Binance is an international multi-language cryptocurrency exchange. Since its inception in July 2017, it is already considered to be one of the world’s largest cryptocurrency exchanges. The current CEO of Binance is Changpeng Zhao, better known as CZ.
The company was originally founded in Hong Kong, but was forced to move its offices to Japan after the Chinese government banned cryptocurrency trading in September 2017.
According to Changpeng Zhao, the profit of Binance in the first three months since its inception amounted to $7,500,000. In the 2nd quarter, its profit increased to $200,000,000, and the 3rd quarter is still in progress with expected further growth.
Binance has listed more than 300 coins and its certified matching engine is capable of processing 1,400,000 orders per/second making Binance one of the fastest exchanges on the market today.
The service raised $15 million dollars in July 2017 for the Initial Coin Offering (ICO) of its ERC20 BNB token. Users on the Binance Exchange can receive a 50% discount on trading fees by paying with the BNB token.
As of January 2018, it was the largest crypto-exchange with a BNB market capitalization of $1.3 billion.
How Binance works
There are two options for trading platforms on Binance: Basic and Advanced. The main difference between the two versions is that the advanced one offers more-in-depth technical analysis of digital currency value over time. The basic dashboard has several charts and graphs including the order books, a candlestick chart, and its trade history.
To use the exchange, users will first have to create an account. The account does not need to be verified for level 1, which is a 2BTC daily withdrawal limit. For level 2, which allows up to 100 BTC per day, users need to upload an photo ID and wait for approval.
To begin trading, users first need to fund their account. To do so users should click on the “Deposits Withdrawals” link under the “Funds” tab and on the “Deposits and Withdrawals” page to choose the cryptocurrency they’d like to fund the account with and click “Deposit.” Once the account has some funds, one can start investing.
Binance also supports numerous tokens as part of ICO listings. The exchange is very quick to add new coins and tokens after their ICO, which usually means they can be purchased cheaply and generate a greater profit.
The platform has a team dedicated to reviewing applications for new tokens to list on Binance and provides guidelines for those who willing to list a new token.
In case of future hard forks of Bitcoin (Bitcoin), Binance will take a snapshot at the time of the fork. After the forked blockchain and wallet are available and stable, Binance will credit the forked coins to users, giving them seven days to withdraw the coins.
The forked coin will go through the same strict listing review process as any other coin and the forked coin will not be listed by default.
Binance Coin (BNB)
The service raised $15 million dollars in July 2017 for an Initial Coin Offering (ICO) of its Binance Coin (BNB) token. As Binance reports, BNB runs natively on the Ethereum blockchain and follows the ERC20 token standard.
The token was established with a total supply of $200 million. As per the platform’s white paper, Binance plans to use 20% of its profits each quarter to buyback and burn BNB, until 50% of the total BNB supply (100 million) is burned.
The BNB token itself has multiple forms of utility, essentially being the underlying gas that powers the Binance Ecosystem. BNB can be used to pay for trading fees on the exchange, obtaining the equivalent of a 50% discount on trades (during the first year).
BNB can be used to pay for any fees on the platform, including but not limited to: Exchange fees, listing fees, and any other fee.
Payments and cryptocurrency platform Monaco has included support for Binance’s BNB token to its platform which includes the Monaco Visa Card and mobile app.
Starting July 1, 2018 Binance’s own BNB coin will be accepted on the Nexo platform as collateral for instant crypto-backed loans.
Binance currently charges a flat 0.1% fee on each trade. When BNB is used to pay for fees a significant discount will be provided: 1st year - 50%, 2nd year - 25%, 3rd year - 12.5%, 4th year - 6.75%, 5th year - no discount.
When the “use BNB for fees” is turned on, the fees will have a discount. If the function is turned off, Binance will charge 100% BNB deductible fees.
Withdrawal fees tend to vary for each digital currency. For instance 0.0005 is charged for Bitcoin withdrawals, and 0.005 is charged for Ethereum withdrawals.
CZ about Binance
Changpeng Zhao lately wrote in a LinkedIn post that Binance is “aggressively recruiting, and is projected to recruit over 2000 employees this year alone, and even more next year”.
“Binance is a leading brand in the crypto industry. Wherever it lands, it will attract other crypto businesses to follow. Any country that can attract Binance to open a branch in their location will receive handsome tax revenue. We are happy to work with forward thinking regulatory bodies, share our experiences and expertise, and help forge a leader in tomorrow’s blockchain-enabled world,” he noted.
War of Titans: Binance vs Sequoia
Sequoia Capital, a giant venture capital firm, was suing the founder of Binance over a failed financing deal between the two companies.
As CCN reported, Sequoia’s Chinese wing had last year made an offer to purchase an 11% stake in Binance in a deal that would have valued the firm at $80 million. Those discussions broke down in late 2017 amid a cryptocurrency market boom that saw the exchange become the world’s largest cryptocurrency trading platform. Binance later received an offer from IDG Capital which would have ultimately valued the exchange at $1 billion.
Sequoia filed a suit against Zhao in March, alleging that he violated an exclusivity agreement when he entertained IDG’s offer. Zhao denies the allegations.
Last month, Binance announced that the High Court of Hong Kong had dismissed an injunction that the exchange says Sequoia “improperly obtained” last December, adding that the VC firm had been ordered to pay Zhao’s court costs.
“Small boat turns faster”
Binance is planning to open an office in Malta, Zhao Changpeng has said in an interview to Bloomberg.
The company will soon start a “fiat-to-crypto exchange” on the European island nation, and is close to securing a deal with local banks that can provide access to deposits and withdrawals, he said, without providing a timeframe.
“We are very confident we can announce a banking partnership there soon. Malta is very progressive when it comes to crypto and fintech,” Zhao said.
Malta offers Binance a haven where it can develop its business with less regulatory uncertainties. The company had an office in Japan and was trying to get a license to operate there, but decided to remove its staff to avoid a clash with local regulators. Japan’s Financial Services Agency issued a warning to the exchange for operating without approval.
Binance also plans to set up its new global compliance base in Bermuda over the next few months, creating at least 40 jobs in Bermuda with at least 30 jobs for Bermudians, Premier David Burt has announced.
“Small boat turn faster. Not all small countries, though. Small countries with great leaders, to be precise,” CZ notes.