Within the cryptocurrency environment, Binance is a well-known name for everyone. Not only are they second in most trade pairs offered, at 467, but they have maintained themselves among the top 10 exchanges in terms of trading volume for most of their active lifetime. On top of that, they took another step forward and launched their own blockchain, with a cryptocurrency that has climbed the charts to get the 7th spot in market capitalization, launching many years later than the top competitors.
But how did a platform so similar to existent ones manage to take the whole market by storm? Did they got ahead of their competitors by mere technological improvements, like lower latencies and more trade pairs supported? Or was the introduction of the Binance Coin what made them thrive in this ever-changing environment?
A confident beginning
Conceived by a team that comprised nearly 15 years of experience (for example: their CEO, Changpeng Zhao, is the founder of BijiTech and OKCoin), Binance learned from their competition at the time, and decided to work hard towards correcting the mistakes they’ve made.
Binance launched in July of 2017, nearly 5 years after the launches of other great exchanges like Coinbase and Bitfinex, offering a much higher capacity for transactions per second (which has climbed up to 1.4 million), higher stability to handle multiple millions of simultaneous users and helpful, multilingual customer support. All those characteristics are still maintained, along with their simple-to-use interface, and are the foundation of Binance’s great reputation among investors.
Another great move the Binance team decided to make was to move their headquarters to the crypto-prosperous island of Malta, where they could keep growing under more forgiving laws and less restrictions.
Running before walking
Two weeks before launching, Binance started an ICO for what would become their own cryptocurrency, the Binance Coin (BNB), which would give the users a 50% discount in all trading fees when transactions were made using the coin.
This ICO reached is goal of $15 million in only 3 weeks, which represented a high interest from the potential users into using the platform. Investors would already own enough BNB to make their trades through Binance, while saving a significant amount of money when compared to trading through other exchanges.
During the following year, Binance maintained healthy trading volumes across their major crypto pairs, achieving a massive userbase and listing more and more trading options, while also keeping close track of unpromising coins, delisting them quickly. This quality assurance process was also a hugely attractive aspect for potential users.
Another great feature they offer is Binance Launchpad. This platform would begin the trend of IEOs that took over the traditional fundraising model of ICOs, giving new projects the benefit of being supported by such a huge name, while also working as a source of liquidity for the exchange.
But this was not the first big leap the Binance team took. Back in March 2018, less than a year since launch, they announced that they were looking into the development of their own public blockchain, which would become the base of their future projects. In December 2018 they revealed a possible time window for the launch, and it finally came to light in April 2019.
Breaking the rules, setting new ones
Binance’s philosophy is that centralized and decentralized markets and exchanges can coexist with each other. Developing their own blockchain would mean they can launch the first decentralized exchange, since all its transactions and user information would be stored in a distributed ledger. Binance DEX (Decentralized Exchange) launched after two months under test, in which user feedback was very positive.
“With no central custody of funds, Binance DEX offers far more control over your own assets. We hope this brings a new level of freedom to our community. We will work closely with projects and teams to grow the entire ecosystem.” – Changpeng Zhao
Besides that, the BNB token has been from ERC-20 to BEP-2, becoming the main asset of the blockchain, which supports a high amount of digital wallets, including one of their own, the Binance Chain Explorer (allowing users to look for specific hashes and blocks) and data APIs.
What has made Binance triumph among their competitors is their drive to keep going one step further than everyone else. They are not afraid to take risks and experimenting with implementing existing technologies for new uses, giving them the spotlight every time they make an announcement.
Even if other exchanges have surpassed them in terms of trading volume, Binance has kept their spot within the top 10, and they will remain being a major influence over how the rest of the top exchanges evolve to better suit the needs of their growing userbases.