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Binance’s Bitcoin liquidity for TUSD surges 250% Binance’s Bitcoin liquidity for TUSD surges 250%

Binance’s Bitcoin liquidity for TUSD surges 250%

Kaiko's director of research Clara Medalie said the zero-trading fee option helped improve Binance's market share by 20% within eight months.

Binance’s Bitcoin liquidity for TUSD surges 250%

Cover art/illustration via CryptoSlate

Binance’s Bitcoin (BTC)  liquidity for its TrueUSD (TUSD) rose more than 250% on March 22 after it phased out its zero-fee trading for other stablecoins.

Kaiko Data researcher Riyad Carey highlighted that the exchange’s BTC liquidity for Binance USD (BUSD) and Tether’s USDT declined by 60% and 70%, respectively.

Bitcoin-TUSD liquidity
Source: Kaiko

Meanwhile, the exchange’s liquidity for TUSD increased to 29 BTC from 9 BTC within a few hours.

On March 15, Binance announced it was moving the zero-fee BTC trading feature from BUSD to TUSD on March 22. At the time, CEO Changpeng ‘CZ’ Zhao blamed the regulatory upheaval the other stablecoins faced for the firm’s decision.

Will this decision affect Binance’s market share?

Kaiko’s director of research, Clara Medalie, highlighted the role the zero-trading fee option played in improving Binance’s market share.

Binance market share
Source: Kaiko

According to Medalie, the free trading option helped Binance gain an additional 20% of the market since it was introduced in July 2022. At the time, Binance controlled only 50.5% of the market; however, the exchange’s market control increased to 72% following FTX’s collapse in November 2022.

Binance Zero fee
Source: Kaiko

Additional information from Kaiko pointed out that the zero-trading option accounted for 61% of the total volume on Binance as of the previous week.

Binance users drawn to the exchange because of its zero-fee feature could leave for other rival platforms, Medalie noted.

TUSD keeps growing

Binance’s decision would greatly benefit TUSD — emerging as a significant winner from its rivals’ recent debacle.

Carey added that Binance’s decision showed that it had made an apparent move to promote TUSD as the successor to BUSD.

Since the crackdown on BUSD, TUSD has seen its circulating supply double to over $2 billion and become the second-largest stablecoin on the Tron network. During the period, Binance minted more TUSD stablecoin and added new trading pairs for the asset.

Meanwhile, Protos’ researcher Bennett Tomlin pointed out that TUSD is one of the weirdest stablecoins in the crypto market. According to the researcher, TUSD has some undisclosed relations with Justin Sun, and bankrupt Alameda Research was also a lead investor in the asset.