How Binance Became an Industry Leader

The Binance Path: From Nothing to Leader

The first crypto exchange, Mt.Gox, was founded in 2010 by Jed McCaleb as a platform where Bitcoin could be easily bought and sold. Due to the fact that there was no alternative, it was rather easy for the crypto exchange to grow: during the first three months, its trading volume reached 187,000 BTC.

Since then, the number of crypto exchanges has grown exponentially, and the industry has changed and suffered difficulties over the years. The main idea of the crypto-exchange industry is to create an eсosystem in which users can safely and easily trade, exchange, or even store their coins. However, the development of the industry is connected with a large number of scandals and failures. Some crypto exchanges didn’t manage to survive for even a year; others lived a bit longer, but were closed due to the inability of their founders to provide better service for clients in terms of security, usability, etc.

It is important to distinguish the most common reason that exchanges fail: security. Since 2011, there have been many cases in which an exchange was hacked and the users’ coins were stolen.

One of the loudest recent hacks happened to BitHumb, a South Korean crypto exchange which is one of the largest in the world. In June 2017, some users noticed strange activity on their accounts. After investigation, it was determined that hackers gained access to the accounts and personal information of approximately 3% of users, which they used to withdraw funds. One user even claimed he had lost more than $1 million.

It appeared that the personal computer of one of the exchange’s employees had been hacked. Hackers used it to retrieve access data of more than 31,800 users. There was no specific sum announced in connection with the theft; however, news sites claim that tens of millions of dollars had been stolen.

This is why security issues are so important when it comes to the crypto exchange industry. The companies that manage to solve security issues have a good chance of succeeding, as Binance did. On Binance, 2FA authorization permission was implemented, which is hard to for hackers bypass.

Moreover, Binance’s internal security is also considered reliable, as the exchange managed to cope with the hacking attempt that took place in March 2018. However, implemented security measures are not the only reason for Binance’s success.

The History of Binance

In 2016, nobody had heard about the Binance exchange, but in the summer of 2017, the Binance ICO attracted $15 million. The target audience of the company consisted mainly of Chinese users. Thus, the restriction of any activity connected with cryptocurrency by the government became a serious challenge for the crypto exchange. However, without regard to the difficulties connected with the ban of ICOs in China and strong competition from other crypto exchanges, Binance managed to become a leader among crypto exchanges. After the ICO ban was introduced, Binance moved to Malta, which has been proven to be the country offering the best legislation for crypto-related projects.

The average trade volume of the exchange is 1–2 billion per 24 hours; at its peak, it reached $4 billion USD.

Binance trade volume. Source:

There are currently 385 currencies, and trade volume for the most popular currency, Bitcoin Cash, makes up to $100,000,000 per day. As we can see from the diagram below, the trade volume of Binance is one of the largest of all exchanges.

Comperative diagram

The success of the company has been confirmed by the fact that developers have already produced more than 99 million BNB tokens, the price for which is $9–10. Such indicators confirm that the general capitalization of Binance is already at more than $2 billion. Also, the exchange makes a profit from each operation carried out by users — more proof that Binance is one of the most successful projects in the history of the development of the cryptocurrency industry.

Binance was also projected to be the most user-friendly and client-oriented exchange. Due to the results shown by the exchange, its founders have managed to reach that goal.

In January, Zhao Changpeng, Binance CEO, reported that the company’s support services had been processing several million new applications for registration weekly. This rate of adoption has forced the management of the company to limit registration.

Binance also carries out a referral program for users, which ensures that they receive a 20% commission from their referrals payments.

The long list of tools on the website is the main reason for the success of Binance. The exchange maintains a huge list of cryptocurrencies, among which almost all BTC forks are available for trading.

Disclosing the Reasons for Binance’s Success

Let’s get more specific about the reasons Binance has managed to become one of the most popular trade platforms in the crypto industry. In fact, there are four innovative features that have allowed Binance to become so popular:

  • high withdrawal limits for users without account verificatio
  • trade-platform token (BNB) and low fees
  • referral program
  • Community Coin per Month program

Withdrawal Limits

On Binance, you can easily withdraw up to 2 BTC per day without verifying the account. This is the unique feature of the trade platform, which makes it much more comfortable to use compared to other exchanges. For example, in OKex, you cannot withdraw funds before your account is verified, and for Poloniex, the withdrawal limit is $2,000 for unverified accounts.

After account verification, you can withdraw up to 100 BTC per day. Of course, most users do not really need to withdraw more than 2 BTC. There is one more reason this feature makes the Binance more competitive: usually, account verification can take up to 2–4 weeks on crypto exchanges, which is too long. Due to the fact that you cannot withdraw a significant amount of funds before verification, the possibility to trade and withdraw immediately after registration is an advantage.

BNB Token and Low Fees

The BNB token is one more reason Binance has been able to attract many users. The thing is, the platform charges fees for the execution of an order. If the trade is made in BNB, the fee is 0.05%, while for all other operations, the fee is 0.1%. For now, BNB is worth $9.83, and the exchange’s administration helps maintain the price of the token in order to make it an optimal option for transactions.

Binance plans to use 20% of the platform’s profits to maintain the BNB price at the current level, and, if necessary, to provide low, stable fees.

By the way, the low fees introduced by Binance have also contributed to the platform’s success, as the lowest fees for other popular exchanges are introduced by Huobi and Bitfinex (0.2%).

Referral Program

The Binance referral program was a breakthrough that attracted many new users. The program terms were the best as for crypto exchanges at the time of launch; you could get 20% of the attracted user’s deposit.

Community Coin per Month Program

Binance is a crypto exchange in which you can choose from dozens of tokens and cryptocurrencies to trade, and the platform keeps increasing the number of trade pairs. To consider the opinion of users, the trade platform conducts the Community Coin per Month program, which allows users to vote for the token they want to have added the next month.

Binance’s Plans and Challenges

One of Binance’s major plans is to create fiat-to-crypto exchanges on all the continents where this is possible. For now, an exchange has been opened in Uganda, where people can exchange Ugandan shillings on crypto. The exchange is not working yet; the specific date when it starts operations will be announced later.

Binance has allowed users to register before trading has really begun, however, and has implemented promotions to incentivize the use of the Binance Uganda platform:

  • zero fees for the first month of usage
  • 0.5 BNB to the first 20,000 users

This will allow the legitimization of Binance and make the crypto more accepted in countries where such exchanges are in use. As Zhao Changpeng (Founder and CEO of Binance) says,

“It is much easier to expand such initiatives in small countries, as they appreciate more the income Binance generates for their budget, and define the acceptance of crypto as a good driver for their economies.”

This is why it is much easier for the company to operate in countries like Malta, Singapore, etc.

Making strong connections between crypto and fiat will make Binance the largest operator for crypto-fiat operations, as it will be:

  • Safe: regulated by local governments
  • Easy: simple exchange operations available
  • Convenient: It is going to be as easy as buying/selling fiat currencies on regular exchanges.

Another important plan of Binance is to create an STO exchange in collaboration with the Maltese government. On this exchange, people will be able to purchase security tokens. These tokens have big chance of being accepted by the world’s major countries; much has already been done much to get them accepted in the U.S. The STO looks like shares in the classic companies, and the two share many common features. This will allow the crypto industry to get regulated and become safer.

In one of his interviews, Zhao Changpeng also mentioned that there are plans to make Binance decentralized in the future. In this case, the role of the BNB will change: it will function as gas on the basis of which smart contracts for trade orders will be concluded.

However, there remain challenges for Binance and for the whole crypto-exchange industry. Most of these challenges are regulation issues.

This has already affected Binance: the company had to move from China and seek a new home, which it found in Malta. In the future, there will be many other regulatory issues related to:

  • The status of cryptocurrencies. For now, there are 385 currencies presented in Binance, and the number is growing. These currencies will have to be accepted by governments, and those that do not accept it will have to be excluded from the listing.
  • KYC issues. Today, you can withdraw up to 2 BTC without verification — a phrase that totally doesn’t work for fiat currencies. Payment systems and banks today have much stricter terms for verification of such a sum. This issue must be solved for Binance in a manner that will allow the exchange to remain user-friendly. Moreover, there are only 200 people working in Binance, and more than 10,000,000 registered users. Just imagine how much work will need to be done to verify all the users that exist now. Actually, KYC issues play a large role in the future of crypto exchanges.

Along with regulations, there are also other challenges in the form of growing competition from other crypto exchanges. With its rapid growth, Binance has shown that theirs is the most successful business model that other exchanges or new exchanges can adopt in order to become serious competitors.

Another serious challenge is the rise of decentralized exchanges. Decentralized exchanges allow users to trade without intermediaries, which ideally corresponds to the philosophy of blockchain. On blockchain, all deals are made based on smart contracts that users create to conduct transactions with each other.

However, there is one thing that allows centralized exchanges like Binance to remain ahead of the game: the time of trade-operation execution. On Binance, a deal can be executed promptly, which is still impossible for DEX. This issue can only be solved if a general solution for scalability problems is found.

This is a significant issue due to the fact that for traders, the time of execution of a deal is very important, especially for those who deal with margin trading. This is why DEXs are not so popular, and why there are few of them.


There are many ICOs that have collected more than $15,000,000, but none have reached success as quickly as Binance. Even though there were already more than 100 crypto exchanges when Binance was launched, it managed to take leadership, and really has become one of the most frequently-used platforms for traders.