Binance's Bold Move: BTC/TUSD Trading Volume Drops 88% as Zero Fees Vanish
The Vanishing Act: BTC/TUSD Volume Plunges 88%
Just a short while after Binance waved goodbye to its zero-fee promotion for the BTC/TUSD trading pair on September 7, the crypto community witnessed a jaw-dropping event. The daily trading volume for BTC/TUSD plunged by a staggering 88%, nosediving from an impressive $636 million to a modest $72 million, as reported by Kaiko data.
The repercussions of this decision extended beyond mere statistics. TrueUSD (TUSD), the stablecoin in question, experienced its lowest volume level since it was re-listed on the exchange in early March 2023. At this moment, only one trading pair on Binance offers both zero maker and taker fees: BTC-FDUSD.
First Digital USD (FDUSD), introduced to Binance in July 2023, is a stablecoin that enjoys this privilege. It boasts backing by USD held in reserves through its custodian, First Digital Trust Limited. But, intriguingly, this unique advantage didn't propel FDUSD to the forefront of the stablecoin race.
Kaiko's analysis shows that the removal of zero fees from TUSD had a profound effect on Tether's dominance on the platform, boosting its market share to an impressive 80%. Meanwhile, TUSD's share took a nosedive, plummeting from over 30% to a mere 5.6%. FDUSD, despite its newfound advantage, still stands as one of the smaller stablecoins by trade volume on Binance, commanding around 4% of the market share.
A Delicate Balancing Act: The Tumultuous Journey of TUSD
Binance's decision to eliminate zero fees for TUSD came just a month after the stablecoin faced intense scrutiny due to issues with its provider, Prime Trust. In June 2023, TrueUSD temporarily halted the minting of TUSD tokens through Prime Trust, causing a brief de-pegging of its value to $0.9963. The situation took a darker turn in August 2023 when Prime Trust filed for bankruptcy under Chapter 11 in the US. Nevada's financial watchdogs discovered that the company was insolvent and had been using clients' funds to fulfill withdrawals since December 2021, revealing a shocking deficit of over $12 million in its stock.
In the volatile world of cryptocurrency, every decision has a profound impact. Binance's move to remove zero fees from the BTC/TUSD trading pair was a bold one, sending shockwaves through the market and dramatically altering the landscape for stablecoins. As the crypto industry continues to evolve, one thing remains clear: adaptability and resilience are essential qualities for success in this ever-changing landscape.