Binance dominates the crypto exchange space by a large margin. It was able to achieve this in less than 10 years of its existence. It was launched in 2017 by Changpeng Zhao (AKA CZ) at a time when Coinbase and Bitfinex were the market leaders. By focusing on user experience and community building, Binance has become one of the most popular platforms for not just exchange but also crypto listings. If there is any new token coming on the market, you will most likely find it first on Binance. (Source: https://www.coinspeaker.com/guides/upcoming-binance-listings/).
Humble Beginnings With Big Dreams
It all started in July of 2017. CZ was a software developer who knew how the finance system worked. He gained experience by working with Bloomberg’s Tradebook, OKcoin, and the Tokyo Stock Exchange.
When the company was launched, the crypto exchange market was already saturated. Binance started through an initial coin offering (ICO) and raised about $15 million in funding. In about six months, it had become the 376th most visited site in the world, but this growth hit a setback as China decided to ban cryptocurrency exchanges.
Most of Binance’s customers were Chinese, and this made the platform lose most of its users. Due to this ban, Binance had to relocate from China to Japan and then to Malta, which had crypto-friendly laws. This change also showed that Binance wanted to become a global exchange. While many of its rivals struggled, Binance was able to expand by adjusting to the laws of nations that were crypto-friendly and refusing to rely solely on China’s regulatory environment. Today, its daily trading volume is about $217 billion from over 280 million users globally.
User-First Approach
One of Binance’s key strengths has been its focus on the user experience. Binance offers trading fees as low as 0.1% per trade. It also gives discounts to users holding its native Binance Coin (BNB).
Unlike many early exchanges that offered limited token options, Binance offered support to many digital coins, which attracted a lot of users who traded outside the Bitcoin and Ethereum networks. Binance touched the pain points of its users and spoke to them like real people.
It didn’t approach its users like a corporation, which is what most companies in finance do. Instead, it spoke and listened to its users as if they were partners. This makes sense because, in essence, its P2P users are like their partners. Without them, the feature would be useless. The Binance team interacted with social media users, ran crypto giveaways, and also hosted Ask Me Anything (AMA) sessions to build loyalty and community. Rather than build a customer base, the company built a community and earned its trust.
Binance also introduced a competitive referral program, which gives a 20% commission to users who refer new customers to the platform. This referral program has been effective as it has spurred users to promote the platform. From this referral program, a user was able to earn about 76 BTC, worth over $9 million today.
Binance also gained the attention of users because of how simple its platform was. At the time, crypto was still a novelty, and very few truly understood it. Its simple interface allowed beginners to quickly onboard and begin trading instantly. Not only was it fast and easy, but it was also secure. These were the features the company made sure to promote aggressively, and users got the message. Binance also made frequent updates to its platform, adding new features to improve efficiency and keep its users engaged.
Building The BNB Ecosystem
Launching the Binance Coin (BNB) added a unique feature to the platform as it became the foundation of the Binance ecosystem. Initially, BNB was used to give trading discounts to customers, but after launching Binance Smart Chain (BSC) in 2020, BNB became a household commodity. It now powers the Binance ecosystem. BNB holders can now use it for staking, paying transaction fees, and also to buy products online, which makes it more interesting to invest in the coin.
Strategic Acquisitions and Innovation
The crypto ecosystem is a fast-growing one, and somehow, Binance has managed to stay ahead of the curve. In a way, it operates similarly to what Apple does for the mobile phone market; always pushing for innovation and introducing new trends before competitors.
In 2019, it launched Binance Futures, giving traders access to leveraged trading. It also introduced Binance Launchpad to host token sales for promising blockchain projects, which made Initial Exchange Offerings (IEOs) popular. It also launched Binance Earn, which is an opportunity for users to stake and save products. It later launched Binance Pay and Binance Academy. While Binance Academy serves as a learning center for blockchain, Binance Pay is a cryptocurrency payment gateway. Additionally, it launched an NFT marketplace and, most recently, Web3 wallet integration.
But it doesn’t end there. The company also made key acquisitions to expand its customer base. In 2018, the company bought Trust Wallet, and in 2020, it bought CoinMarketCap, which is one of the most visited cryptocurrency data platforms. It has also acquired companies like Sakura Exchange Bitcoin, GOPAX, and recently, Sim;paul Investimentos, a Brazilian brokerage.
Binance also partnered with Simplex, a payment processor that enabled its users to buy cryptocurrency with their debit and credit cards. Binance has partnered with non-crypto brands and celebrities like Cristiano Ronaldo to expand its user base.
All of these strategic moves only go to show that Binance is not here to play, but here to stay.
Going Global Despite Crises
Binance’s journey hasn’t been an easy one, as it has faced its own share of struggles. Apart from the regulatory setback in China when it started, it has also faced pressure from different governments, like bans in the U.K. and the U.S., as it sought to expand. It has also been subject to hacks, the most notable being the 2019 hack, where about 7,000 BTC was stolen, and the 2022 incident, where cybercriminals stole about $570 million.
CZ resigned from his position as CEO in 2023 following a guilty plea in the U.S.
During these incidents, Binance upgraded its security protocols while maintaining communication with its community throughout these times of crisis, assuring unaffected customers that their assets were safe.
The company used its Secure Asset Fund for Users (SAFU) to cover damages during the 2019 incident, where over 7,000 BTC was stolen. It also cooperated with the government during periods of federal investigations.
Conclusion
For Binance, becoming the largest cryptocurrency exchange in the world didn’t happen all of a sudden. It took years of strategic planning and thinking to get to where it is today. The company has redefined what it means to become a crypto exchange.
When it first launched, no one could have predicted that it would become the world’s largest crypto exchange, except them.
Even though CZ is no longer the CEO, the platform is still operating with his vision. The new heads of the company are focused on implementing innovative features, growing its affiliate networks, and working relentlessly to comply with regulations. Although the path ahead may be challenging, Binance is on track to maintain its position as the global leader of the crypto industry.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
