So. Apr 21st, 2024

• Binance’s Bitcoin liquidity for its TrueUSD (TUSD) surged more than 250% after it phased out its zero-fee trading feature for other stablecoins.
• Kaiko’s director of research, Clara Medalie, highlighted the role the zero-trading fee option played in improving Binance’s market share by 20%.
• TUSD has seen its circulating supply double to over $2 billion and become the second-largest stablecoin on the Tron network as a result of Binance’s decision.

Binance Phases Out Zero-Fee Trading For Stablecoins

Binance announced on March 15th that it was moving its zero-fee BTC trading feature from BUSD to TUSD on March 22nd. This resulted in a surge of more than 250% in Bitcoin liquidity for TrueUSD (TUSD), while Binance USD (BUSD) and Tether’s USDT saw their liquidity decline by 60% and 70%, respectively.

Zero-Fee Option Improves Market Share

Kaiko’s director of research Clara Medalie said that this free trading option has helped increase Binance’s market share by 20% within eight months, with the exchange controlling 72% of the market following FTX’s collapse in November 2022. According to Kaiko Data, the zero-trading option accounted for 61% of total volume on Binance as of last week.

TUSD Becoming Successor To BUSB

Riyad Carey from Kaiko highlighted that this decision showed that Binance had made an apparent move to promote TUSD as the successor to BUSB. Since then, TUSD has seen its circulating supply double to over $2 billion and become the second-largest stablecoin on the Tron network due to additional minted coins and new trading pairs being added to it by Binance.

Potential Impact On Market Share

Despite these benefits, Medalie warned that users drawn to Binance because of its free trading feature may leave for other rival platforms if this decision is not reversed soon enough.

Conclusion

Overall, while there are potential benefits from this decision such as increased circulation in TUSB coins and improved market share for Biance, there is also potential impact on user retention if users decide to go elsewhere due to lack of free trading options.

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