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Binance Vaults: Liquid Staked Ether Hits $1.2B TVL with Unforeseen $500M Surge

Sep 28, 2023 at 01:13 pm

Binance, a prominent player in Ethereum staking, is ranked among the top participants, along with Lido Finance and Coinbase.

Binance Ether Staked (Data by DefiLlama)Binance Ether Staked (Data by DefiLlama)

Over the weekend, Binance's liquid staking ether experienced an unexpected surge of $500 million in inflows, propelling its Total Locked Value (TVL) to $1.2 billion, according to reports from DefiLlama.

According to blockchain data, a total of 318,180 wrapped Binance ETH (WBETH) derivative tokens, valued at approximately $502 million, were created in five nearly equal installments of $100 million each on Saturday and Sunday. These tokens were subsequently deposited into a cryptocurrency address labeled "Binance 8," which serves as a cold wallet used by the exchange to safeguard users' assets.

Blockchain transactions after minting wBETH (BlockSec)

Blockchain transactions after minting wBETH (BlockSec)

These recent transactions followed another significant inflow of $573 million earlier in the month, leading to discussions within the crypto community about the somewhat irregular nature of these movements. In contrast, the liquid staking derivative cbETH from rival exchange Coinbase has experienced consistent inflows and outflows on a daily basis in recent weeks, while inflows to WBETH have occurred intermittently and in substantial amounts.

Movement of cbETH (Coinbase's liquid staking token) in and out (source: DefiLlama).

Movement of cbETH (Coinbase's liquid staking token) in and out (source: DefiLlama).

Binance clarified in a statement on social media that these transactions were part of the exchange's previously announced initiative to gradually transition the original Binance-issued staked ether (BETH) tokens into WBETH.

In April, Binance introduced an enhanced version of BETH known as WBETH, a liquid staking derivative that empowers investors to utilize the tokens for borrowing and lending within decentralized finance (DeFi) protocols beyond the Binance platform, all while earning staking rewards. When users engage in staking ETH through Binance, they receive a derivative token representing the staked assets.

The exchange announced a month ago a series of measures aimed at promoting the adoption of the new token and reducing activity associated with the old one, which includes the "progressive" burning of BETH tokens held in Binance wallets.

According to blockchain data, Binance burned 330,000 BETH on Monday, a figure roughly equivalent to the amount of WBETH minted over the weekend. Consequently, these movements did not significantly alter the overall quantity of staked assets through the exchange.

Binance stands as one of the major participants in Ethereum's staking network, with 1.2 million ETH staked. It trails behind Lido Finance and Coinbase, according to data from crypto investment firm 21Shares' Dune dashboard. At present, WBETH accounts for approximately 765,000 of the staked assets, as indicated by DefiLlama's data.

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