Data shows that in the recent mining activity of Binance’s new coin, FDUSD has a higher yield and risk resistance when adopting short-term strategies, while BNB is more suitable for long-term holders rather than short-term arbitrageurs.
(Foreword:
New coin Saga listed on Binance for mining! What is the potential of Layer1 virtual machine? BNB breaks through $580 in a short time.)
(Background:
Newly listed on Binance Launchpool: What is the Ethereum re-staking protocol ether.fi and why does Arthur Hayes see it as a good investment?)
Table of Contents
FDUSD Data Analysis
BNB Data Comparison
Conclusion
In the recent Binance new coin mining, only BNB and FDUSD can participate. What are the differences in their yields? Which is better, long-term or short-term holding strategy? Odaily Star Daily will analyze the data from the past 12 periods in this article, shedding light on the profits and losses under different strategies.
Note: Short-term strategy refers to buying FDUSD/BNB at the beginning of the new coin mining and selling at the end, with net profit or loss being the difference in mining income minus the price difference before and after mining. Readers who only want to see the final conclusion can directly read the last section of this article.
FDUSD Data Analysis
The following figure shows the data related to FDUSD in the past twelve periods, including the price changes before and after the announcement of “Binance announces new coin mining,” the price changes at the beginning and end of the mining activity, and the corresponding yields and short-term strategy profits.
After the launch of Launchpool, FDUSD has a relatively consistent increase, with an average of 0.3%;
During the mining period, FDUSD has a larger difference in price decline, with an average of -0.4%. This also means that FDUSD’s discount rate is more stable, and there is little difference in long-term price;
Similarly, the annualized return rate for each period also varies greatly, with the relative sizes between periods being basically the same as the BNB mining pool;
By stacking the profits and losses from holding and mining, the absolute return under the short-term strategy, and then converting it into an annualized return rate, the corresponding average annualized return rate is 67%, and there are no negative values, which means temporary purchases also have higher returns;
In addition, in the SAGA new coin mining period, FDUSD issued over 1.1 billion US dollars, but the yield did not decrease. Whether it can be maintained still needs verification in multiple periods.
BNB Data Comparison
Replacing the statistics with BNB mining pool, all statistical methods remain the same. The specific data is shown in the table below.
New coin mining has a significant boosting effect on the price of BNB, with greater volatility;
Correspondingly, the price fluctuation of BNB before and after mining is also larger, and is mostly negative. Only 4 out of 12 periods are significantly positive. This means that if you buy BNB before mining and hold it until the end, you are likely to endure a certain price decline;
The average mining yield of BNB is 136%, which is generally lower than the FDUSD mining pool before the FDUSD issuance (average value of 157%);
The short-term mining strategy of BNB has high volatility, and the average annualized return is similar to FDUSD, at 66% and 67% respectively, but it should be noted that it is mainly supported by the price increase of BNB in the NFP and AEVO rounds (the unit price of BNB has increased by over 40 USDT each).
Conclusion
If I want to buy temporarily and exit after mining, is FDUSD or BNB better?
For users who only want to obtain new coin mining income, the returns of the two are similar, but FDUSD is more stable, and for neutral strategy users, there is no need to hedge BNB, and the actual yield is higher.
Therefore, FDUSD is a better choice for short-term strategies.
For long-term holders, which is better, FDUSD or BNB?
Based on the data from the past 12 periods, FDUSD has a higher annualized return rate than BNB by only 15.4%. This means that for users, if they believe that BNB can rise another 15.4% from the current level, then the advantages of BNB are more obvious.
However, the above conclusion is based solely on the perspective of holding coins. In reality, there are still operations such as mortgaging FDUSD and borrowing ETH assets, conducting on-chain mining activities during the window period, and converting back during the mining period. Therefore, the choice should be made based on the specific circumstances of the user.
How long is the mining window period?
From the start of ACE mining to the end of SAGA, it lasted for 118 days, with a total mining period of 64 days and a window period of 54 days. Therefore, the average interval between each period is only 4.9 days.
So, after the end of mining, how much is the absolute return rate for buying BNB/FDUSD at the bottom, selling after the announcement, and not participating in the mining strategy?
For BNB, the absolute return rate for the above operation is 2.44%, which is higher than the absolute return of mining, which is 1.8%. Calculated based on the 4.9-day window period, the annualized return rate is 181.7%. However, the reuse of this strategy needs to consider the risk of BNB falling from its peak;
For FDUSD, the return rate for this operation is 0.3%, which is much lower than the mining return of 1.3%.
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