Read CZ’s first letter to our users, teams, and community for 2020.
Looking back at 2019, it feels like building the foundation of a house. A tall building needs a deep foundation. When working on the foundation, many people don’t see the work that happens underground and can’t imagine how tall the building will be. To a few trained eyes though, they can estimate accurately how big the building will be just by looking at the foundation.
The Binance team and community have done much work on building our foundation in 2019. This should help us to grow the ecosystem in a solid fashion for years to come. I will go through some key items in this article. Before I do that...
There were also many challenges in 2019; during these tough times, we let our core values guide us. At Binance, our mission has always been to spread the freedom of money. Cryptocurrency is that freedom for millions of people today and billions more tomorrow. We are here to enable access to crypto. We hope soon, everyone will have access to crypto.
As important as the mission is, it’s our values that give us direction. Without them, we’d be going nowhere fast. Our values act as our internal compass, especially when making difficult decisions. So as we head into 2020 and beyond, we want to clarify exactly what our values are and how they guide the decisions we make.
We’re obsessed with our community and we hope you know it. With millions of users spread across six continents and 180 countries, we get a lot of product and feature requests. Margin Trading, Staking, Lending, Futures, and even the 125x leverage are all requests we heard, built, and shipped for our community.
At Binance, we always announce planned maintenance and provide 24/7 support, these are industry precedents we set from the beginning. We always communicate any potential damage or risk to our users and make sure your funds are SAFU while we fix the problem. The way we see it, you’ve trusted us and we have to continue to earn that trust -- and we will.
But we don’t just deliver what is being asked from us and what you need to know. There are very important actions that we do in the name of putting the user first, involving things that our users didn’t know they need.
In January, a Binance user got his SIM swapped. His email and 2FA both got hacked. His 46 BTC was at risk of being stolen. Thankfully, our AI system disabled his withdrawal request when it detected an anomaly. The user thanked us for blocking the hacker's withdrawal request even before he contacted us. Stories like these, where our users are protected and taken care of in ways they didn’t anticipate, motivate us to continue serving you.
This is a typical example of foundations being built that most do not see. Building an AI system is not easy and not a small project, but at Binance, we believe these investments will truly pay off in the long run.
Speaking of security, we had our share of challenges in 2019. We had to deal with a security breach that set us back $40 million, a sum slightly higher than what we voluntarily burned in BNB a few months later. Looking back though, I believe it is a blessing in disguise. While we were always heavy on security, this incident forced us to revamp many areas in our security architecture. While I won’t go into details of our security practices, we are now far more secure than before.
Through these tough times, we made sure to protect our users. Our users did not lose a penny. One thing that is for certain is, we invest the most in security, for any crypto business.
In January 2019, at the bottom of the bear market (according to bitcoin price) and in the midst of many accusations and doubts against ICOs, Binance launched our Launchpad platform, helping projects to raise money and awareness, and started an IEO trend.
It is our fundamental belief that fundraising on the blockchain is a killer app. This is the first time in human history that people are able to raise money globally, and people across the world can invest in projects they like, a tiny amount if they wish. This draws many scammers as well, but we shall not let a few bad actors destroy a tool that could help so many upcoming entrepreneurs.
There is a lot of confusion and misinformation about IEOs. Some of them are ill-intentioned and view IEOs as a way to work with projects to scam users. These will naturally die out quickly, but some users do get hurt. We advise users not to chase large gains in short time intervals. Many users wrongly view IEOs as a sure way to earn 5x in one day. This is absolutely not what IEOs are for. Projects need time to grow, they don’t grow 5x in one day. If you invest in IEOs, you should adopt a proper mindset.
Binance Launchpad has one key advantage: network effects. All projects apply to Binance first, giving Binance effectively the right of first refusal. This allows Binance to select the best projects before other exchanges. Admittedly, we don’t have the capacity to work with all the good projects in the world, and often miss good projects too. But as long as we do our job right, Binance should be able to outperform other exchanges in IEOs, and the results are in line with this expectation.
Binance Labs, Binance X, Hackathons, Conferences, and Innovation
Also, in January 2019, Binance organized a conference in Singapore, with a multi-day hackathon just before that. A few of the hackathon projects progressed on to Launchpad and subsequent listing on Binance DEX and Binance.com.
Even months before the hackathon, Binance Labs had been running multiple incubation seasons and investing in projects. This year, Binance Labs further spun out a team called Binance X, whose job is to give out grants to developers working on good concepts and prototypes. With Binance X, there are no allocations of equity, tokens, etc. Just a pure development grant to encourage innovation.
In 2019, Binance Labs incubated 21 projects and made investments into 14 projects, and Binance X gave grants to 59 hardcore developers in the crypto space.
In 2020 and beyond, Binance will continue to re-invest much of our earnings back into growing the space.
Binance Chain, Binance DEX, and BNB
In February 2019, the Binance Chain team (a loosely organized community) pushed Binance Chain into testnet. In April, Binance DEX started mainnet live trading. And with that, the BNB token migrated to the native Binance Chain coin. This is a significant achievement and a key milestone in moving Binance from a company to a community. There is a more detailed and impressive timeline for Binance Chain development here.
Again, there is quite a bit of confusion and debate around a number of topics. While our approach is to ignore debates and wrong information on the Internet and focus on building, I will take this opportunity to address some of the topics, hopefully once and for all.
First, here’s the correct information.
Binance DEX is one of the fastest on-chain trading engines available, meaning all trades happen on the blockchain. It can handle the current trading volume on Binance.com with ease, in a decentralized manner. You hold your own private keys, and no one can interfere or reverse your transactions. Binance Chain uses Tendermint, a BFT-based consensus, meaning one confirmation is final. Block times are less than 1 second, meaning your trades are final in less than a second.
Binance DEX also has a large number of clients interfaces and UIs. Anyone can build a UI to interface with Binance DEX, and many have. More than 30 third-party wallets fully support Binance DEX, in addition to binance.org.
The Naming Confusion
First, the word “Binance” has evolved to be much more than just binance.com (the global centralized exchange). The “Binance” brand has been lent to many uses, from independently operated fiat-to-crypto exchanges to Charity, DEX, and more. Just because something has the name Binance in it does not mean it is operated by the centralized entity binance.com.
There is much debate about the use of the word DEX as well. It’s clear that everyone has a different definition of “decentralized.” This way, everyone is right, and everyone else is wrong.
I exhibit and recommend a more balanced view of different degrees of decentralization.
There is the Bitcoin level of decentralization where we don’t know who the founder is, he/she/it does not speak or voice opinions. A number of volunteer core developers had influence over the direction of development in the early days, and later disagreements are settled using forks. More power to that.
There is the Ethereum level of decentralization, where we know who the founder is. Vitalik, being the genius that he is and still very technical and hands-on, is well-respected. Vitalik does voice his opinions, often strongly with strong influences. He can tell the foundation to sell their ETH reserves at ATH, without disclosing that to the public, or only do so 2 years later. There is a little bit of a pre-mine, not a big deal. But regardless, ETH is fairly decentralized. Anyone can run a node, even on a laptop if they wish, though it just takes a bit longer to sync. The code is open source and adoption is high.
Binance Chain/DEX is definitely less decentralized than Ethereum. I (CZ) am heavily associated with the Binance name just because I started Binance.com, but I actually don’t do that much these days. I am also always over-credited with the success of the Binance ecosystem, but it’s the teams that truly deserve the credit. The DEX team do respect my opinions, but my opinions are usually very high-level, like, “Yeah, I agree privacy is a good idea.” (Duh.) The code is not fully open-source, yet. (Waiting for other centralized exchanges to release their DEX first. Better for innovation this way.) And there is a limited number of validator nodes for performance reasons. But you do control your private key. In the worst case, the validators could collude and shut down the network, but there is a more than a decent chance that the community will bring it back up again. In any event, no one ever has your keys.
Then, there is Binance.com, the global centralized exchange. Yes, we hold custody of users’ funds. For most users today, this is the preferred way to access crypto. This is reflected in the numbers. And for many users who are not tech-savvy, this is a safer way to hold crypto than using their own devices. And we have an important job to do. Compared to traditional companies though, Binance.com is very decentralized in structure and the way it operates. We rarely even use the word company, instead, we just call ourselves a team. The Binance team is distributed in 40+ countries and adopts a nomadic lifestyle. Many of them migrate from city to city as the work requires and doesn’t have a permanent base.
Ultimately, we strongly believe in full decentralization. Why else would we build a DEX? We just think the way to get there may involve a few incremental steps, instead of one giant leap forward. We are not against people who try the “giant leap forward” approach, in fact, we try our best to help them. (e.g., We open-sourced an implementation of Threshold Signature Scheme, a hardcore technology piece, with the community.) After all, many significant advances are results of moonshots.
Margin & Lending
While DeFi (decentralized finance) has been pretty hot in 2019, we added the foundation layers to our CeFi (centralized finance) offerings too. Binance Margin Trading is less capital intensive, and thus cheaper in many ways. It also allows you to trade larger positions without holding all your crypto in the exchange. Margin trading does come with risks of liquidation, of course, so please use Margin with care.
Over 45% of our users use Margin in some capacity. With Margin usage rising, we are able to offer Binance Lending services. Now you can lend your idle coins and have them earn interest for you. As the lent coins never leave the platform and are risk-managed by the Margin system, this is actually a fairly low-risk way of earning a decent passive income using your crypto.
With interest rates dropping in the fiat world and our lending product covering stablecoins, we believe lending services will be an attractive option for fiat holders as well as crypto holders. This is likely a good way to bring more “fiat people” into crypto. We expect to continually expand our Lending offerings in 2020.
With Binance Staking, the money your money earns is all yours. At Binance, we work hard to protect our users' interests, and that includes making sure that users get what they deserve out of their deposits. In 2019, our team rolled out staking services for 15 projects, offering rewards in 17 coins. The list includes Cosmos (ATOM), Tezos (XTZ), Kava (KAVA), NEO Gas (GAS), Ontology ONG (ONG), Vechain’s VeThor (VTHO), Komodo (KMD), QTUM (QTUM), Stratis (STRAT), Fetch.ai (FET), Harmony (ONE), Algorand (ALGO), Elrond (ERD, paused), Stellar (XLM, discontinued), and Tron (TRX) for Tron, BitTorrent (BTT), and Wink (WIN) rewards. For a list of all current staking-supported projects, please visit our Staking page.
Different from third-party independent staking service providers, Binance Staking offers a few key advantages.
There are no fees. We give 100% of the staking rewards collected by our nodes to the user. We rely on trading fees to stay in business and will provide staking as a value-add service to users who deposit and keep their holdings on Binance.
We offer fewer restrictions and more flexibility on locking up your coins. Users can still use your coins to trade while they earn staking interest. Once you buy a coin, it starts accruing staking rewards in 24 hours. Another benefit is that limit sell orders still count as holdings accruing rewards until the order is fulfilled
You don’t have to move your coins around into multiple delegates, nodes, and wallets. And you still enjoy the highest level of security provided by a top tier exchange.
Earn additional promotional staking rewards offered exclusively on Binance.
If you still do not know about staking, you can learn more here.
To trade with even lower capital requirements, and avoid paying interest on margin, there is Binance Futures, the high leveraged futures product we rolled out in September 2019. Our futures team has built a solid product that is well received by our community and has seen tremendous growth. In less than three months, Binance Futures often has higher trading volumes than Binance Spot exchange.
While we borrowed some ideas from existing futures platforms, we intentionally set our fee structure to be different. Instead of using a heavy maker rebate, we provide the lowest fees for takers. While this may look less favorable to market makers at first glance, many of them who tried our platform found that it is actually easier to do business on our platform, as there are far more active takers. It does require some adjustments to your algos, but once adjusted, there is more trade happening on Binance Futures. If you are a market maker in the futures market, you should join our market maker program.
Futures also provides a tool for producers like miners to hedge their risks. I believe similar to traditional financial markets, the derivatives trading volumes will be far higher than spot markets, and our futures platform will remain an important pillar in our foundation.
While some in the crypto space view fiat as a dirty word, and some pristine, fully-decentralized, 100% blockchain projects refuse to touch it, we believe fiat will co-exist with crypto for a long time to come. Today more than 99.9% of the money supply is still in fiat, and we need to build bridges, gateways, teleport portals, or whatever you call it, to bring them into crypto. In our foundation analogy, these are the plumbing pipes. You shouldn’t really need to think about it much, but you expect it to work when you need it. Sadly, today, most fiat channels don’t work too well and are usually expensive. We are working on that.
On the bright side, 2019 has seen some significant positive changes in attitudes of many governments around the world towards blockchain and crypto adoption. From Bermuda accepting BUSD for tax payments to China going all-in on blockchain, we may have just crossed the threshold point of “adopt blockchain or be left behind” for the rest of the governments. As a result, we should see many more governments rushing to blockchain in 2020.
Given the changes in attitudes in governments, and realizing the fact that blockchain is not going away and only growing, we see many traditional financial institutions coming into crypto as well. Banks and payment services providers that were once cold are beginning to provide services to crypto businesses. Many smart ones are even jumping head in with their own product offerings in the crypto space. Again, as much as some of the hardcore crypto guys don’t like banks, we believe working with banks and traditional financial institutions is essential to bringing more people into crypto.
In 2019, we started several massive undertakings for fiat pipes, including fiat channels directly on Binance.com (banks, credit cards, mobile wallets, gift cards, etc), stablecoins, and independent local fiat-to-crypto exchanges using Binance technology. All of these efforts will continue well into 2020 and beyond.
Together with our local partner, we launched Binance.US in Sept 2019, adding direct USD support for the first time in the Binance ecosystem. With ACH support, depositing USD using a bank card to Binance.US is super easy. Also, Binance.US fees are about 2x to 5x cheaper than other US exchanges.
Our other partners are also working hard to improve their service offerings in their locations, including Binance.SG, Binance.JE, and Binance.UG. We shall see more partners running more Binance tech-driven exchanges in a few key strategic locations in 2020.
Binance.com has added support for 19 fiat currencies - USD, GBP, SEK, CAD, EUR, CNY, RUB, TRY, NGN, UAH, KZT, VND, COH, PLN, INR, BRL, ARS, MXN & IDR (with 3 more to be added next week) directly over the last couple of months. This is a significant shift away from being only a crypto-to-crypto exchange. Binance.com is now also a fiat-to-crypto exchange. In 2020, we aim to continue to add support for all 180 fiat currencies.
Binance also worked with partners to issue a number of stable coins in 2019, including BUSD and BGBP. BUSD is now listed on more than 30+ exchanges and supported in 40+ wallets and applications. We plan to continue to add more stable coins where possible in 2020.
P2P fiat trading is a new initiative that’s launched in the last quarter of the year and has seen steady growth. The service is only available in selected Asian countries for now, but will be expanded to other countries in 2020.
As the saying goes, when you can’t beat them, buy them. And this is definitely true for all of our acquisitions. When we identify top talent with a top product that we can’t beat, and the teams share common values, a merger makes sense in most cases.
Binance made no less than 9 full acquisitions in 2019, with only a small number of them being publicly announced so far. There are always a number of deals being discussed at any given time, and there are 2 that I am very excited about specifically. We will announce them in due time.
Trust Wallet continues its mission of making crypto more accessible and giving access to decentralized finance. Wallet to blockchain is just the same as browser to the Internet. Your wallet is your window to crypto, and adoption starts here. Over a million downloads have been achieved over the course of the year. Paying close attention to the needs of the users, we were able to add support for over 30 different blockchains.
DeFi is at an early stage of development, and we are continuously working hard to make DeFi accessible for anyone and make it simple for regular users to understand. Trust Wallet has enabled DeFi for more users by giving them the ability to stake coins while being in control of their private keys and having a simple interface for one-click staking.
Trust Wallet also incorporated DEX functionality of Binance DEX and Kyber Network in order to allow decentralized trades within the app.
You can also buy cryptocurrency on Trust Wallet through our partners via credit cards or by using Apple Pay and Google Pay.
Open Source is the core of blockchain development, and the Trust Wallet team continues to build and contribute to an open-source community to accelerate the development of crypto. In 2019, we open-sourced two libraries -- Wallet Core and Blockatlas -- for developers to get started with building new products for the users.
Today, anyone can work from anywhere in the world and be paid in crypto without the need to have a local bank account. For many of us, this represents true freedom as it allows us to experience different cultures and work and live in a way we couldn’t before. As crypto nomads, travel is often a big expense, and TravelbyBit is building innovative services to enable users to live and travel entirely with crypto.
TravelbiBit is advancing Binance’s crypto adoption push around the world. They have helped mainstream businesses across Australia to accept payments in crypto, over Bitcoin’s lightning network and Binance Chain.
The team has also launched an online flight and hotel booking site built specifically for the crypto community with over 1 million hotels and flights which users can book with crypto. Also coming soon: a crypto debit card that allows crypto early-adopters to use crypto at a wider range of places.
Research and analysis in the cryptocurrency and digital asset industry will become increasingly critical for the growth of the space.
Binance Research has released 70 reports since its launch on November 18, 2018. We’ve written nearly 700 pages about cryptocurrencies, market trends, and the latest developments in the digital asset and blockchain space.
With an ever-expanding library of content, our new mobile-responsive website, plus an insightful Twitter account where we share infographics, we will continue to provide data-driven insights for all crypto-market participants.
We believe education is the best protection for users. To that end, Binance Academy continues to produce accessible, digestible content to advance crypto and blockchain literacy. This year, the team completely rebuilt the Binance Academy site to make it faster and more reliable. Now, Binance Academy is one of the top 3 products on ProductHunt, thanks to our users’ support.
Academy also expanded our content into two more languages, Indonesian and Japanese, and enabled Text-to-Speech on all of our articles so curious minds can choose to learn by listening. In addition, they launched iOS and Android apps.
Here are some of the best things you might see on Binance Academy right now: Bitcoin Halving countdown, phishing quiz for safety education, glossary quiz to test your wit on crypto-jargon, and a Bitcoin history quiz. You can also vote for the next features you want to see on Binance Academy.
We also thank our community for contributing 46 community content submissions and supporting our two bounty programs for glossary terms.
Binance Charity has wrapped up its first year’s work with more than 100,000 people helped. In the past year, Binance Charity Foundation has delivered lunch to over 5,000 students in 11 schools, stationery and solar panels to 51 schools, and sanitary pads to over 10,000 young girls at 55 schools. Charity also launched the first stablecoin for alleviating period poverty, the Pink Care Token. One year’s charity work created tens of thousands of donation-related transactions recorded on the blockchain, all open to the public for verification.
The foundation also formed numerous collaborations such as the Pink Care Token Alliance,with 46 projects and companies joined us immediately, as well as Mercy Corps and Women’s World Banking. Charity is the first blockchain company to become a member of the United Nations Global Compact.
Having 100,000 direct end beneficiaries is still far from Binance Charity’s ultimate goal of “using Blockchain technology to help the bottom billion people,” but this is absolutely a great start for the industry. On behalf of the Charity team, I’d like to thank all projects and individuals who have supported us in various ways. If you have never done a crypto donation, you should try it. Blockchain donations are far more tangible and rewarding.
Deep in our hearts, we always strive to provide the best possible service. When Binance first started, we up’ed the customer service game in the industry by providing a response within hours, and the industry followed.
This year, we stepped up our game again. Binance now offers 24/7 Live Chat customer support. You get a response within minutes.
Not only that, we provide 24/7 Live Chat in 7 different languages, including English, Chinese, Russian, Turkish, Spanish, Portuguese, and Korean.
Given our quarterly BNB burns, it was calculated that in 2 years and 3 months from founding, Binance has achieved a net profit of $1 billion USD equivalent. The actual calculation is a bit tricky as it was calculated based on crypto priced to USD at the end of each quarter, while in reality, we hold all our assets in crypto, and USD prices fluctuate over time. Regardless, it is a nice round number and a significant milestone for a two-year-old startup to achieve.
2019 has truly been an adoption year for BNB. With over 180 projects supporting BNB in their ecosystems, BNB has one of the highest utility (use cases) of any cryptocurrency. You can use BNB to pay for flights, hotels, and of course coffee. The use cases are endless.
But even with all the developments both inside binance.com and in the ecosystem, the BNB price only went from $5 on in January to $13 in December. In fact, it has dropped quite a bit from a new all-time-high (ATH) of $39 in June. Markets work in strange ways that even I can’t explain. My opinion on this matter is obviously biased, so I will let you make your own judgments.
Many people ask us what are our grand plans for 2020; we don’t make grand plans. Neither do we make new year resolutions. We prefer the “slowly but surely” mentality. Our experiences have taught us that grand plans change faster than we can announce them. So, we typically don’t announce grand plans ahead of time, we will announce them when they are ready to be launched. As mentioned throughout the article, we have many projects underway.
One of our key goals for 2020 is to bring crypto to the masses. For this, we aim to enable fiat-to-crypto trading for 180+ fiat currencies. We always have a number of strategic acquisition discussions in the works, a couple of them are major and will have a significant impact. We will announce it in due time.
We are further decentralizing ourselves in every way, from our team structure, work locations, operations, product, and services. We are even drafting a new incentive structure to replace traditional ESOPs, as we resemble more of a community than a company. We call this the ETOP (T for token). We will share this new idea with the world once we work out all the details.
Last but not least, we hope to fully open-source Binance Chain and Binance DEX in 2020.
We strongly believe that 2020 will be a year of adoption. Governments around the world will adopt crypto in one form or another. Some are looking at ways to adopt existing cryptocurrencies, some are planning to issue their own central bank digital currencies (CBDC) with varying degrees of freedom. The ones with higher degrees of freedom will see more adoption and dominance of course. We also see many traditional financial institutions entering the space. Many payment service providers that were reluctant to provide services to cryptocurrency companies are now eager to do so. We are seeing a race now instead of resistance.
This year also marks a new decade, which is meaningful when you look at things on a longer time horizon. As Bill Gates said, most people overestimate what they can do in one year, and underestimate what they can do in 10 years.
By 2030, not only will blockchain and crypto still be around, they will be everywhere.
Crypto will be used to pay for self-driving versions of Uber. Crypto will be used to buy things from half a world away and have them delivered to you via drones. Crypto will be used to fund biotech research. Crypto will be used to fund ambitious projects like going to Jupiter. (Okay, maybe not 2030, but who knows…)
Blockchain will be used for identity, with proper privacy controls. Blockchain will be used for voting in elections. Blockchain will be used for mass-adopted, decentralized social media, without worries of platforms randomly shutting down your accounts with millions of followers. Blockchain will be used to track public project spending. And much more...
I wouldn’t even dare to make any price predictions on this time scale, but neither is the prediction important. What’s important is blockchain (and crypto) will be used everywhere, and we won’t even think about it, much like databases are used in almost all applications today and we don’t think about it.
Team & Community
Lastly, I want to close by thanking my colleagues in the Binance team. Thank you for your contributions, commitment, and dedication, your great work has not gone unnoticed. In the same breath, I must also thank our Binance Angels, who volunteer their time and effort to help the Binance community and work tirelessly at it, all for the cause.
To our community of users, partners, and friends, we’re beyond grateful to have your support. In this infinite game, and in the face of significant challenges, we have made significant progress.
Let’s make 2020 another incredible year in crypto. We wish you and your loved ones joy, peace, and good health in the New Year.
- CZ and the Binance team