is significantly faster. However, the benefits brought by burning will be directly reflected in the coin price. The long-term trend of BNB/ETH has been upward historically, and since 2021, BNB/ETH has been fluctuating horizontally. Therefore, it is reasonable to directly compare the benefits of staking and pledging.

Summary

Since the bear market, the comprehensive return rate of Launchpad's three projects has been in the historical upper-middle range, with various indicators about 1.3-1.9 times the historical median. The first-day return rate of BNB is currently stable at around 2% in terms of BNB, which is suitable for arbitrage.

It has been a year since there has been no appearance of SFP/GMT, etc., which can achieve a phenomenon-level return of up to 1.5 BNB for 1 BNB invested in new projects. The negative market feedback may be due to this.

Compared to ETH Staking, holding BNB long-term currently brings a new annualized return of about 9.5%, which is 1.5 times that of ETH. During the previous bull market, BNB's return was more than 2 times that of ETH, and it is expected to have more upward elasticity in future bull markets.

However, blindly following the calculator is not the way to go. In the next bull market, the use case of ETH/BNB may be the key factor in determining returns. Currently, the development of ETH L2 is good, and whether BNB Chain can continue to exert its strength is also a particularly important point to pay attention to.