In a time of great market uncertainty many once hyped and active projects are now shrinking into obscurity. Binance on the other hand, is rapidly expanding its ecosystem and providing the Blockchain space the infrastructure it needs in order to take on the next wave of adoption. Binance is setting itself up to rise from this bear market’s ashes stronger than ever.
This analysis of Binance and its ecosystem will provide insight on what Binance is, the functions of the BNB token, and how it is developing itself into much more than an exchange by targeting the pain points faced in the industry today.
Table of contents
I. What is Binance?
II. What is the BNB coin?
III. The CEO: Changpeng Zhao (CZ)
IV. Binance is Not Just An Exchange: The Binance Ecosystem
1. Binance Info
2. Binance Academy
3. Binance Research
4. Binance Labs
5. Binance Launchpad
6. Trust Wallet
7. Blockchain Charity Foundation
V. Expansions to Africa
VI. Binance Angels
I. What is Binance?
In short, Binance.com is an exchange which specializes in Crypto-to-Crypto trades, however it does plan to implement fiat currencies at a future date.
Since its launch in July 2017 it has experienced explosive growth and is now ranked as the number one Cryptocurrency exchange by trading volume.
This explosive growth has been linked to a multitude of reasons, one of which being its ability to handle up to 1.4 million transactions per second: meaning that you won’t miss your trade due to a backlog of activity. Additionally, Binance offers incredibly competitive market rates for its trading fees: 0.1% on each side of the trade, or 0.075% if you use your Binance (BNB) tokens (more on this later).
Binance further encourage their users to hold and store their Cryptocurrencies on the Binance exchange, by enabling selected coins to be staked on the platform. This is a big benefit for those who wish to trade their coins regularly whilst still receiving financial rewards (GAS) for staking them.
They pride themselves on being an exchange for everyone (not that surprising when its slogan is ‘Exchange the world’) meaning that it has easy to use mobile and web platforms for beginners, and with the click of a button, a more complex UI for experienced traders.
What is Binance summary:
- It is a Crypto-Crypto exchange
- It can handle up to 1.4 million transactions per second
- It offers incredibly low trading fees of 0.1% or 0.075% when you use your BNB tokens
- Has a UI for everyone’s trading needs and offers both a web and mobile app client
- Selected Cryptocurrencies give out GAS
II. What is the BNB coin?
The BNB coin is the native Cryptocurrency to Binance. Its most obvious utilitarian value is its trading fee reduction capabilities on the Binance exchange for those who have purchased and hold the BNB coin. This use case means that as the exchange grows, so does the demand for the BNB coin: more users purchase the coin to take advantage of the trading fee discount, which drives its price up. Currently this rate of reduction stands at 25% however, it will half each year with the discount ending on the 5th year.
In the future, Binance plans to use the BNB coin as GAS to power a Decentralized Exchange (DEX). This should influence the adoption of the BNB coin in a similar way to its current fee reduction use case: As the exchange grows so will the amount of people who use the BNB coin as GAS, further increasing demand and driving up its value.
How many BNB coins exist?
Binance initially issued 100 million of these BNB coins to participants of its Initial Coin Offering (ICO), which was held in July 2017
A further 100 million coins have been held in reserves for angel investors (20 million coins) and the founding team (80 million coins). Out of these 100 million coins, the 80 million coins intended for the founding team will be locked up for a period of roughly 4 years from the date of product launch, entering the market in increments of 16 million coins for every year that passes.
Won’t this lead to high rates of inflation?
Kind of, but not really. Inflation, as described by the Oxford dictionary is a ‘fall in the purchasing value of money’ or in this case, the BNB coin. And although by default a Cryptocurrency will be worth less as more coins are injected into the circulating supply, Binance counteracts this quite nicely by using 20% of its quarterly profits to buy back and burn BNB coins. This will continue until 100m coins have been destroyed, which will rule out the entirety of the 100m injected BNB coins. What is clever about this implementation, is that it has the exact same effect as a dividend pay-out however, without having to meet the same strict security regulations.
Further deflation will occur past the point of the 100m coin burn as BNB is used as GAS to power the Binance ecosystem as well as fees being accounted for from on-chain BNB transactions.
To date Binance have released a total of 152m coins into circulation, with the current circulation standing at 142.8m due to the collective burn of over 9.2m coins. Accompanied by this 42.8% increase in the circulating supply has been an increase of 3000% in the price of each BNB coin. (not too shabby if you ask me). For the BNB coin to reach a point of inflation from its initial ICO price of $0.15 per coin it would have to inject roughly 4.4 billion BNB coins into circulation, which is a far stretch from its 200 million coin hard cap.
It is also worth noting that 90% of the workers at Binance accept their pay in BNB coins. This is a great show of optimism among those who know things about Binances future that we have yet to hear about.
What is the BNB coin summary:
- The BNB coin can be used to reduce trading fees by 25%
- It will be used as GAS for a DEX
- It has a hard cap of 200 M coins
- 20% of profits will be used to buy back and destroy 100 M coins (50% of total amount)
III. The CEO: Changpeng Zhao (CZ)
CZ is the founder and CEO of Binance. He has been involved in the Cryptocurrency space since 2013, after being introduced to Bitcoin by his friends Ron Cao and Bobbly Lee. Soon after, CZ started to work on various projects at Blockchain.info. He then in 2015 became CTO of Okcoin, the leading Cryptocurrency exchange in China at the time.
Prior to this, CZ had a career in developing matching engines for the Tokyo Stock exchange, and then later at Bloomberg. In 2005 CZ left his job at Bloomberg and founded Fusion systems: an exchange system provider, which was known for “some of the fastest high-frequency trading systems for brokers”.
This experience of developing matching engines, founding and running an exchange systems provider and being CTO of the largest Cryptocurrency exchange in china set CZ up perfectly to create Binance. It is no wonder as to why he says that Binance took 20 years to build, not 6 months.
As a CEO he is highly praised by many with Michael Arrington, the founder of Techcrunch, writing an article solely on why CZ is “the real fucking deal”. Not a bad comment coming from a man who has sat down with some of the world’s most successful business titans. In fact, he even went on to say that CZ was “right up there with the best of the best”. His most notable compliments of CZ included him being ‘thoughtful’ ‘strategic’ and ‘deeply human’.
What does his job rule entail?
His days are currently predictably unpredictable, with each day facing new challenges, thus a clear outline if his job role is possibly impossible at this point however, he stated in this article he wrote titled “A Typical Day for Binance CEO” what his atypical days may include. Some of these aspects to his job role are: Social media — approx 15–30 minutes a day, Communicating with Binance Angels, Traveling whilst listening to audio books and Time slicing. He is currently looking for a smart and ‘polite’ bot which will automate queries made to him. He is willing to fund this.
Give him a follow on twitter here to stay up-to-date with all news related to Binance. It is usually the first place that you will be reassured that your funds are safe/’safu’ in the event that the site has some down time. You can also expect a glimpse into the projects which they are building, not hyping.
IV. Binance is not just an Exchange: The Binance Ecosystem
The Binance Ecosystem is an expansion consisting of 7 new pillars which aim to serve Binances mission of ‘spreading the freedom of money’. The following segments will explore how each pillar works towards this mission by targeting a specific pain point faced in the industry today.
1. Binance Info
Binance Info is a hub of concise and informative information on Cryptocurrencies. Its purpose is to enable its users to quickly learn about each project along with the network and services it provides. This should help users make an investment decision, or simply learn more about a specific project without having to open 50 separate tabs.
At first glance it offers a user-friendly list of the top 100 Cryptocurrencies by market-cap with the header of the page displaying the 4 highest performing coins over a 24hr period. On this list users can see the price of each coin change in real time, the 24hr performance of each coin, the 24hr volume (both global and on Binance) as well as the circulating supply. This is similar to the popular coin tracking website ‘Coinmarketcap’ (CMC).
However, these similarities start to disappear once a coin from the list is selected. Binance info displays a vast range of information in an easily digestible way by providing the following:
- An up-to-date news tab on the Cryptocurrency and project
- The technical details of the Cryptocurrency
- A short summary of the Cryptocurrency and project
- Third party rating reports
Most notably of all Binance Info’s differences to CMC, the third-party rating reports offer a diverse range of unbiased information which can be broken down into consistent segments. Outside of the report users are met with two ratings of the project, one on a scale of 1–5 stars and the other being on a scale of a C — AA, with each letter stating to various degrees how likely the project is to meet its commitments. To view the report, you simply click a download button, which will show the full report of the project.
Given Binance Info’s similarities and positive differences to Coinmarketcap, it could very well rival its place as the go-to website for Coin tracking and information in the future. If this is to take place, the Binance exchange could see a very substantial stream of new users being referred to the platform. The reason being is that as it stands Coinmarketcap currently experiences an incredibly high number of traffic (hit 100th most viewed website in march 2018), with a lot of this traffic then being referred to various Cryptocurrency exchanges. If this initial traffic is to instead hit Binance Info, then its organic transition would be to move onto the Binance exchange. Binance Info could thus act as a funnel for new users to enter the Exchange.
Binance info Summary
- It is a Cryptocurrency price tracking website
- It is a library of coin specific information
- It is a hub of coin specific third party rating reports
2. Binance Academy
For newcomers entering the Blockchain space or even veterans wishing to refresh their knowledge, trying to come by all the right information and terminology can be a little overwhelming and even misleading at times. Binance Academy aims to solve this with a one-stop-shop for Blockchain and Cryptocurrency learning resources.
What is great about these learning resources, is that they come in an easily understandable format. No long confusing unnecessary words, just simple yet informative videos and articles on everything there is to know about Blockchain and Cryptocurrencies in one central location!
A feature of Binance Academy, which I personally use all the time, is the Glossary. It has hundreds of technical terms simplified all in alphabetical order ranging from a 51% attack to Zs-Snarks. Don’t know what these terms mean? Click here!
In the future Binance Academy aims to verify what their users have learned: perhaps through certification. This could then be referenced on someones CV or LinkedIn profile for example.
If you wish to submit content to Binance Academy click here
Binance Academy Summary
- It is an open access library of information regarding Blockchain and Cryptocurrencies
- Has a vast glossary offering definitions of Blockchain and Cryptocurrency terms
- Will create a way to verify what a user has learned at a future date
3. Binance Research
As an exchange, Binance needs to ensure that only quality coins make it to their platform. To achieve this goal Binance does extensive analysis of many Cryptocurrency and Blockchain projects. This has led to the creation of institutional grade research reports which Binance now wish to publish for everyone to see.
The goal of these reports is to increase ‘transparency and accuracy of information in the Cryptocurrency and Blockchain space’.
Binance Research have a particular upper hand in achieving this goal, given that they connect with ‘top officers and/or developers’ to confirm undisclosed or perhaps even unclear information regarding their Cryptocurrency and project. Some of this information may include private code development, token economics, governance and updated strategic direction.
Each report follows the same structure of covering 11 key topics ranging from an introduction to the coin, roadmap & updates, team overview and more. This vast wealth of unbiased information equips you with a great understanding of each project, aiding you towards making better informed investment decisions.
Binance Research Summary
- Produces institutional grade reports
- Unbiased and transparent information on top projects
- Behind the scenes information
4. Binance Labs
Binance Labs is a ‘social development fund’ which aims to invest, incubate and empower entrepreneurs in areas which need development within the Blockchain ecosystem.
Their mission is to ‘solve the problems which matter most to the ecosystem and change the world for the better’
The problems which they are trying to solve include:
Of which they aim to achieve with an investment focus on:
- Public Blockchain
- Decentralized Exchange (DEX)
- Stable Digital Currency
- Compliant ATS/Security Token Platforms
These investments will primarily take two forms: Direct investments and incubation.
Firstly, the direct investments will target teams who are very technical however, are potentially weak on their marketing and finance capabilities, as Binance is confident that it can help in providing those aspects: leaving the teams to focus on the product at hand.
CZ has stated that Binance do not expect to make an overall profit on these investments, relative to just holding their own BNB coin. Therefore, they are doing it from a point of wanting to progress the ecosystem.
Secondly, the incubation program will support top early stage teams, providing them with the help they need to jump start their best ideas.
This help will come in the form of a 10 week on-site program for successful applicants of the incubation program which will help the applicants to deliver a product/service with a product/market fit.
As part of this 10-week program Binance will provide the following:
- Seed Investment: $500k seed investment for 10% of the company
- Mentorship: Binance will introduce the ‘best mentors’ from both Crypto and the start-up scene who will support the applicants journey
- Network: Notable founders will attend the course every week to help the start-ups grow their network
- Support Services: Resources will be provided so that start-ups can focus on building products/services
The Binance Labs incubation program will take on 8–10 companies roughly every quarter. Follow Binance labs on twitter to stay updated on when to next apply.
What is Binance Labs summary
- It is an investment fund of $1B
- It aims to solve the current problems the blockchain ecosystem faces
- They will make both direct investments as well as run an incubation program
5. Binance Launchpad
Since the boom of ICOs in April 2017, many false actors have seen this as an easy way to make money, without much to any regulation getting in the way of doing so. This has led to multiple scams taking place, and organisations with a whitepaper being able to raise 9 figure sums during their ICO. It is suggested by Statis Group, an ICO advisory firm, that over 80% of ICOs conducted in 2017 were scams.
Binance Launchpad, which is a platform for projects to raise money through conducting an ICO, aims to combat these issues in the market. It will do so by rigorously vetting each project and making sure that they are conducting an ICO for the right reasons. If Binance is to determine that the Project in question has potential however, would not benefit from conducting an ICO, Binance may look to independently fund said project instead. This adds a further level of trust when investing in projects on the Launchpad, as you can be certain that each token will serve a purpose.
Some further issues which can arise when investing in conventional ICOs is the security of your funds being compromised, or the team behind the project having no vesting plan for the invested money. Again, the Launchpad will offer greater financial security to both the project and the investors than what would normally be expected if the project were to run the ICO Independently. Binance will also hold the money raised during the ICO in a vesting plan which they will release to the project over an extended period. If the project seems to be making little to no progress after the ICO is conducted, then Binance will return all unspent funds back to the original investors: A much needed form of security on your investment in the ICO space.
The Launchpad is there to serve the needs of both the investor and the Project.
Investors will have the confidence of knowing that the project has been thoroughly vetted, their investment will be vested and secure, and if the project stops building, the investor will receive back a percentage of their original investment. Furthermore, investors of the BNB coin will benefit as the only accepted currency for ICOs on the launchpad is the BNB coin. This means that as the launchpad releases more ICOs, demand will increase for the BNB coin, further driving up its value.
Projects will have confidence in knowing that their funds are secure and that their ICO will hit a larger focused audience. This should enable them to dedicate their energy to delivering their project.
Binance Launchpad Summary
- Platform for investing in researched / vetted ICOs
- Increased security on your investment
- Projects can reach a larger focused audience
- Empowers projects to focus on delivering their project
6. Trust Wallet
Typically, when making the switch from a centralized wallet to a decentralized wallet, you face various drawbacks: Such as not being able to easily trade your funds at any giving time, or having to deal with a poor UX.
Binance’s official decentralized wallet ‘Trust Wallet’ aims to get rid of these drawbacks by offering an ‘easy-to-use, all-in-one package’ for you to trade, make payments and interact with decentralized applications (DApps) whilst improving your security and privacy.
From the Trust Wallet app, you can easily send and receive on chain Cryptocurrencies payments similarly to most decentralized wallet services. Where Trust Wallet starts to differ, is in its built in Web3 browser, allowing you to seamlessly connect your wallet to decentralized exchanges to trade your Cryptocurrencies efficiently and quickly.
Further features from the Web3 browser includes being able to interact with a vast range of tested DApps, including games, social media platforms, marketplaces and more.
When setting up an account with Trust Wallet you are not required to provide any personal information, keeping your funds completely anonymous.
Furthermore, Trust Wallet will not store your private keys, instead they will be stored locally on your device: adding a further level of security to your digital assets.
Trustwallet acts as a great tool anonymously and securely interacts with your funds whilst experiencing everything which DApps have to offer.
Summary of Trust Wallet
- Securely and anonymously store your Cryptocurrencies on a decentralized wallet
- Private keys are stored locally on your device
- Trade your Cryptocurrencies at any time with connected DEXs
- Send and receive Cryptocurrencies through QR codes and addresses.
- Explore various DApps through the build in Web3 browser
7. Blockchain Charity Foundation
The Blockchain Charity Foundation (BCF) has been created by Binance to increase overall charity transparency through the utilization of Blockchain technology, as well as to provide Blockchain tools to the bottom billion people in the world with a mission to end poverty worldwide. The BCF believes in using Blockchain for social good.
This transparency initiative will come in the form of a 3–4-layer donation system which will be tracked on the Blockchain. Donors will firstly send their Cryptocurrency to a BCF charity program of their choice. BCF will then send the funds to its charity partners who will spend the money on the ultimate beneficiaries. This should allow the Donor to track exactly where their donation goes to through the Blockchain. It is also worth noting that Binance will cover all admin costs so that 100% of your donation reaches the intended recipient.
Here is an example of this process
It is expected that these future partnered charities will include many whose goal is to achieve the UN sustainable development goals by 2030.
Aside from directly donating money to charities and causes, BCF will also focus on direct Blockchain Philanthropy. This will involve BCF creating Blockchain-empowered social programs through working with grassroot communities to solve local problems, with a further aim of promoting an education and youth getting involved with blockchain.
Binance have recently started donating 100% of their coin listing fees to the BCF, a great stride in the right direction which I hope other exchanges will be soon to copy. They have also previously raised $1.41 M for the west Japan disaster relief during Japan’s floods in 2018.
Blockchain charity foundation summary
- It will create a transparent 4-layer donation system on the Blockchain so that donors can see where their money goes
- Binance will cover 100% of the admin fees so that your donation reaches the end beneficiary
- Donations will target the UN sustainability goals
- BCF will create Blockchain-empowered social programs and promote a Blockchain education
- Binance are donating 100% of their own listing fees to charities
V. Expansions into Africa
Binance believes that Africa has the potential to be the Continent of the 21st Century and as a result, is investing in its future.
This contrarian investment as outlined by Benjamin Rameau in his article titled ’10 reasons why Binance Labs is fully committed to Africa’ brings up various points as to why Africa could benefit from Decentralization and Blockchain technology.
He talks of Blockchain as being a disruptive technology to developed financial systems whereas in Africa it has the potential to create new financial systems where there previously were none.
This could lead to incredibly fast adoption rates of Blockchain tech in these areas, in which the peoples’ first interaction with a financial system is one where Blockchain plays a fundamental part. Which when combined with the young median age of the African population, who tend to embrace technological change more so than the older generation, makes for an excellent ground for adoption in Africa: they could end up being the leading Continent where Blockchain technology is utilized and innovated.
Binance has already started to invest in this future with the creation of a Cryptocurrency exchange in Uganda, which saw 40,000 users in its first week of trading. A great sign of the future adoption to come.
Binance believes that investing in Africa today could be the best trade of the century.
VI. Binance Angels
Binance has a group of volunteers called ‘Angels’ who dedicate their time and effort towards helping Binance grow, with a focus on the community.
They do everything from answer your queries, help new users use the platform, translate content, moderate Binance communities, assist in organizing events/meetups and much more.
They are a great set of incredibly helpful and unselfish people who support Binance and their vision to change the world with Crypto.
If you are interested in helping and being a part of Binance then click here to find out more about what responsibilities that you will have and what perks you will receive!
To apply to be a Binance angel click here
How many companies have a vision so strong that it has a group of volunteers with a goal of helping see that vision materialize.
In 15 months, we have seen Binance grow from being a Cryptocurrency exchange, to arguably the most influential organisation in the Blockchain space. It has used its exponential growth to expand its ecosystem in 7 major ways: each pillar targeting a different pain point faced in the industry today.
Binance is working towards setting the stage to showcase the world everything Blockchain technology has to offer. Whilst making sure that the infrastructure is ready for this next wave of adoption.
I believe that Binance will play a fundamental role in developing the Cryptocurrency ecosystem and will go on to be one of the most recognized companies out of the Blockchain revolution, just as companies like Amazon and Microsoft came from the Internet revolution.
At Binance’s rate of innovation, who knows where it will be in 15 months or even 15 years. One thing I am sure of however, is that it is here to stay. So pick up your BNB coins and come along for the ride.
If you are looking to create an account with Binance then follow this link: https://www.binance.com/register.html
Thanks for reading through this very lengthy post! If you enjoyed it then feel free to give it a ‘clap’ (or 50 of them) and give it a share with a friend. You can follow me on Twitter or Medium @DavidBCherry for more similar content. Also, a special shout out to Binance Angel @crypto_han for supplying me with some great images to post!