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Binance Universe (Part 2): The scandalous hack & The journey to build trust

With his familiar black hoodies, like a combination between Mark Zuckerberg and Steve Jobs - how has Changpeng Zhao (CZ) built his Binance universe? Explore this five-year journey of CZ with the three-part series by Coin98 Insights. Welcome to the second part.

writer.c98

Published May 26 2022

Updated Jun 28 2023

15 min read

To review Binance's growth journey in 2017 - 2018, read Binance Universe (Part 1): Dream Came True

2019 | Speeding up

Highlighted figures

Maintained the No.1 position in global cryptocurrency exchange:

Average daily trading volume > 2.8 billion USD.
> 15 million global users.
Covered > 180 countries and territories.
Listed 184 tokens.
591 trading pairs.
Supported 16 languages.
Recovered > 200 different lost tokens (> 8.8 million USDT in value) for users.

Increased use cases for BNB:

Burned > 5.3 million BNB (about 207 million USD in value).
1,000,000+ users holding BNB (40% increase compared to 2018).
180+ use cases for BNB (up from 42 in 2018).

Launched multiple new financial services:

24-hour trading volume on Binance Futures reached ATH at about 2.7 Billion USDT.
Total trading volume on Binance Futures reached about 99 billion USDT.
Margin trading with 29 coins.
56 margin trading pairs.
65 lending products on Binance Lending.
Supported 16 tokens on Binance Lending.
Supported 15 tokens on Binance Staking.

Provided more ways to convert fiat to crypto:

Launched 5 fiat-crypto platforms: Binance.US, Binance Jersey, Binance Singapore, Binance Uganda, and Binance Lite Australia.
The 24-hour trading volume of Binance.US soared after 2 months, reaching 14 million USD.
Fiat Binance accepted 300+ payment methods.
Fiat Binance supported 170+ countries and regions.

Promoted monetary freedom with a new decentralized ecosystem:

Systematically upgraded for Binance Chain (Galileo, Hubble, Archimedes, Heisenberg).
121 trading pairs listed on Binance DEX.
Issued 165 BEP2 tokens through Binance Chain.
> 47 million transactions on Binance DEX.
> 330,000 registered addresses.
24-hour trading volume reached ATH at 520 million USD.

Launched a new platform to support blockchain startups:

11 token sales on Binance Launchpad.
Raised 56 million USD.
> 1.7 million tickets IDO sales.
> 311,000 winning tickets.

Developed the blockchain community and enhanced charity activities:

2,607 global developers joined Binance X - the platform supporting developers.
Binance X supported 50+ projects.
Binance Labs supported 21 blockchain projects.
14 blockchain startups on Binance Labs’ portfolio.
Binance Charity raised > 3 million USD.
100,000+ beneficiaries.

Educational development and blockchain analysis:

854 articles on Binance Academy.
240 explanation words and terms.
Supported 17 languages.
57 educational videos on YouTube.
66 reports published by Binance Research in 2019.
38 in-depth analysis articles on cryptocurrencies.
28 industry research papers and secondary market reports.
> 1,300 news and articles published on Binance Info.
32 podcasts and mini pods on Binance Podcast.

Discovered new blockchain applications and supported important projects:

5 acquisitions and investments: Jex, Dapp Review, WazirX, Mars Finance, and FTX.
1,000,000+ Trust Wallet downloads (up from 500,000 in 2018).
30+ blockchains integrated by Trust Wallet (up from 1 in 2018).
100,000+ different assets.
ERC20, BEP2, TRC10, and ERC721 tokens were supported on Trust Wallet.
Staking support for ERC20, BEP2, TRC10, Tezos, TRON, and Cosmos tokens.
1,000,000+ flight and hotel bookings on TravelbyBit, Binance's first partner.

Memorable moments with the global community:

159 Binance meetups in 90 cities worldwide, attracted 18,000+ participants.
Keynote speakers at 66 global blockchain conferences.
184 Binance Angels, the worldwide community of volunteers (up from 96 last year).

Highlighted events

January 2019

Binance Launchpad partnered with BitTorrent and Fetch.AI.
Launched Binance Jersey.
Hosted Binance Blockchain Week in Singapore.
Trust Wallet supported multi-blockchain and upgraded to version 2.0.
Allowed credit and debit card payments through Simplex.

February 2019

BNB entered the top 10 in terms of market capitalization.
Launched Binance Chain testnet.
Binance Charity launched the Lunch for Children Program.

March 2019

Binance Labs Fellowships announced its founding members aiming to support developers and researchers in the crypto.
Launched Binance Lite Australia.
Binance Launchpad changed from a first come first serve model to a lottery.

April 2019

The Binance Chain was launched. BNB became the private property of Binance.

May 2019

Binance Podcast was launched.
Fixed the security issues of the platform and proved the role of the SAFU fund.
Binance Charity signed an MOU with Uganda NGO Safe Future to aid 100,000 children.

June 2019

Trust Wallet integrated Binance DEX trading, allowing users to directly access Binance DEX from the wallet app.
13 startups graduated from Incubation Program season 2.
Website upgrade to Binance 2.0.
Issued BTCB, a BEP-2 token pegged to BTC, allowing Binance DEX to support BTC trading pairs.

July 2019

Binance Singapore was launched.
Margin Trading was launched.
BNB's market capitalization ranked 6th in the market.
Binance celebrated its 2nd anniversary.
Binance Staking was launched.
Trust Wallet supported Binance DEX (BEP2 token) and Kyber Network (ERC20 token).
Launched Binance Trading.

August 2019

About 3 million users with a total access time of nearly 4 million minutes (approximately 7.48 years) on Binance Academy.
Binance app launched on the app store.
Binance launched the Venus project.
Binance.com supported OCO orders.
Binance Lending was launched.
Binance Referral Program 2.0 was launched.
Binance X was launched.

September 2019

Acquired JEX and deployed 2 Futures testnets.
Issued BUSD (partnering with Paxos).
Binance Futures was launched.
Invested in Mars Finance.
Binance.US was launched.
The Broker Partner program was launched.
Binance Koinal opened fiat gateways in >170 countries.
Binance Staking was launched, supporting staking 15 free tokens.
Trust Wallet supported staking.
Introduced the Market Maker Program.

October 2019

Binance OTC was launched in China.
Binance and Amun launched BNB ETP on the SIX Swiss Exchange.
Binance Futures increased maximum leverage to 125x.
Binance Lending launched a flexible deposit feature.
Binance listed Nigerian Naira.
24 hours trading volume on Binance Futures hit ATH with 165,000 BTC.
Binance Android App supported Futures Trading.

November 2019

Binance partnered with Advcash, supporting 4 new fiat currencies: euro, Russian ruble, Ukrainian hryvnia, and Kazakhstani tenge.
Binance and HTC introduced the smartphone EXODUS 1 - Binance Edition.
Opened fiat-crypto gateway in Turkey.
Binance Margin increased leverage to 5x.
Binance acquired India's leading digital asset trading platform WazirX.
Collaborated with TravelbyBit to issue travel rewards cards in crypto.
Binance Futures launched the ETHUSDT contract with the maximum leverage to 50x.

December 2019

Acquired DappReview.
Opened fiat gateway in Latin America.
Partnered with peer-to-peer trading network Paxful, allowing users to buy BTC directly on Binance.com with 167 fiat coins.
Invested in FTX, through which FTX helped create liquidity and products for institutional investors in the Binance ecosystem.

Looking back on the journey

If 2018 was a year of kick-starting for Binance, 2019 was a year of speeding up with countless activities.

Factors that contributed to Binance success include:

a. Reaching out to the world

2019 marked the expansion of Binance. The Binance platform has appeared in many countries around the world. From owning a small headquarters in a small country, Binance is now operating in more than 40 countries.

Binance also collaborated with many traditional partners to bring cryptocurrency to a wider range of users, from retail customers to financial institutions.

b. The crypto market and tokens → BNB development

Crypto is attached to tokens. When the price of a token rises, it will have a positive impact on the project, and vice versa.

Realizing this fact, Binance actively developed features for the $BNB token, the exchange’s representative asset. With the addition of many new features to the token plus fast-growing platform factors, the BNB price increased tenfold in a year. Its market capitalization raised to the top six in the market, benefiting the Binance ecosystem.

c. Developing core projects

Binance focused on developing core products, all of which made a significant impact on the platform compared to 2018. It, in turn, helped Binance increasingly attract users, generate more revenue and improve its reputation.

d. Marketing

In 2019, Binance launched numerous referral programs and events to attract more new users. Looking at the growing number of users, we can see that this was a very good move by Binance to increase the platform's market share.

e. Developing new features to meet the needs of users

Web upgrade.
Launched Margin Trading.
Launched Binance Staking.
Launched Binance Lending.
Launched Binance X.
Launched Binance Futures.
Raised leverage.
Launched the mobile app.

Binance launched a series of new products and services to meet the needs of users, who could do nearly everything in the Binance ecosystem.

f. Building users’ trust

The Binance attack that happened in Tokyo was nothing compared to the attack on May 7, 2019. The hackers used a variety of phishing techniques to gain control of several user accounts, and withdrew 7,000 bitcoins from Binance's "hot wallet".

After figuring out this incident, Binance technical team immediately halted the withdrawal and prevented hackers from continuing to attack the system. At 2 A.M the next day, they called CZ. He was shocked and swore a little, but calmed down after a few seconds.

After the attack was prevented, CZ announced that Binance would be shut down for a week. People could still trade on the exchange, but could not deposit or withdraw money. For the first four days, a team of 40 people worked day and night to repair and upgrade the exchange’s security.

The focus on detecting and fixing security problems in a short time, along with the establishment of the SAFU (Secure Asset Fund for Users) contributed to increasing users’ trust and encouraged them to continue to deposit funds on Binance. As a result, it created a positive feedback loop, increasing Binance's credibility and the amount of assets deposited.

2019 was a brilliant year for Binance. Seizing the opportunities and implementing the right development strategies enabled the exchange to surpass competitors and maintain itself as the world's leading cryptocurrency exchange.

2020 | Maintaining the leading position

Highlighted figures

15 billion USD in 24-hour ATH spot trading.
Listed 184 tokens.
37 billion USDT in 24-hour ATH futures trading.
2.6 billion USDT in ATH open interest.
31.9+ billion USD in total order volume in Binance Fiat.
6 billion USD in total order volume in Binance P2P.
Binance Pool ranked 3rd in global mining, just nine months after launching.
60 projects using Binance Smart Chain.
600,000 Binance Smart Chain wallet addresses.
>13,000,0,00 BNB burned in 2020 (up from 5,324,482 BNB in 2019).
BUSD market capitalization reached 805 million USD (up from 31 million USD in 2019).
22 liquidity pools for 8 Binance Launchpool projects.
5 million Trust Wallet total users.
4.7 million Binance Academy total users.
Binance Charity donated 1.5 million PPEs to 400 hospitals in 26 countries to fight COVID.
953,000,000 page views and 50,000,000 users on CoinMarketCap (acquired in April).
760% increase in monthly volume for WazirX (acquired in November 2019).

Highlighted events

January 2020

Binance Charity donated 1 million USD in BNB tokens to the Australia Bushfire Donations project.
Binance Launchpad introduced the first project WazirX (WRX), which was India's most trusted Bitcoin exchange with the first auto-matching P2P engine in the world.
Launched the P2P Merchant Program which helped global P2P merchants earn revenue by providing fiat currency payment solutions and transact with zero fee.

February 2020

Introduced the Binance Cloud, an infrastructure solution for customers and partners to launch digital asset exchanges leveraging Binance’s industry-leading technology, security, and liquidity.
Binance P2P launched on the web and released a mobile app. Users can buy and sell cryptocurrencies with zero transaction fees directly from other users.

March 2020

Trust Wallet introduced the Trust Wallet Token.
BUSD hit the 100 million USD market capitalization milestone after six months of launching.
Binance WazirX launched a 50 million USD fund to support a blockchain fund in India.
Binance Charity launched a crypto fund against COVID, aiming to raise 5 million USD in cryptocurrencies for buying medical supplies.
Binance Academy established a blockchain research institute in China.

April 2020

Introduced the Binance Card, accepted by > 46 million merchants in 200 regions and territories.
Binance OTC Trading Portal went live.
Binance acquired CoinMarketCap, the most visited crypto website in the world.
Binance Futures climbed to No. 1 in crypto futures exchange rankings.
Launched Binance Options with Bitcoin call and put options.
Revealed next steps for Binance Smart Chain.
Launched Bitcoin mining pool, supporting both PoW and PoS mining.

May 2020

Binance Widget was released on the Brave desktop browser.
Launched a new feature about advertisement posting on Binance P2P.
Binance Charity launched PPE Token and donated 200,000 masks in New York.
Launched Leveraged Tokens (BLVT).
Invested in the Indonesian crypto exchange Tokocrypto.
Travala.com merged with Binance-backed TravelByBit.

June 2020

Opened direct bank transfers in Europe and UK.
Binance Pool offered a Smart Pool service, guaranteeing that the minimum BTC mining income was not lower than one from the FPPS payment method.
Binance supported crypto purchases with Visa credit and debit cards in 180+ countries.
Launched Binance Access, a new B2B solution that makes it possible for merchants, vendors, and wallets to have native fiat-to-crypto exchange features on their platforms.

July 2020

Supported PoS staking, operated by Binance Pool.
Acquired Swipe, a leading multi-asset digital wallet and Visa debit card platform.
BUSD reached a 1 billion USD milestone.
Held The Charts Virtual Conference, with 80+ speakers, 30+ discussion panels, and five major keynotes.
Launched Binance Australia.

August 2020

Binance Labs lead a 2.8 million funding round for 1inch.
Binance helped take down a group of money-laundering criminals with 42 million USD.
Binance Staking launched DeFi Staking, allowing users to participate in certain DeFi products through a single click.
Launched Binance Dual Savings.
Binance P2P added 58 new payment methods.
CryptoSafe Alliance was launched, aiming to fight crypto fraud and bad actors in the crypto and blockchain space.

September 2020

Launched Binance Smart Chain running in parallel to Binance Chain.
Joined European blockchain community.
Launched Liquid Swap, a new trading platform that hosts different pools of liquidity, and allows users to exchange crypto assets and earns from their shared funds.
Binance TR went live, signaling Binance’s formal entry into the Turkish market.
Created a 100 million USD accelerator fund for DeFi projects aiming to build their solutions on Binance Smart Chain.
Launched the Binance Innovation Zone, allowing users to trade newer token.

October 2020

Built Binance Bridge, allowing users to bridge their cross-chain assets from centralized or decentralized wallets to both BSC and Ethereum B-Tokens.
Launched Binance Earn, a one-stop earning experience.
The BSC Accelerator Fund supported 10 million USD in liquidity to support the launch of projects based on the BSC ecosystem.
Committed 5 million USD to the Binance Smart Chain BUIDL Reward Program to reward developers who built usable dApps on Binance Smart Chain.

November 2020

Helped recover > 344,000 USD lost from the WineSwap exit scam.
Partnered with Gitcoin to support a more active blockchain developer ecosystem.
Donated 100,000 USD to round 8 of Gitcoin’s Grant Matching program.
BSC Accelerator Fund supported the first six projects for 100 million USD.
Binance P2P introduced a new ad-sharing function to help users get more trades.
Binance Charity donated 10,000 USD and worked with UNICEF to help rehabilitate Beirut after a recent tragic event.
Binance Broker Program onboarded 400 brokers from > 30 countries, helping them earn > 2 million USD per month.

December 2020

Launched an ETH 2.0 Staking service.
Launched Combined Convert and OTC Trading Portal.
Binance Pool rose to the Top 3 mining pools in the world after less than eight months of launching.
Partnered with Chiliz, a currency option for blockchain-backed products and services geared toward mainstream consumers.
Binance Labs lead a 12 million USD investment round for MATH.
Celebrated the new Bitcoin ATH on the Binance exchange.

Looking back on the journey

1. The reborn phoenix

2020 marked the beginning of the COVID pandemic, a "Black Swan" crashing the whole market. However, from the ashes, crypto was once again reborn and thrived. So did Binance.

a. Hard work pays off

During the downtrend period of the market in 2018-2019, Binance mainly focused on building new products and services. Now, when the market recovered, it’s showtime for Binance:

Binance Spot, Futures, and Margin: Trading volume, Open interest reached ATH.
Binance Launchpad: Supported launching various quality projects.
Binance Fiat supported other 40 fiat currencies.
Binance P2P saw a 760% increase in users.
Financial services such as Binance Earn, Binance Pool, and Binance OTC Portal attracted more investors.

If the 2017-2019 period was a race between Binance, Okex, and Huobi, by 2020, Binance had proven its superior.

The daily trading volume on Binance in the last days of 2020 was even close to the total one on the other nine major exchanges combined.

Though rising to the top, the platform still maintained a high growth rate and continued to take market share from other parties. Not only had total trading volume increased by more than 51% compared to the same period last year, but Binance's market share also rose from 29% at the beginning of 2020, to 45% at the end of the same year (according to CoinGecko).

Regarding the Futures market, Binance also had a strong growth rate.

Before 2020, Deribit and Bitmex dominated the market, but by this time, Binance, along with Okex, had risen to the second-highest position in the market. In April 2021, Binance's market share ranked first.

In conclusion, 2020 saw the rise and dominance of Binance in the exchange industry.

b. New strategic steps

The merging between Binance Lending and Binance Earn provided an appealing money-making opportunity for users. In addition to Lending, Binance Earn was integrated with other useful services such as Binance Staking, Binance Farming, and Dual Investments, which made it easier for users to make money than trading.

Binance continued to develop several major products in 2020, which had a lasting impact on its future success:

Binance Options: This is one of the essential derivatives legos in the financial market. Besides Margin and Futures, Binance provided a set of easy-to-use and user-friendly financial products to meet different users’ needs.
Binance Cards: This consumer card was used for payments for over 140 brands, aiming to help Binance enter the global electronic payments market, a huge piece with rapid growth.
Binance Innovation Zone: Binance had various ways of listing tokens. In 2020, the platform launched the Innovation Zone, which supported listing DeFi tokens on the market. This was a good move at the time DeFi was booming, which helped Binance users access trusted DeFi coins while still keeping one foot at CeFi.
Binance Launch Pool: BNB and BUSD holders can participate in the Binance Launch pool and receive tokens for free. 8 projects with a total of 22 pools on this had attracted more than 900 million USD in TVL.

With 6 products in 2018, 7 products in 2019, and 10 products in 2020, it seems that Binance will never stop. Many of the platform’s products even served as role models for other exchanges.

2. The DeFi Gateway

Besides the four crucial products mentioned, Binance also launched Binance Smart Chain (BSC), the standout product that is very likely to be the game-changer of the platform.

BSC is a blockchain built on the EVM virtual machine mechanism, using BNB as a native token. It serves as the bridge from CeFi to DeFi, as DeFi will be the future of crypto. At the time DeFi was a hot trend and gas fees on Ethereum were unbelievably expensive, BSC quickly attracted plenty of users and developers.

BSC achieved lots of good results in 2020, to name a few:

60 projects using BSC.
600,000 wallet addresses on BSC.
3 million BNB staked by BSC validators.
40 wallets on Binance Chain and BSC.
344,000 USD was recovered for BSC users after the WineSwap exit scam.

The launch of BSC marked the beginning of the distinguished development journey by CZ and his team in the Binance Universe. Along with Binance Exchanges, BSC was a game-changing product that helped Binance expand its ecosystem.

In short, Binance gained huge success in 2020 with multiple CEX good services, and with the launch of BSC, the platform was opening the gateway to decentralization.

a. Legal hurdles

In 2020, Binance once again faced a legal hurdle, a never-ending issue in the crypto space. On October 28, 2020, Forbes leaked documents alleging that Binance and CZ plotted an elaborate scheme to deceive United States regulators and secretly profit from cryptocurrency investors located in the country.

Binance officially blocks access from IP addresses located in the United States, but "potential customers would be taught how to evade geographic restrictions", Forbes claimed.

Geography has always been a gray area in the development of Binance. In May 2020, CZ told a former Forbes employee that Binance's headquarters happened to be wherever he was. This wasn't an evasive response, but rather an optimistic vision about the ideal future of blockchain's decentralized power. “I think this is the beauty of blockchain,” CZ said. “Like where is the Bitcoin office? Bitcoin has no office".

But regulators didn’t take side with him in this “spiritual headquarters” concept, and this was only the first chapter of Binance’s long not-very-good term with legislation.

Review Binance's growth journey in 2017 - 2018, read Binance Universe (Part 1): Dream Came True

Sources: Decrypt, Forbes, Binance Year in Review

Authors: Bich Tram, Camila, Vi Dang, Duy Nguyen