Bitget's On-Chain Analysis by Bubblemaps

Centralized exchanges (CEX) play a pivotal role in crypto, providing users with straightforward access to their tokens for trading. Major CEXs, such as Binance, have established themselves as significant institutions and preferred entry points for newcomers to the crypto world.

However, the collapse of FTX, the current bearish market, and new regulations are testing these crypto giants. Recently, Binance faced a record $4.3 billion fine in the US, and its iconic CEO, CZ, was forced to resign. In this tense climate, one particular CEX has caught our attention.

Bitget: An Alarming Tokenomics?

Founded in 2018, Bitget quickly rose among the largest CEX, with over 20 million registered users to this day. Its $BGB token offers various benefits, ranging from trading fee discounts and airdrops to staking rewards and platform governance participation.

With Bitget's growth and increasing user base, the valuation of BGB reached $700 million, positioning it in the top 100 cryptocurrencies by market cap! However, our analysis reveals that almost the entire BGB token supply is held by the Bitget team, and distributed across about ten wallets.

This is confirmed in Bitget's whitepaper, which reveals a huge centralization of the $BGB token. Indeed, only 25% of the total supply is allocated to the public, but even this portion seems largely deposited on Bitget itself. This implies that, although these tokens are initially acquired by users, it ultimately ends up in the platform's hands.

The remaining 75% of the $BGB supply is directly controlled by the Bitget team. Thus, almost the entirety of $BGB tokens is, in one form or another, under Bitget's control—either in direct possession of the team or deposited on their exchange platform.

This observation, supported by the whitepaper and our on-chain analyses, raises questions about token distribution and decentralization. Moreover, although the whitepaper mentions a vesting plan, our research has not confirmed its effective implementation, leaving doubt about transparency and token management by Bitget.

The recent collapse of major centralized exchanges like FTX serves as a reminder of the importance of tokenomics. FTX's token, FTT, was highly centralized, with only 14% of the supply available to the public. FTX also distributed FTT tokens to Alameda Research, which used them as collateral for significant loans. This led to a liquidity crisis when Alameda's balance sheet was disclosed. For now, Bitget does not seem to be following this trajectory. The team has retained full control of its BGB tokens, reducing dependencies and avoiding cascading effects.

In comparison, Binance's native token, BNB, had a more balanced distribution at its launch in 2017:

• 50% for the public

• 40% for founders

• 10% for angel investors

Today, the distribution of BNB and associated liabilities are under investigation by the SEC, notably following the resignation of Binance CEO CZ.

The Bitget team's almost 100% control of the $BGB supply raises concerns, as does the lack of transparency surrounding their vesting plan. Nevertheless, the absence of institutional investors could protect Bitget users from a scenario similar to FTX's.