In the world of Binance Launchpool, participants often face a key decision: whether to use BNB or FDUSD for farming new tokens. This analysis breaks down the data from the last 12 Launchpool events to compare the returns, risks, and optimal strategies for both short-term and long-term holders.
Understanding Launchpool Participation
Binance Launchpool allows users to stake cryptocurrencies like BNB and FDUSD to earn new tokens. Each offering has its own rules, farming period, and rewards structure. Your choice of asset can significantly impact your overall returns, depending on market conditions and your investment horizon.
We define a short-term strategy as buying BNB or FDUSD at the start of a farming event and selling immediately after it concludes. The net profit or loss includes the farming rewards minus any price change in the staked asset during that period.
FDUSD Performance Analysis
Data from the past 12 Launchpool events reveals several key trends for FDUSD:
- The price of FDUSD consistently increased by an average of 0.3% after Binance announced a new Launchpool.
- During the farming period, FDUSD typically decreased in value by an average of 0.4%, indicating relatively stable pricing with minor deviations.
- Annualized yields varied significantly across events but aligned closely with the performance of the BNB pool in each instance.
- The short-term strategy of buying FDUSD solely for farming yielded an average annualized return of 67%, with no negative outcomes in any event.
- Notably, during the SAGA event, FDUSD supply increased by over $1.1 billion without a drop in yield, though sustained performance needs more data for confirmation.
👉 Explore real-time yield data
BNB Performance Comparison
Switching focus to BNB, the data tells a different story:
- New Launchpool announcements generally boosted BNB’s price, but with higher volatility compared to FDUSD.
- Price changes for BNB during farming periods were more pronounced and typically negative. Out of 12 events, only four showed significant positive price movement.
- The average farming yield for BNB was 136%, which was consistently lower than FDUSD’s 157% yield prior to FDUSD’s supply expansion.
- Short-term BNB farming strategies showed extreme volatility. The average annualized return was 66%, similar to FDUSD, but this was largely driven by two events (NFP and AEVO) where BNB’s price surged over $40.
Strategic Recommendations
Short-Term Farming: FDUSD or BNB?
For users looking to capitalize solely on farming rewards without long-term exposure, both assets offer similar average returns. However, FDUSD is the more stable choice. Its price experiences smaller fluctuations, reducing risk from market volatility. Additionally, users employing neutral strategies won’t need to hedge their positions, effectively leading to higher net gains.
Verdict: FDUSD is the superior option for short-term strategies.
Long-Term Holding: Which Asset Performs Better?
Over the last 12 events, FDUSD’s annualized yield was approximately 15.4% higher than BNB’s. This means that for long-term holders, BNB would only be the more profitable choice if its price appreciates by more than 15.4% from current levels.
However, this is a simplified view. In practice, users can employ advanced strategies like collateralizing FDUSD to borrow other assets (e.g., ETH) for additional yield farming during off-periods. The optimal choice depends on individual risk tolerance and active portfolio management.
👉 Get advanced farming methods
Understanding Downtime Between Events
The analysis period from ACE to SAGA covered 118 days. Active farming spanned 64 days, leaving 54 days of downtime. This translates to an average gap of only 4.9 days between consecutive Launchpool events.
Alternative Strategy: Trading the Announcement
What if you simply bought the asset after one farming ended and sold after the next was announced, skipping farming altogether?
- For BNB, this strategy yielded an absolute return of 2.44%, higher than the average farming gain of 1.8%. Annualized, this represents a 181.7% return. However, this approach carries significant risk if BNB’s price declines from a local high.
- For FDUSD, the same strategy generated a mere 0.3% return, far below the 1.3% average gain from participating in farming.
Frequently Asked Questions
What is Binance Launchpool?
Binance Launchpool is a platform that allows users to stake certain cryptocurrencies like BNB or FDUSD to farm newly launched tokens. It’s a way to earn rewards by supporting new projects on the Binance exchange.
Is it better to use BNB or FDUSD for short-term farming?
Based on recent data, FDUSD is generally better for short-term farming. It offers similar average returns to BNB but with much lower price volatility, making it a less risky option for those who plan to buy and sell immediately around farming events.
Can I make money by just trading BNB around Launchpool announcements?
While the data shows a high annualized return for buying BNB post-farming and selling pre-announcement, this strategy is risky. It relies on predicting price movements and can lead to losses if the market corrects. Farming provides a more consistent reward.
What is the typical downtime between Launchpool events?
The average gap between the end of one farming event and the start of another is quite short, around 4.9 days. This means opportunities are frequent, but it also requires active management of your assets.
Should I hold BNB or FDUSD long-term for farming?
If you believe BNB's price will increase significantly (beyond the yield differential), holding BNB could be more profitable long-term. However, FDUSD has provided higher farming yields historically. The best choice depends on your market outlook and willingness to engage in complex strategies like leveraging assets during downtime.
How does FDUSD maintain its peg during high supply increases?
FDUSD is a stablecoin designed to maintain a 1:1 peg with the US dollar. Its mechanisms include reserves and arbitrage opportunities that help stabilize its price, even during periods of increased supply, as seen in the SAGA event.