Liquidity Surges Amid Web3 Alpha Influx, TVL Holds Steady at $124.9 Billion

The DeFi market has shown substantial recovery amid structural shifts within the Binance (BNB) ecosystem. On-chain liquidity, driven by Binance Alpha, has led to a significant increase in trading volumes on decentralized exchanges (DEXs) within the Binance Smart Chain (BSC) ecosystem. This has enabled BSC to reclaim the top spot in the market, surpassing Ethereum (ETH). In stark contrast, the Sui (SUI) network faced a substantial decline in total value locked (TVL) due to a major hacking incident, underscoring market polarization.

BSC DEX Trading Volume Soars 115% Driven by Binance Alpha

According to DeFiLlama data (spanning May 17–May 23), the combined weekly DEX trading volume reached $117.5 billion, up 13.08% from the previous week. BSC’s trading volume surged by an impressive 115% to $43.2 billion, dethroning Ethereum (ETH) to become the leader in DEX trading volumes by chain, marking the highest level in three months for BSC.

At the center of this growth is Binance Alpha. The innovative platform streamlines on-chain discovery, token generation events (TGEs), and airdrop participation directly within Binance’s centralized exchange interface. By eliminating the complexities of wallet integrations and gas fee burdens, Binance Alpha has democratized access to early-stage Web3 projects.

As of May 19, daily trading volume via Binance Wallet exceeded $5 billion, claiming a 95.3% market share among 12 major on-chain wallets tracked by Dune Analytics. The platform’s Alpha Points reward system and its role in lowering the entry barriers for Web3 participation have been pivotal in driving user adoption.

Ethereum (ETH) followed with $16 billion in trading volume, while Solana (SOL), despite an 18.93% weekly decline, maintained the second-highest volume after BSC at $22.6 billion. Other notable contributors included Sui (SUI) at $5.9 billion and Base at $8.3 billion. Hyperliquid (+22.68%) and THORChain (+43.57%) saw robust gains that extended ongoing upward trends.

Total TVL Hits $124.9 Billion Amid Sui's 21% Decline from Hacking Fallout

The total TVL in DeFi climbed slightly to $124.9 billion, a 1.21% increase from the previous week, reflecting a modest uptrend. Ethereum remains the dominant player in the TVL space at $68.1 billion, followed by Solana ($11.1 billion), BSC ($6.8 billion), Bitcoin ($6.6 billion), and Tron (TRX) ($6.6 billion). In terms of growth rates, Hyperliquid (+21.93%), Avalanche (AVAX) (+8.90%), and Base (+8.46%) exhibited strength, while both Bitcoin (BTC) (+6.21%) and Ethereum (+5.68%) maintained solid performances. Sui was the sole underperformer due to the high-profile security breach, recording a sharp drop in TVL.

Derivatives Trading Gains Momentum, Led by Hyperliquid

The perpetual futures market has also seen positive trends fueled by liquidity expansion. Weekly trading volume stood at $98.2 billion, reflecting a 7.69% rise from the prior week, with daily trading volumes pegged at $16.4 billion. This suggests heightened risk appetite among market participants, aligning with expectations of price increases.

Meanwhile, the stablecoin market capitalization grew to $245.9 billion, up 1.1% week-over-week. Tether (USDT) maintained its dominance with a 62.26% market share, with Ethereum and Tron serving as the primary distribution networks.

Binance's Resurgence Vs. Sui's Crisis

This week in the DeFi space underscored the evolving liquidity dynamics, with Binance Alpha at the forefront. BSC reclaimed its position as the top chain for DEX trading volumes, setting a new milestone in the liquidity competition. Conversely, the Sui hacking incident served as a stark reminder of the pivotal role security plays in DeFi. Recovery in the medium to long term will likely depend on Sui’s ability to restore asset mobility and rebuild trust among liquidity providers.

Market participants will continue to monitor these shifting dynamics closely as the battle for dominance in the DeFi ecosystem intensifies.