CZ's Meme Experiment: Can Money, Collaboration, and Infrastructure Lead to a New Future for BNB Chain?

Original Title: "Can the Meme Narrative Reverse the BNB Chain Decline?"

Original Author: hoidya, Animoca Research Researcher

Many public blockchains spend money to build a Meme ecosystem, but whether such efforts are effective and how to make them effective are still open questions.

Recently, BSC has had to turn to developing a Meme ecosystem to drive overall on-chain ecosystem growth in response to the prevailing trend.

Specifically, BSC recently announced on the 17th a distribution of 4.4 million in liquidity incentives to Meme tokens. Many have likely felt their determination to develop a Meme ecosystem, with attention to management, ecosystem development, infrastructure, community, and more. They have undertaken a series of support measures:

1. Liquidity Incentive Program (spending money)
2. Ecosystem partnerships (enabling the ecosystem to spend money)
3. Infrastructure development (making infrastructure more suitable for meme transactions)

Today, I will use three indicators to show their progress, both to inform others about the outcomes of the BSC Meme ecosystem and to demonstrate the potential effects of this approach to other ecosystems. The article is roughly divided into three sections:

1. Summary of key development milestones on BSC from early February to March 11th
2. Observing the development outcomes of the BSC Meme ecosystem from three dimensions
3. Conclusion & Development Recommendations

Let's Get Started:

Key Timeline:

- February 6th: CZ responds to TST

- February 9th: Binance announces the listing of TST

- February 11th: CZ announces on Twitter, "BNB Chain has been constrained for too long, it is time to break free"

- February 12th: Announced the target areas for BNB Chain build by 2025

- February 13th: CZ announces he will post a photo and name of a dog three hours later

- February 15th: Implemented improvements to BNB Chain to ensure high bids transactions are included

- February 17th: Published an article educating users on avoiding malicious MEV; announced the launch of the meme 4.4 million liquidity incentive program

- February 19: Announcement of the meme Liquidity Plan Day 1 winner

- February 20: Announcement of the meme Liquidity Plan Day 2 winner

- February 21: Announcement of the meme Liquidity Plan Day 3 winner; cz to personally experience on-chain products

- February 23: cz's first use of DEX's AMM, LP, and other functions, stating that the DEX user experience needs improvement; BNBChain announces a one-month TVL incentive plan

- February 24: Foresight Ventures commits to invest $25 million to support the BNB Chain's BIA plan project; AI Hack Workshop distributes over 500k in rewards; Gas-free Initiative; and Trustwallet & GMGN collaboration

- February 28: BNB Incubation Alliance hosts an event in Denver

- February 27: PinkPunkBot supports BNBChain

- March 3: cz announces that Ronaldinho's STAR10 token will be exclusively issued on the BNB Chain

- March 4: Article published "What is BNB Chain Thinking in 2025?"

- March 6: BNB Chain launches bug bounty with a $100k reward; hosts "What Kind of Hackathon Do We Need" Twitter Space; hosts a series of featured activities

- March 7: $4.4 million in liquidity support distributed to top memes; Pascal hard fork introduces gas abstraction, smart contract wallets, bundled transactions, etc.

- March 10: BNB Chain announces the second round of liquidity support plan

Now moving on to the analysis section:

· TVL Changes
· On-chain activity metrics
· Ecosystem token price

TVL:

- BSC's TVL decreased from 5.5 billion in early February to 4.7 billion, a 14% decrease. The TVL of other chains decreased from 112 billion to 82 billion, a 26% decrease.

- During the BSC period, TVL changed in line with the total TVL, but it was notably observed that the inflow amount was higher on February 9 and February 13 during this period compared to other times. On the other hand, other chains saw higher inflow amounts mainly on February 4, March 1, March 3, and March 5; the times when BSC experienced higher outflow amounts were similar to those of other chains (look at % change)

On-chain Activity Metrics:

- Active Addresses: The meme campaign on BSC during this period did not bring about steady user growth, with significant user increases only on the 13th, 14th, and 19th; however, it quickly returned to normal levels (maintained at 1-1.5m). In the latter part of the period, Sui's active users were steadily increasing and surpassed those of BSC.

- Daily Transaction Volume: There were significant breakthrough points in transaction volume on the 13th and 19th. However, in the latter part of the period, Sui caught up with transaction volume, maintaining it at 4.5-5m.

- DEX Trading Volume: BSC's DEX trading volume continued to grow on the same dates. However, overall, in the latter part of the period, it showed a downward trend. But Solana's downward trend was more pronounced.
- Transaction Fees: After a steady rise, BSC's transaction fees surged on the 13th, then remained at the level of 0.13.

BSC Ecosystem Tokens with a Market Cap over 100m:

Over 90% of the 100m tokens experienced a decline. Only ACT saw a triple-digit percentage increase during this period.
Other tokens such as OM, NFT, CHEEMS, etc., also had some gains, mostly around 5%.

Different Market Cap Tokens on BSC:

During this period, the group with a market cap of 50-100m performed the best, while the other groups mostly showed a pure downward trend.

Different Category Tokens on BSC:

During this period, the Meme category had the best performance, while other categories maintained a decline of over 20% for nearly 30 days.

Summary:

· TVL saw a significant decrease, but the magnitude of the drop was not as high as in the total TVL of other chains. Additionally, the TVL growth seems to have little correlation with BSC's meme liquidity incentive program during this period: 1) there was no significant increase in TVL the day after the program 2) subsequent to the program, there was no apparent reversal in TVL growth 3) there were almost no instances where the TVL growth % surpassed that of other chains.

· On-chain activity metrics only showed increases on the 13th and 19th, returning to normal afterward. This suggests that the Meme liquidity program did not sustainably drive user growth metrics for BSC.

· Looking at token price performance, both large and small-cap tokens experienced a decline, with mid-cap tokens being the only ones showing an upward trend. Moreover, Meme likely attracted buying volume during this period of liquidity incentives, hence performing the best among the four tracks. However, in the other track of interest to BSC, Ai agent, a similar trend was not observed, possibly indicating

1) Meme capturing liquidity from other tracks

2) Ai agent lacking sufficient appeal to drive user purchases

Overall, the impact of BSC's meme program seems less than ideal, as it briefly brought about wealth effects, liquidity, and users, none of which seem sustainable in the long run.

Some Small Thoughts:

I believe the core purpose of a meme is similar to the bandwagon effect, where wealth effects drive users, and user experience drives infrastructure development. Infrastructure development can further give confidence to public chain teams to scale. Thinking from this perspective, I think that meme ecosystem development is something that should be done.

However, as to whether it should be done, how it should be done, and how much money to spend, I do not have a good idea yet. I am not an expert in this area, so I will leave it to the brothers and sisters in the comments section.

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