Binance Research Institute 2024 Semi-Annual Report: Summary of 6 Key Points
Original Title: Half-Year Report 2024
Author: Binance Research
Translation: Baihua Blockchain
After a significant growth of 109% in 2023, the crypto market continued to rise in the first half of 2024, with a total market capitalization increase of 37.3%. This growth was primarily driven by a 60.2% increase in the first quarter of the year, while the second quarter saw a pullback, with a market cap decrease of 14.3%.
In January, the successful launch of the Bitcoin spot Exchange-Traded Fund ("ETF") marked a key moment for the industry and triggered a period of bullish sentiment and positive capital inflows. Although the initial price reaction was relatively muted, the market saw strong gains in the following months as it digested the ETF's impact on attracting new capital, increasing investor accessibility, and reinforcing the acceptance of cryptocurrencies as mainstream investments.
Notably, several narratives gained momentum in the first half of this year—such as points meta, Restaking hype, memecoins frenzy, and the airdrop season. While some of these narratives may have subsided, they undoubtedly served as strong drivers of on-chain activity and trading in the first half.
Looking ahead, we will closely monitor the Federal Reserve's interest rate policy, the approval and progress of the spot Ethereum ETF, and the emergence or revival of specific cryptocurrency narratives by tracking on-chain metrics. We recognize the structural drag posed by the large number of tokens set to unlock in the coming months and years, and we urge investors to conduct their own research. The good news is that many tokens have seen their valuations correct in the past few months, returning to more reasonable levels.
Here are some key points from this report:
1. Public Chains: Layer1 & Layer2
Layer1 ("L1") performed strongly at the beginning of the year, with Bitcoin continuing to gain market dominance following the fourth halving, the launch of the Runes protocol, and the approval of the U.S. spot ETF (which has attracted over $14 billion in inflows to date). Ethereum experienced a reset surge and the EIP-4844 update, while the BNB chain continued to work on op BNB and Greenfield, and Solana excelled in the memecoin space and launched blockchain links ("blinks").
The first half of 2024 was an airdrop season for Layer2 ("L2"), particularly for zero-knowledge ("zk") projects. The promise of incentives attracted significant capital inflows into L2 chains, bringing the total value locked (TVL) in L2 to $43 billion, a 90% increase within just the first six months.
2. DeFi
2024 witnessed a massive influx of capital into decentralized finance ("DeFi"), driving TVL growth year-to-date ("YTD") by 72.8%, rising from $54.4 billion at the beginning of the year to $94.1 billion. This growth benefited nearly all DeFi sectors, whether major markets or niche markets, prompting some protocols to bring previously unattainable financial primitives on-chain.
3. Stablecoins
The stablecoin market saw a significant rebound, currently just 14.5% below the peak before the collapse of TerraUSD (UST) in April 2022. As of June 30, 2024, the stablecoin market capitalization reached $161 billion, marking a two-year high. While Tether's USDT continues to dominate, Circle's USDC and Ethena's USDe have also gained market share.
4. NFTs
The NFT market experienced turbulence in the first half of the year, with sales volume declining and the floor prices of major projects dropping by over 50%. Blur continued to dominate, driven by the BlastToken airdrop, while Pudgy Penguins achieved some success with its physical toys. Bitcoin NFTs also continued to perform well.
5. SocialFi
SocialFi continued to evolve, with the Lens protocol announcing the upcoming launch of its zk chain, Lens Network. Farcaster saw sustained user growth following the launch of Frames, while friend.tech released their token and v2. The Fantasy.top trading card game was also a notable highlight.
6. GameFi
The Web3 gaming sector performed strongly in the first quarter, but in the second quarter, the market capitalization of gaming project tokens saw a significant decline alongside other altcoin markets. Despite the price drop, user growth metrics are healthier than ever, with projects like Pixels and Hamster Kombat attracting a large number of players through airdropped tokens.
Other noteworthy areas include memecoins, artificial intelligence ("AI"), and decentralized physical infrastructure networks ("DePIN"). These sectors continued to receive strong attention from investors and the broader community in the first half of 2024.
7. Outlook for the Second Half
As we enter the second half of 2024, we will continue to be particularly interested in six key themes and expect significant progress in these areas throughout the year. These themes encompass various narratives and sectors, such as those related to the macro environment, the Bitcoin ecosystem, ownership economy applications, and real-world assets ("RWAs").