TVL Surge and “Bull Trap” Risks: TVL soared from $88 billion to $115.21 billion (up 30.9%) in May, driven by top assets like $ETH, $SOL, $BNB, and $SUI, which gained 15-20%. However, the rally was limited to native tokens and didn’t spread to broader ecosystems, as evidenced by stagnant DEX volumes and daily active addresses (DAA).
BNB Shines: BNB outperformed other chains, with its ecosystem booming. DEX volumes and DAA surged over 50%, fueled by the success of “Binance Alpha,” which attracted a massive user base, securing the top spot in active wallet market share and trading volume, and fostering sustainable ecosystem growth.
Lending/Borrowing Rates: Stable at 4%-5.5%, reflecting a sideways market over the past month with low leverage demand in DeFi, not yet reaching the highs seen in Q3/2024.
Stablecoin Growth: Stablecoin market cap hit $254 billion, growing steadily at 2%-4% monthly, supported by positive regulatory developments, including a more lenient SEC stance. More projects are launching stablecoins backed 1:1 by USD, USDT, or yield-bearing assets. Notably, $USD1, launched on BNB Chain with backing from Trump and Binance, reached a $2.1 billion market cap.
Binance Alpha Airdrop Update: Binance Alpha revised its airdrop mechanism with two reward phases and eliminated cross-trading points after $ZKJ and $DOGE plummeted. This move curbs large-scale “farming camps”, improves airdrop accessibility, and benefits regular users by stabilizing transaction fees post-implementation.
1. DeFi Market
1.1. Treading Cautiously in a Bull Trap
Strong TVL Recovery in May: After a sharp decline, TVL surged 30.9% in May, driven by capital flowing back into DeFi, fueled by a 15% BTC rally. Top coins like SUI, ETH, SOL, and BNB recorded gains of 10-20%, bolstered by chain incentives encouraging user activity, trading, and liquidity providing (LPing).
Month-to-date (MTD) in June shows a -3.7% decline. If global markets stabilize or trend upward, based on the 30.9% recovery from April to May, TVL is projected to rise modestly by 2-5% over the next two months (July & August).
DEX Volume Trends: DEX volumes have been declining steadily from January through MTD. While Binance Alpha sparked a market uptick, boosting BSC to dominate with 40% of DEX volume, other chains saw sharp drops of 30-50% MTD, indicating a continued downward trend.
Stablecoin Growth: Stablecoins maintain steady monthly growth of 2%-4%, supported by favorable U.S. regulatory developments. This has spurred the rise of new stablecoin and yield-bearing stablecoin projects, such as $USD1, a 1:1 USD-backed stablecoin issued and distributed on BNB Chain (launched by Trump and backed by Binance).
Overall Outlook: The DeFi market is likely to sustain its current TVL range of $110B-$115B through June, but high volatility driven by macroeconomic factors like geopolitics, fiscal, and monetary policies remains a concern.
Investors with 15%-25% gains should consider reducing positions.
Investors with strong positions from late April or early May, seeing 30% gains on top coins or 100% on altcoins, should consider taking profits on 85% of their positions.
L2 & New Chains (Unichain, Base, Sonic): In May 2025, these chains saw significant traction due to low costs, strong incentive models, and practical applications, recording a 15-30% TVL increase compared to April 2025. This attracted both users and builders back after a period of “liquidity withdrawal” in Q1/2025. However, caution is warranted as month-to-date (MTD) data suggests a potential “bull trap”.
The spotlight remains on the trio of ETH, SOL, and BNB. SOL and ETH saw significant TVL increases of 25-30%, accompanied by strong price surges of 48% for both in May. However, this growth was concentrated in native tokens, with no significant bullish momentum in their broader ecosystems.
The market is now highly polarized, shifting away from a broad bull run to a rotation driven by specific narratives and ecosystems with strong incentive support.
For BNB, TVL and price recorded increases of 4% and 25%, respectively, underperforming compared to ETH and SOL. However, the BNB Chain ecosystem has “heated up”, with the focus shifting to Binance Alpha.
BSC Surge: BSC saw an explosive increase, attracting a massive $198B in volume in May, a 575% rise from the previous month, with MTD volume at $174B, still trending upward. This also drove a significant 45.5% increase in active wallet addresses compared to April, outperforming all other chains.
Binance’s Success: Binance has excelled in its value-capture strategy, not only through BSC Chain but also by effectively educating and engaging a large number of active wallet users, securing the top spot in market share for trading wallet volume.
Finally, DeFi TVL recovered strongly in May, driving top L1 coins like ETH, SOL, BNB, and SUI to average gains of 20-35% by month-end. However, this growth was directly channeled into the assets themselves, not flowing into the broader ecosystems of these chains. As a result, altcoin layer assets within these chains remain weak, prone to a “bull trap,” and highly susceptible to macroeconomic factors. There is a significant gap in DAA and DEX volume across chains, with BNB consistently dominating the top spot in market share.
Binance Alpha Update: New Airdrop Claim Mechanism with Two Phases:
Phase 1: Users can claim airdrops upon reaching the minimum point threshold (X).
Phase 2: Remaining token balances will be distributed on a first-come, first-served (FCFS) basis, with a lower minimum point threshold (Y < X).
Starting from 7:00 AM Vietnam time on June 17, points will no longer be awarded for cross-pair trading; instead, points will only be calculated for USDT/Token Alpha trades. (Await further announcements regarding new roles.)
3. Lending/Borrowing
Lending/Borrowing Sector: Interest rates are fluctuating between 4% and 5.5%, reflecting a sideways market with limited enthusiasm for leverage, similar to the same period last year.
The information provided in this article is for reference only and should not be taken as investment advice. All investment decisions should be based on thorough research and personal evaluation.
