During his fourth live ask-me-anything session, Binance CEO CZ addressed several of the community’s questions regarding Binance US, DEX, and IEOs, among many others. Read the full transcript here.
[This transcript has been edited and condensed for clarity.]
First of all, thanks for listening in. A lot of things have happened since last month. Since the last AMA, we just went past 23 months. It was exactly two years ago (June 18, 2017) when we released our first whitepaper, version 0.1. We had no advisors’ list on it when I started sending out the whitepaper to people.
Since last month, we have been testing our margin trading. We have a fully revamped website -- Binance 2.0 -- and we are now [preparing for] the Binance US exchange.
I'll jump into the questions now. I think what everyone's really interested about, the hottest topic right now, is Binance US. Let me explain a little bit on the process/background and answer questions for this topic.
First of all, why the change? As I’ve always said, we have always wanted to operate in a fully compliant manner everywhere around the world. Everywhere we go, we want to be fully compliant, and we don't want to step on anybody's toes. We don't want to be cross anybody's boundaries, etc. So far, Binance has not targeted the US market at all. We've been focusing exclusively on non-US markets. But I think the time has come when the markets are mature enough that we do want to find a way to service the US users.
So we worked very hard in the last little while, and we have a partner in the US, BAM Trading Services, and we want to serve the US users in a fully complying way. So that's what we’re doing at a very high level, and there are a lot of rumors which I'll clear out first.
At Binance.com, we have always had terms of service in place, but we will take slightly stronger measures in terms of compliance or the enforcement of it. So there are a couple of rumors which I want to clarify on.
Come September, will Binance seize US users’ funds if you do KYC?
We already blocked registrations [from the US]. If you do KYC right now on Binance.com, you cannot select the US on the drop-down selection for countries. But as we also stated, after 90 days, people [who do not meet the requirements under the terms of service] will not be able to trade, and they will not be able to deposit. But you can always withdraw. Binance will never seize anybody’s funds, so we will always let people take their funds away with them.
I would say the only situation for [seizure to be] possible is because law enforcement agents have requested us to do that. And in many of those situations, we are not able/allowed to communicate with that particular user. So chances are, if your funds are frozen on Binance and there's no response, there's probably some law enforcement involved. We are not able to say that [it applies] on a specific case by case basis, but that's our sort of policy in principle.
Another rumored concern: If we restrict US today, tomorrow it will be another country: your country or some other country.
Some International members are a little bit worried about that. But I think you can use common sense to judge the situation. As I said, we always want to be compliant in most jurisdictions, so if you live in a country that has very aggressive limitations on its citizens, then you are at risk.
But if you live in a country that's relatively open and historically does not have this kind of issues with other websites, then you most likely okay. So especially if you live in a country that aggressively attacks foreign businesses for servicing your citizens, then most likely you're in a high-stress situation, but I would say most of the countries out there do not have this risk.
I would say that for the majority of the people out there, this is a rumor you don't have to worry about too much.
Will Binance US be overseen by CZ, where you give it the same attention [as Binance], or will it be fully managed and run by BAM? - Calvin Lambert
Binance US is run by BAM Trading Services. So they have full control over it, ran by a separate entity. I do not have any legal titles in there. I do not have an operational role in there. I do have some influence, just by my opinions, but I don't run it day to day.
Binance.com does provide the technology for that platform. So basically that platform will have the same technology and wallet management services that Binance.com uses. So you’ll use the same technology, the same look. You’ll look at and feel the same type of user experience, but it will not be managed by myself. I do not have a role in there, and it's not run by Binance.com as well.
When will Binance US launch?
We definitely hope [to launch] within the three-month time frame, and we're working very hard together with our partner on that. But the truth is there's there is some uncertainty, we don't control everything. But I think three months is generally a reasonable amount of time to get an exchange up and running.
Will SAFU fund apply to America? - RallyQT
So that's a pretty interesting question as well. Binance.com and Binance US are separate legal entities. So the Binance SAFU fund will not apply to Binance US. But it's totally possible for Binance US, once it's up and running, to set up their own SAFU fund. They will probably call it SAMFU for America. So it's very possible for them to do that. But we don't know for sure. There are a lot of details that still not clear to us at this moment yet.
What will be the list of coins that are going to be available on Binance US? - Cryptogoof, etc.
If you see any list circulating out there, it's FUD, because the truth is that such a list is not fully decided. So don't overly rush to conclusions and don't believe in random things you see on the Internet. Binance US will publish an official list as soon as it's confirmed. But until then, there's no official source, just assume that any list you see is FUD.
Will BNB be listed on Binance US?
We don't know yet. We, of course, would work very hard to try to get BNB listed on Binance US. On the positive side, if you look at Binance Uganda, Binance Jersey, and Binance Singapore, all of which are fiat-regulated exchanges, they do have BNB listed already. And a number of requirements are already satisfied by the BNB token. For example, a number of anti-fraud, KYC, and AML tools are working with BNB. So we definitely do want to get BNB listed on Binance US. But again, until it's confirmed, until there's no official announcement, we don't know. So let's just sit tight and wait a little bit and see what happens.
Are we no longer able to use Binance.com? Where else can we get BNB? - a few people from the US
It's actually quite simple; BNB is available for purchase or for trading directly through many different wallets supporting Binance DEX, so you can get them through a lot of those different wallets.
Actually, I'm going to talk about Binacne DEX next. There was some confusion about Binance DEX “blocking” US users. That’s wrong. Binance DEX is on the Binance Chain, which is a blockchain that does not block anybody. It can’t. It’s run by a number of different nodes, and every node services different parts of the world. There's no way to block. What we did is for Binance.org, which is a website that we own, we blocked US access. That's just a website. That's not the DEX per se.
So Binance DEX can be accessed through many other different wallets. Off the top of my head, there’s Trust Wallet, Atomic Wallet, Math Wallet, Infinite Wallet, Coinomi Wallet, Magnum Wallet, Elliptical Wallet, and many other wallets. It's also supported by hardware wallets like Ledger. I apologize if there are any other wallets I did not mention by name, but you can access all of those wallets independently of the Binance.org website.
At least for now, for US users, you're free to use that. Whether that's compliant in your local area, we don’t know. My understanding is that the current regulations are unclear. There have been different opinions voiced by different people again. I'm not an expert on that, and you have to do your own research and do what you think is right.
When Binance stablecoin? - Rally QT
We announced the BGBP stablecoin, which is a GBP British pound-backed stablecoin, last Friday. I think our CFO Wei announced that on the Money 20/20 Forum. The BGBP token is already live, although the circulation is still quite small. We will ramp that up in the next couple weeks or so. BGBP will be listed on Binance Jersey this Friday. So it will have full liquidity and it will have a direct conversion pair from BGBP to GBP. You can convert directly from this stablecoin to the native currency and on Binance Jersey, you can withdraw British pounds directly. It’s a very fluid access for that.
Next I'm going to talk a little bit about BTCB, which is a crypto-backed stablecoin based on BTC price. With crypto, now, it's a lot simpler to do pegging, because it’s very easy to show the escrow on Binance Chain. We already published the BTCB escrow address, which is a native BTC address. I think we escrowed 9001 BTC, just going with the community joke about “over 9000.”
There are already 9001 BTCs escrowed already which is a bit over US$80 million. A Binance.com will soon list of pair with BTCB to BTC so you can convert very freely between the two, and we do believe the spread will be very tight. So you can basically achieve or be close to 1-to-1 value.
And after that, naturally, we would propose for Binance DEX to list it. And given that we do have relatively high influence with the validators, we do expect BTCB to be listed on DEX as well. This will be a new way to facilitate any other token or blockchain that’s not on Binance DEX or Binance Chain to be able to trade on Binance DEX. We will continue to add more of these pegs for major cryptocurrencies.
At the same time, we would really like to see project teams to do their pegging themselves. So there is some work involved in managing the pegging, managing the reserve address, making sure that the wallet is secure, managing the trading pair to make sure the spread is very tight.
So there is some work -- it's very simple work, but there is some work. We would like to see project teams to issue their peg tokens. I believe that we already have one confirmation from a coin, which is Tron. Again, Justin Sun’s nose is very much on the money. Tron already confirmed that they will issue their peg token on Binance Chain. So that's one decent-sized market-cap coin that will be available on Binance DEX as well.
So we do invite other blockchain developers or teams to do that as well. So when the teams do that, Binance.com will facilitate adding a trading pair from the pegged token to the native coin, because Binance.com, a centralized exchange, is able to sustain support for multiple blockchains.
I do believe this is a big feature for Binance DEX, and it will increase the liquidity and trading volume for Binance DEX quite significantly. Hopefully, that will benefit all the BNB holders as well.
Will you be listing tokens from Binance DEX to Binance.com Exchange in June or July?
We want to increase the number of listings on Binance DEX. We want to help increase the liquidity there. So Binance.com is actually running a community listing program, where every month, we will select at least one coin from Binance DEX to list on Binance.com. There are a few minimum requirements: coins need to maintain a certain level of trading volume, and it has to be real trading volume. You cannot be obviously wash trading or have fake volume on Binance DEX, and we will use our best judgment based on the public data available. But if your token on Binance DEX has consistent real trading volume, then they are eligible for listing on Binance.com. We will select a minimum of one coin every month to be listed on Binance.com. There's no upper limit, we can select as many as we want. So we hope this will also be a driver for people and for projects to get the community to try and trade on Binance DEX.
We do view Binance DEX as the long-term future. There's no custody of user funds because users hold their own private key. We believe that's the way to go. But I think it's going to take some time to get there. So we do want Binance.com to contribute to that community and encourage that to grow.
Also on Binance DEX, there's another update coming from the technology perspective. The next update will change the matching logic a little. When we first conceptualized Binance DEX, we went for an open auction because there's a one-second block. We thought that one-second open auction will be the best, and that actually works really well to prevent front running, given all the data and all the orders are public. But we found out that many users are not used to the open auction matching logic because there's logic to finding out a middle price. The price is not very determined.
We will change that logic a little bit to be more similar to a limited order book, price-time priority- based matching logic. So that will come probably sometime in June or July. So that's the next update, that's a major feature in the next update, And there's also a number of other features that are coming to Binance DEX as well.
The Binance DEX team, which comprises of a community, they’re improving the platform quite quickly.
Any plans to increase the number of validators where average holders will be able to stake BNB in the future? If so, any estimates on release date?
In the short term, most likely no. In the long term, definitely yes. Binance DEX/Binance Chain is a community-driven project. And most of the developers are from the community actually, but right now I've influenced them. Basically, my personal philosophy is that a well-governed [block]chain that nobody uses is useless. You want to make a [block]chain that everybody uses, and then improve the governance or make the governance more decentralized.
Also, there are some technical hurdles as well. With a large number of nodes out there, it does actually have an impact on performance, because if you have a thousand nodes that need to sync with each other in real time, basically, then you have a thousand-squared (1,000,000) connections that you need to maintain. Whereas, if you have 10, you have 10-squared (100) connections. So the difference is quite big in terms of performance impact.
In the future, the design is to have as many validators as spread out as possible. But also for Binance DEX, each validator is very heavy. There are very heavy infrastructure requirements. You need many servers, very high bandwidth, etc. It's not the same as just running a node on a laptop. But the goal is that we do want a very large number of validators ran by a large number of people, but we also need to guarantee performance, etc. So that's the design philosophy.
Right now, the goal is just to make Binance DEX more usable and to have more people on there.
The Raven IDO (initial DEX offering) on Binance DEX today is not fair at all for small investors. We have no choice. It has to be better and fair.
So to answer this question, the IDO is very different from the IEO (initial exchange offering). IDO is not something we control, so we actually have zero control and zero participation in. A project, Raven Protocol, just decided they want to do what they call an IDO, and basically what it involves is that they promised to sell different tokens at different tranches, at different times, and that's something that no one has control over. If you want to sell your token on your desk, you can, no one can block you so. Again, so IDOs are very different from IEOs. The IDOs are not related to us. IDOs are run completely independent from Binance or the Binance DEX community/team. No one has control over that. If you participate in the IDO, make sure you understand the rules and how the DEX works, how the technology works. You're totally on your own. So be very careful.
They're very different from IEOs. Any Launchpad sale that Binance.com facilitates, they are vetted by Binance.com. We do the due diligence. We select projects very, very carefully. So that's very different. We put our brand behind it. Those things are very different. So you got to understand that.
That actually brings us to my third topic, which is IEOs, and there's a lot of anticipation for that.
On the next Launchpad project...
The next Launchpad project will be announced around Thursday (June 20), give or take a day or so, if it's not canceled, so it’ll will be announced this week. There are still some details which are being finalized, but I can share a couple of details. This time, people who want to participate are required to hold BNB. The holding period will be for nine days, instead of seven days last time. The snapshot, instead of the [previous] one time every 24 hours, will be [done at] random. So basically, you have to hold those BNB and not move them around. These are the few other minor tweaks. That's the gist of it. We were [aiming to] release the project name this Thursday, and it is a very awesome project. This time, the market cap is quite small. So the value for investors is very good, but do your own research and figure out if you want to participate.
Would it be possible to hold BNB on Trust/Ledger/Binance Chain wallet and still participate in the IEO?
Unfortunately, no, the short answer is no. It's not very technically feasible to track Ledger addresses versus Binance accounts. IEOs are a centralized offering from Binance.com, well, Launchpad is from Binance.com. In order to know who owns those addresses, there's quite a lot of marking work that needs to be done. I don't know exactly how... there conceptually could be a few different ways for [tracking BNB in other wallets] to be done, but it involves a lot of different work to prove that you have your private key. [Then there are questions like] what if it belongs to multiple accounts, etc. So we generally feel that that's a lot of work for not a lot of reward.
The participation requirements, the BNB holdings on Binance.com are not that significant. It’s not a small amount of money, but it's not also not millions of dollars. So we do feel that Binance.com is relatively secure for that. So the short answer is no for that. So if in order to participate in IEOs, you'll have to be on Binance.com. Otherwise, we have to scan the entire blockchain to check, etc. It’s just too much work.
The next part is margin. So that's the fourth topic which I want to talk about.
When margin trading?
Margin trading on Binance.com has launched already. There are over a thousand BNB holders with early access testing already and we do aim to roll this feature out very aggressively over the next few days or weeks to more people.
Right now, when you first start using margin, you get 1x or 2x leverage. For example, you have 10 bitcoins, you can borrow close to another 10 bitcoins and start trading, and as you trade more and more using margin without any issues, the maximum margin that's offered right now is 3x. So it's basically between 1x to 3x right now. We're relatively conservative right now. We just want to make sure that everybody gets used to this feature before we increase their margin leverage. So that's kind of margin in a nutshell.
Any plans to start lending services for BNB in Binance 2.0?
We discussed the lending features that go together with margins. Instead of centralized lending, we can do P2P lending, that's discussed and is not implemented yet. It is definitely possible in the future, but there's no active development on it right now. We do want to help make things work one at a time. So we want to make margin [trading] work properly first.
On that topic, Binance 2.0 is released. Most people see it as a new UI revamp, but it also includes margin, which is a big feature, but actually under the hood, there's actually a lot of back-end tuning and that was done for 2.0. So we're releasing Binance 2.0 in a very careful and gradual manner. I think [as of] last week Binance 2.0 is the default for three percent of the Binance users, and over the next couple of weeks or so, we're going to increase that percentage quickly as well.
The fifth topic which we shall discuss is BNB.
Will there be a BNB burn in June?
It’s not in June, it is in July. So the next burning will be around July 15th. Let me talk a little bit about the burn. So the burn will be done around July 15. We already did a burning April, and you can check the amount. The amount is pretty decent and we will do another burn on July 15-ish, plus or minus a couple of days if things get busy.
Why stop BNB burning when a hundred million BNB has been burned?
It’s a token economic design decision that we did when we were writing the whitepaper two years ago. That's also the amount that we planned to sell during the ICO, and we sold that amount. And right now, basically the BNB valuation is 300x [compared to the ICO]. Basically, for every dollar we raised before, we are now burning $300. Given that we raised $15 million dollars before, at this current rate will be burning a couple of billion dollars actually, depending on how the BNB price will go. We'll continue the burn.
Are there any plans to have the upcoming BNB unlock extended? Re: BNB vesting plans for the team, etc.
The short answer is no. Generally, we like to stick to the white paper as much as possible. So about the vesting, we will unlock the team portion of the BNB according to the white paper. I strongly believe that any change to the white paper causes a lot of confusion, anxiety, and issues to users, no matter what the change is. Even if it's a really positive change, some users will be unhappy.
I'll give you an example. Some people often ask us why we don’t give more BNB discounts on Binance.com. Again, that's something we scheduled in the white paper. We could increase, but if we do that, the guy who just sold BNB will be unhappy because we release this news that threw him off. So any change from the white paper is actually not so good. To the extent possible, we don't want to change the white paper. But what we did is, even the team portion [of BNB] was unlocked already. They sit on a few different addresses and that's listed on a few of the biggest addresses, and not much has been done with them. So today I can say that the Binance team have not sold any of the team portions of the BNB, and we’re already two years into the four-year period, so 3/5 of the BNB tokens are for the team portion will be unlocked come this July. But right now, none of that has ever been sold on the market. Our team and I, to be honest, don't see a need for us to sell any BNB. I think we should just hold them.
I hope that addresses that question. Those are the five organized topics I've collected from Twitter.
Who's your crypto idol? @CryptosBatman
Isn’t Satoshi Nakamoto everyone’s idol in crypto? I really wish we can do what he does, which is: he doesn't appear anywhere, he doesn't do anything and the coin he invented – this industry just evolves. I really hope that we can get to that point, but we are still quite a bit of distance away.
How are the other exchanges coming along? (Argentina etc) @RallyQT
Binance.US is top priority right now. We want to get the US site up and running as soon as possible. Argentina is being worked on, but we don’t have an ETA yet. I don’t want to over-disclose all of the names, because plans do change. I don't want to overly set the expectations wrongly, potentially.
If someone’s traveling to the US for a couple of months, but their KYC is submitted/verified under another country’s docs other than US, can they use Binance.com platform as well as Launchpad/IEOs? Any relaxation for those travelers? @awaan10036
To be honest, I think the short answer is probably no. It's actually not a simple question because there's a number of different complex dedicated issues on how KYC, AML, also risk management is done. If you suddenly access your account from a different IP address, most likely you probably can’t use it today unless a lot of other factors match, so I don't know the full answer to that question, but I actually don't really know, so you can try and see what happens.
When will Binance provide complex order types? @Vienna XBT
This is a very much requested feature. OCO is coming. I think that's the single most requested feature for the last half year or so. We have been working on it. The plan did get shifted a couple of times due to other priorities, but they will come very very soon. OCOs are coming very soon.
But at the same time, in terms of super-advanced order features, like algo orders and stuff like that — we do believe that those are really fancy features, but they’re really not super useful. Today, we're seeing increasingly that the guys who are very sophisticated traders – they use an API. With an API, you program your own algorithm and we don't know your secret. You have your secret sauce, you trade however you want to trade.
So we will add a couple of advanced order types, but we probably will not go crazy.
CZ, when will you come and see your french supporters so We can have a #bnbeer @Milky_Mike
Je voudrais une bière. I think that's all the French I know. So yeah, I'll go there when, I don't know. I actually don't know my travel schedule that far ahead of time. I actually have traveled a lot less this year than last year. So I still travel around Asia and Europe, but I've tried to push the frequency of traveling down. I try to attend a conference once every couple of months or so. Hopefully once every two months or less. I've been doing less traveling but I'm pretty sure sooner or later, I will make it to France and we'll have a beer.
No African projects on board, when we need it the most, why?
To my knowledge, at least 4 out of the 13 Binance Labs incubation projects in the second season are based or related to Africa. I think they're Bit Sika, Yellow Card, Xend and Raise. All of them are based in Africa somewhere. But at the same time, it does not mean that Africa projects or projects based in Africa will get priority consideration for Binance.com listing. We don't play favoritism that way. We would still want to maintain fair and treat everybody equally. So projects in Africa or anywhere in the world have to compete on the same basis: user adoption, good product, etc.
So I actually don't know if you have any Africa project. We actually don't really look at the location of the project when it comes to listing. Other than potentially maybe a couple of compliance restrictions. If there are no compliance restrictions, then we don't care about the location.
If starting today, what kind of crypto startup would you found, an exchange or something else? @VovaPetrov
That's an interesting question. Actually, I've never thought about it. I think I got really lucky with Binance, that I'm mostly making the biggest impact I could. Now I'm very happy that I have the opportunity to be in this position to make that kind of impact.
I don't have another crypto startup or any startup idea that I think I can achieve the same level of impact that I can get. If I don’t have Binance and started another startup, it most likely would be a Binance 2.0. I don't have anything else on top of my head.
What was your first encounter with cryptocurrency and what was the journey like going from a bitcoin investor? What you say will inspire those of us looking to follow in your footsteps? @OneVictorita
Okay. I'm not sure if I want to recommend everyone to follow my footsteps because everybody's risk appetite is a little bit different. I've always had a freedom driven mentality. So I first came I think I've shared this story a number of times but I think this is a pretty probably a good closing story to share. My first encounter with cryptocurrencies in 2013, when Bobby Lee asked to look at Bitcoin and Ripple actually back then. I did look at Bitcoin and Ripple and I loved it and quit my job, sold my house and converted all of that into Bitcoin. I started looking for a new job in the industry. I was relatively confident that I will find a job. I did not expect to be running the largest cryptocurrency exchange in the world back then. There's a little bit of random chance and quite a lot of luck involved.
So but we do work very very hard. We have a very strong team and I got really lucky with a team. And we got very lucky with the timing as well. So over the last two years now, Binance is one of the biggest exchanges in the world. We also do have a lot of influence. We recognize that and we want to use that for a positive impact.
Do you have any plans to add [privacy features] on Binance.com?
So we do. Yeah, so we are constantly adding new features to Binance.com. We don't have a lot of high priorities. I personally am a very strong proponent of privacy coins and privacy features and I do think people deserve their privacy in terms of financial transactions and trading. But in terms of Binance.com, when we will have them, what features we’ll add, which coins to support, we always don't discuss that publicly.
Will you be attending the meeting with Warren Buffett? Did Justin invite you?
Justin kindly invited me, but I don't think I'll be going myself. I would really love the opportunity to meet Warren Buffett, but I'm the person that doesn't take this kind of opportunity too seriously. I like things to happen by random chance or just naturally. If there's a business discussion that I can have with them, I would be more than happy too. His mindset is a little bit set against Bitcoin, I don't think he sees the value in Bitcoin. I'm not the kind of person that’s willing to spend a large amount of time to convince one person to convert, and I think Warren Buffett is super successful in what he's doing already.It doesn't mean that you have to have crypto to be successful. That's not a requirement. I think Crypto is really, really good. It has a lot of benefits but it doesn't mean that everybody in the world has to use it for it to be for crypto to be successful or for a person to be successful. So the two things are independent. I would love to have a chance to learn from Buffett if I could but I think it would disrupt a lot of the plans we already have. We will be honored if somebody from Binance could go, we'll see how it turns out.
Binance IOS app did get delisted from the IOS store, for a number of reasons that's not fully clear to us just yet. We are working with Apple on that and will hopefully be able to resolve it soon.
Opinions on Facebook Coin?
I don't have a lot of extra information that's not public about Facebook. I think my personal view is, the more coins in the world, the better. I think Facebook has a lot of distribution power. They will be able to reach a very large number of users that we, as an industry, are not able to reach today. I think that's a net positive for people. Facebook will educate people about cryptocurrency, and then a number of people may adopt their coin, which will actually make it easier for them to adopt other coins. So yeah, basically the more coins in the world the better.
What's the next goal for Binance?
To be honest, the long-term goal for Binance is actually to increase cryptocurrency adoption. Hopefully, the goal for Binance is to become less of a company and more of a community. So hopefully, there will be no company at all. That's kind of long-term plan that we want, and we want to (eventually) go the fully decentralized way. But, at the same time, for the fully decentralized way, decentralization is a gradient scale. So being fully decentralized means everybody runs a node. Nobody is in charge Etc. There's a greater scale towards the say Binance.com. You have to hold your funds in the custody of the exchange and then trade. There are more centralized ways than that, but we want to go there step by step. So the DEX right now the first step. You hold your own private key. Nobody else knows your private key. We want to retain the usability features of high-speed fast transactions, fast finality, and high credibility. We want to achieve those and over time become more and more decentralized. We'll see we want to achieve, one step at a time with user adoption, and that's that.
When’s the next Periscope?
I’m aiming to host live Periscopes (AMAs) every month or so. In the past, there has been one roughly, about every 40 days. In about a month or so I'll do another one.
Thank you so much, and thank you guys for joining in. I'll talk to you guys next month.