Three-year exam, Binance handed in papers
Produced | Odaily (ID: o-daily)
Produced | Odaily (ID: o-daily)
For most companies, three years is the first life and death line. Statistics show that the average life expectancy of Chinese SMEs is only 2.5 years.
In the crypto world where turnover is more frequent, corporate lifespans are shorter. According to data from the China Academy of Information and Communications Technology, the average lifespan of blockchain projects is about 1.22 years, and 92% of blockchain projects have failed; data from Enterprise Check shows that the average survival time of Chinese blockchain companies (a total of 4,070 companies) is only 16 years. months.
Even if they barely survived the life-and-death line, without a deterministic business model, the survival of most encryption companies is still worrying.
But for Binance, in the first three years of its life, it not only survived, but also achieved rapid development.
According to statistics from Odaily, since its establishment, Binance has accumulated more than 1.23 billion U.S. dollars in revenue; even in the cold market of 2018, the revenue is still close to 450 million U.S. dollars.
As the world's leading exchange, Binance, which is "not short of money", has continuously expanded its business territory, and eventually formed a comprehensive blockchain company integrating trading, mining pools, investment, wealth management, public welfare, technology research, and industrial ecology.
However, today's "Big Mac" was just a member of thousands of unknown exchanges three years ago. The rise of Binance not only contains historical opportunities, but also cannot be separated from the correct choice and unremitting efforts of the team.
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How did Binance grow to become the largest crypto exchange?
"Standing on the air outlet, pigs can fly." This is the famous theory of Xiaomi CEO "Rebus".
The opportunity of the times is important, but what is more critical is how the authorities assess the situation and make good choices. After all, after the era of Qiming e-commerce, only Ali and JD.com came out on top (now there are more latecomers Pinduoduo), where are the other runners now?
The strong wind blew by, and the ones who fell were "unpretentious pigs".
The same is true in the field of encryption.
The development history of Binance is inseparable from the era background of the vigorous development of the entire encryption industry, but more importantly, the Binance team has a forward-looking vision and has seized three historical opportunities (spot, IEO, contracts), and has become a Head flow.
(1) Locate the spot and look at the world
In July 2017, Binance was established, and how to survive in the industry has become the first problem facing us.
At that time, ICO ignited the market, and exchanges sprung up like mushrooms after the rain, but most of them wanted to cut a wave of leeks and leave, and chaos abounded.
Different from other exchanges, Binance, which has a keen sense of policy, has positioned itself as an international trading platform since its inception, expanding its target users to the world, avoiding the competition in the domestic stock market; and only allowing currency-to-currency transactions to avoid touching fiat currencies Regulatory restricted area.
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(Binance traffic grew rapidly from August to November 2017, the picture comes from Zhihu WEISI)
(2) IEO wealth creation effect
Throughout 2018, Binance maintained its position in the spot market and made no major moves.
This situation has changed until 2019. At the beginning of the year, Binance launched IEO (Initial Exchange Offering) for the first time, injecting new vitality into the spot market that had been depressed for half a year.
In particular, BTT, the first IEO project, opened ten times. The huge wealth effect also made Binance earn enough attention. Subsequent IEO projects have pushed Binance traffic to rise in a straight line, and the market value of the platform currency BNB ranks among the top ten in the world (the highest is sixth, and it is currently ninth).
Binance has also set off a new wave, with exchanges scrambling to start IEOs. However, after the model was overthrown, many projects were broken and encountered rights protection, and disputes continued. At this time, Binance slowed down the IEO progress, selected more high-quality projects, and avoided disputes.
"The reason for the decrease in frequency is that there are fewer good projects. There are many projects that want to ask us for IEO, but few projects can pass our assessment in the end. In addition, the communication period between us and the projects is relatively long, so everyone feels that we The frequency is decreasing.”Binance founder and CEO Changpeng Zhao accepts an exclusive interview with Odailywas explained.
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(IEO revenue, picture from Cryptorank)
(3) The contract is king
In the second half of 2019, Binance again focused on derivatives contracts.
Starting in 2018, spot market transactions were weak, and contract transactions began to flourish. Especially in 2019, contract exchanges emerged on a large scale, and Bakkt, a subsidiary of Intercontinental Exchange, also opened futures trading. This year is also known as the "first year of Bitcoin futures contracts".
On September 2 of that year, Binance announced the acquisition of the derivatives JEX platform and entered the derivatives trading; a week later, Binance officially announced the launch of Bitcoin contracts. Especially this year, Binance has continuously improved contract trading at the speed of launching one contract a week; and launched option trading to enrich the category of derivatives.
Binance's series of actions once again captured traffic. Skew data shows that the current daily trading volume of Binance Bitcoin contracts is 1.4 billion US dollars, ranking third in the world, and the comprehensive trading volume of Binance Futures is always in the top four list.
In addition to derivatives, Binance, as a full financial service platform, has also successively launched OTC, lending and other services, and the network effect has been enhanced, which not only improves efficiency, but also enhances security.
(4) Act after making a decision
Do the right thing at the right time. Binance's current achievements are the rewards of quickly launching new businesses, choosing the right focus, and seizing the market.
In fact, every attack of Binance is based on planning and then moving, using the minimum cost of trial and error to achieve the maximum effect.
"If you look at the entire development history of Binance, Binance is not the first to jump out of this kind of trading products, but we can iterate on the basis of our predecessors." Co-founder of Binance He Yi told Odaily.
Of course, not all hot spots will follow up.
In 2018, "transaction mining", Binance was absent; in 2019, "Resonance Coin", Binance was absent again. The "absence" is to protect the interests of users, and Binance's prediction was proved to be correct afterwards. These "absences" helped Binance maintain the reputation of users and avoid disputes.
In the end, Binance grew into the world's leading crypto exchange and was listed on the Hurun Research Institute's "2019 Hurun Global Unicorn List", ranking 138th with a valuation of 15 billion yuan.
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(BNB destroyed)
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Multi-line development, casting a comprehensive blockchain group
For enterprises, the business is too single, which is not a good thing. A mature enterprise will continue to expand its business boundaries and explore new growth points on the premise of maintaining its pillar business.
After the trading business has become the top stream, Binance is also seeking transformation, mainly focusing on multiple dimensions such as investment, technology research and development, new businesses (such as mining pools) and charity.
(1) Investment
In the past two years, Binance, which is "not bad for money", seems to have been buying, buying, and buying.
In 2018, Binance acquired Trust Wallet to become the official wallet, which is also the first acquisition project. According to the 2019 annual report, the number of Trust Wallet downloads doubled in 2019, from 500,000 to more than 1 million; Trust Wallet supports more than 100,000 assets, helping Binance better manage assets.
Binance Labs also incubated 21 blockchain projects in 2019 and directly invested in 14 blockchain projects, 3 more than in 2018.
In addition, according to Changpeng Zhao, Binance conducted a total of 9 wholly-owned acquisitions in 2019 (JEX, DappReview, WazirX, etc.); including FTX, a total of 21 companies have been invested, of which the first investment in TravelbyBit was made globally in 2019. Flights and hotels have also been booked more than 1 million times.
This year, Binance even acquired CoinMarKetCap, the world's largest encryption market website. According to foreign media reports, the purchase price should not be less than 300 million US dollars.
Behind the frequent investments and acquisitions, what is Binance's plan?
Zhao Changpeng explained: “One is to enrich products and businesses for the development of Binance. The business that Binance lacks, the outside world already has complete products, a mature team, and a relatively large number of users. Why not acquire them? ?Second, the "cost" of acquisition is lower. If we recruit people to do new business, the growth rate of the company will be very slow, and we may not be able to find suitable people. The third is to support the development of the industry. As the head of the industry in the early stage Exchanges, Binance are relatively profitable and have the ability to support some developments in the industry.”
(2) Technology research and development
As the first batch of enterprises focusing on blockchain technology, Binance has already taken the lead in the development of public chains.
As early as April last year, Binance Chain announced the official launch of the mainnet, and the DEX based on Binance Chain was also officially launched at the same time. In May of this year, Binance Chain released Binance Smart Chain again, which supports EVM, is compatible with Ethereum, supports cross-chain interoperability, and is fully connected with Binance DEX. Currently, Binance Smart Chain is still in the testnet stage, and plans to launch the mainnet in Q3.
In the eyes of most people, the public chain has no clear business model, and the exchange is just "losing money and making money". But for a mature company like Binance, owning a public chain is not an image project.
On the one hand, the free public chain supports the development of Dex, and the exchange can carry out strategic layout in the field of decentralized finance in advance; Carry out industrial landing and transform it into actual benefits.
Binance Chain is to Binance what Alibaba Cloud Computing is to Ali. Although it was difficult to realize directly in the past few years and was in a state of investment, it is indispensable in the long run. Now that Alibaba Cloud earns tens of billions of dollars every year, how much profit will Binance Chain bring to Binance in the future?
(3) New business extension: mining pool, open platform
This year, Binance has continued to make efforts in horizontal business.
On February 17, Binance launched the "Open Platform" plan, the highlight of which is "Binance Cloud".
Binance Cloud is a one-stop cloud solution for a specific field. By providing partners and customers with Binance's cutting-edge technology, security, and high depth and liquidity of the site, it enables its partners to launch independent digital asset trading platform.
Simply put, Binance Cloud provides technical support to help users quickly open their own exchanges, and provides services such as OTC fiat currency transactions, spot transactions, and futures transactions. All the user has to do is to prepare audit materials, operation and maintenance, and funds, and wait for the audit to be approved before launching their own exchange.
Binance executives also have confidence in Binance Cloud. Zhao Changpeng said that "in the next five years, Binance Cloud will replace Binance Exchange and become the largest source of revenue."
Currently, Binance Cloud has successfully launched Binance KR (Binance Korea), officially entering the Korean market.
Just when Binance Cloud was in full swing for promotion, Binance hit another big punch—launching Binance Mining Pool and entering the mining industry.
On April 24, Changpeng Zhao posted a post showing that Binance Mining Pool is conducting internal testing and digging out the first Bitcoin block. Three days later, Binance Mining Pool officially announced its launch. This also means that the three major exchanges have all entered the field of mining pools.
Currently, various new businesses of Binance are being developed in an orderly manner.
In any case, from zero to one, for Binance, it is an increment to fill the business gap. As for how to go from one to ten, Binance has its own set of rules. Previously, Binance has proved its strength and high efficiency in expanding new businesses.
(4) Charity
A company that only pays attention to profits, gets into the eyes of money, and ignores social responsibility will inevitably fail in the long run.
Binance is well versed in this and has always spared no effort in philanthropy.
In the past two years, Binance Charity has empowered the charity and medical industries through blockchain technology, solved global poverty and inequality, and promoted global economic development.
In 2018, Binance established the non-profit organization Binance Charity. Binance Charity uses blockchain technology to enlarge the entrance of public welfare funds, allowing more capital to participate in public welfare donations and sustainable development of the world; secondly, using the unique irreversibility and traceability of blockchain to help the public welfare and charity industry Innovative reforms provide a more reliable, effective and transparent management approach.
In addition, Binance Charity has launched 20 international development charity projects, with a total of more than 100,000 ultimate beneficiaries, and based on blockchain technology, it has realized the on-chain tracking of nearly 10 million US dollars of charity donations.
This year, the novel coronavirus (2019-nCoV) has had a profound impact on human beings, and Binance has also donated generously in the first place.
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Binance promotes the landing of China's blockchain industry
While helping the global economic development, Binance also focuses on the upgrading and development of China's blockchain industry.
Especially after the strong support for the development of blockchain technology at the national level, Binance has further accelerated its progress, and has successively launched cooperation with universities, scientific research institutions, and enterprises to promote the combination of "industry-university-research" blockchain technology.
In October 2019, the central government decided to "use the blockchain as an important breakthrough for independent innovation of core technologies." In April of this year, the National Development and Reform Commission clearly included "blockchain" in the information infrastructure of the new infrastructure (referred to as "new infrastructure"), which made many traditional companies even more excited.
However, looking at the current blockchain development pattern, large Internet companies control the overall situation and hold a large number of blockchain patents.
However, the largest number of small and medium-sized enterprises in China lack capital, technology, talents and resources, and are destined to miss out on new digital infrastructure.
In order to promote China's blockchain core technology research, industry application development, and industrial ecology creation, and focus on China's blockchain talent training and knowledge promotion. This year, Binance Blockchain Technology Research Institute, together with Lingang Xinyefang and Lingang Innovation Management Institute, established the "Lingang Blockchain Technology Industry Research Institute".
"We will rely on the influence of Binance's blockchain technology in the industry, devote ourselves to building core technology industries, cultivate high-tech research talents in the blockchain industry, and jointly empower the district with Lingang Xinyefang and Lingang Innovation Management College. Blockchain industry research.” said Helen Hai, Goodwill Ambassador of the United Nations Industrial Development Organization and Director of Binance China Blockchain Research Institute.
In addition, Binance Research Institute also launched the "Spark Project" this year, which is committed to supporting more than 1,000 blockchain industry partners in the next two years, and empowering the core needs of new infrastructure digital transformation enterprises. In addition to providing expert support and technical consultation, Binance Research Institute will also provide funding and technical support.
The "Spark Project" is aimed at a wide range of audiences, including: physical industry partners with new technology cooperation needs; industrial technology companies (ABCD); partners of local governments, development zones and entrepreneurial parks; new infrastructure industry partners: investment institutions , universities, experts and scholars, research institutions, think tanks and other partners.
Recently, Binance China Research Institute has reached a cooperation with Xinyuan Group to empower the upgrading and development of the real estate industry through blockchain. Xinyuan Real Estate is a traditional enterprise with a global layout on the blockchain track. Its domestic investment company has developed an alliance chain with independent intellectual property rights, which has been applied to the real estate industry.
According to the announcement, the two parties will jointly carry out academic research in the fields of blockchain, big data, financial innovation, artificial intelligence, etc., jointly build a new type of think tank backed by high-level scientific research institutions and top investment institutions, and open up an industry-university-research-government-finance collaboration area. Blockchain industry innovation and development platform, building blockchain academic research, technology transfer and achievement transformation, and blockchain industry training and education base; incubating blockchain-related scientific and technological innovation projects, and actively introducing domestic and foreign enterprises and enterprises in the upstream and downstream of the industrial chain project to create a block chain industry highland.
In addition to focusing on technology research and development, the Binance R&D team is also actively applying blockchain technology to real life to combat financial crimes.
On June 19 last year, Binance launched the anti-fraud system, which realized the asset flow tracking and monitoring function on the chain. For risky assets suspected of fraud, money laundering, dark web, extortion or theft, it realized active tracking and automatic targeting of assets flowing into the platform. , and communicate with relevant regulatory authorities.
At present, Binance has carried out exchanges and cooperation with the police in Hunan, Shandong, Liaoning, Henan, etc., and provided important data for the judiciary in terms of blockchain anti-fraud, data analysis of fund theft cases, evidence collection, and fund tracking. Provide technical support for the police to track and combat financial crimes and other illegal activities.
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The future can be expected, ride the wind and waves
Despite the great achievements of Binance today, the problems it faces in its development cannot be ignored. In fact, the growth of Binance has not been smooth sailing.
In May 2019, Binance was hacked and more than 7,000 bitcoins were stolen. What is "interesting" is that this news came from Changpeng Zhao's Twitter. Binance is the first exchange in existence to actively disclose the theft.
Changpeng Zhao explained that "self-exposure" is because Binance is relatively transparent and respects users' right to know.
Judging from the follow-up processing, Binance established a SAFU fund to bear the loss of theft, and the rights and interests of users have not been damaged.
Moreover, after this battle, Binance has also raised the level of security protection, "As the CEO of Binance, I control the cold wallet, but in fact my authority is less than one-fifth."
Today's Binance has received a high rating in the global encryption market. "The world's largest exchange" and "the world's leading blockchain company", titles have been added to this young company.
With honor comes responsibility. In the future, can Binance shoulder the burden of blockchain industry development?
Although the road ahead is difficult, for Binance, which has experienced strong winds and waves, it will continue to ride the wind and waves and sail into the distance.
