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Jul 17
2020
12th BNB Burn | Quarterly Highlights and Three-Year Review from CZ


For our 12th quarterly BNB Burn (April to June 2020), Binance burned 3,477,388 BNB, equivalent to 60.5 million USD worth of tokens. Binance CEO CZ also narrated the story so far for Binance over the past few years.

Fellow Binancians, 

Binance has conducted its 12th quarterly burn, amounting to 3,477,388 BNB. This burn, which represents trading activity across Binance spot, margin, and futures exchanges, as well as the various portfolio projects and ecosystem partners that use BNB, from April to June 2020, permanently took away about 60.5 million USD worth of BNB out of circulation.
This is the biggest BNB burn ever recorded, in terms of BNB and fiat volume. For reference, see the relevant links for transfer: [Link 1 | Link 2] and burn.

I’d like to take this opportunity to share a few thoughts and achievements with you. And on this occasion, having just celebrated Binance’s 3-year anniversary, some highlights of the Binance story so far.

The 12th quarterly burn represented business activity from the second quarter of 2020, during which we saw the following milestones:

  • Binance Futures maintained its status as a top crypto futures exchange. It has increased its perpetual contract lineup from 24 to 32. The platform has also started offering Quarterly Futures Contracts, with two contracts currently live.

  • We launched Binance Options, currently available in BTC, ETH, and XRP.

  • We started offering Binance Leveraged Tokens, through which we addressed crucial problems related to the current leverage tokens on the market.

  • We worked extensively on enhancing our fiat-to-crypto channels. The Binance spot exchange now features 30 fiat-to-crypto direct trading pairs, while Binance P2P now supports 31 local currencies

  • Before the quarter ended, we started supporting direct crypto purchases on Binance via credit cards in 180+ countries.

  • BUSD is now one of the top 5 stablecoins in the world, recording more than 1 billion USD in tokens issued and a market cap as high as 200 million USD.

  • We started the quarter by acquiring CoinMarketCap, crypto’s landing page. We have since started a number of product iterations with the CMC team, while maintaining independent operations. 

  • We ended the quarter by acquiring Swipe, a crypto debit card platform that we collaborated with to jointly launch Binance Card, making it possible for Binance users to use and spend their crypto anywhere in the world with just one swipe.

  • There are two major investments that mark our expansion into new markets and new areas. We invested in the first regulated exchange Tokocrypto in Indonesia, launched and empowered by Binance Cloud, and set foot in the crypto online travel agency business via a merger of TravelbyBit and Travala.  

  • We launched Binance Pool, our own mining pool, which offers some of the best rates in the market. It has ranked in the top 10 list of mining pools in the world, reaching as high as top 6.

  • We continued to drive more crypto adoption by forging partnerships with crypto industry leaders, such as Brave Browser, BitPay, BitTorrent.

  • Binance Charity’s Crypto Against COVID initiative has resulted in about 4 million USD in donations, distributing aid to more than 20 countries so far.

Three Years

As Binance celebrates our third birthday, I can’t deny a proud feeling, not so much for our achievements, but for how hard our team has worked in the last 3 years to overcome many challenges. This is the part many people don’t see: our team has put in the sweat to turn many brutal challenges into “luck”.

Values Eat Strategy for Dinner

They say culture eats strategy for breakfast. I agree with that. But Binance has a very diverse culture. Some of the key “strategic” decisions were not made by us or me, at least not in the deliberate manner one would imagine. Many of the “strategies” were simply how we choose to deal with challenging situations being put in front of us. We had to make tough choices, decide what’s important to us, and what to give up, based on our core values. Sometimes, this can include giving up 40% of the cash reserves and moving to a different city at the same time. In good or bad times, we stick with our core value of protecting our users.

I will take you through a light version of our short history, quarter by quarter.

ICO

Three years ago, we got lucky with a successful ICO, raising 15 million USD in crypto in 2 weeks. This was documented in my previous article, The Binance.com ICO Experience. Everyone on the team was working 22-hour days. A common phrase we said to each other was “Hey man, go get some sleep.” The response was usually some form of “I am still ok, I got this issue to fix, almost there”. We worked super hard. 

It wasn’t without costs though, one key member had an eye infection that turned into an ongoing irritation problem. He uses medical eye drops heavily even today. I have developed a bit of a back/disc problem which led to a surgery this year. We had many issues and challenges to overcome. 

On the positive side, fighting in the trenches together really bonded the team, which still serves us well even to this day. Binance has a super tight team.

WFH

Roughly two years and nine months ago, our Binance team started to work from home, half by circumstance, half by choice. While it seemed a big challenge at the time, we didn’t expect the whole world to be forced to do so two and half years later. What seemed to be a disadvantage turned to an advantage. We at least had time to transition into it. We also had the privilege of using what we call “Starbucks offices,” or working in coffee shops as a group, for gathering for a long period of time. Many of our team members also enjoyed a new nomadic style of life as they worked and travelled around the world at the same time. 

Do the Right Thing, Not the Easy Thing

China banned crypto exchanges in September 2017, less than two months after we started. In the same breath, China asked all ICO projects to return funds to investors. It meant that if we wished to continue running an exchange, the team had to move. Second, the ICO “ban” caused the price of most tokens to drop, which caused many projects to be unable to return the full amount of funds to their investors. A lot of our users were at a loss. Binance had facilitated four ICOs on our platform at that time. 

We did some calculations: If we were to cover the difference and make our users whole again, it would cost us about 6 million USD. Having just raised 15 million USD two months earlier, we were not yet profitable. (We charged no fees for our first month and trading volumes were still low. We were a small, new exchange back then.) Needless to say, we also needed money to move an entire team to a different country. 

We unanimously decided to spend the 6 million USD to make our users whole. The team discussed it first without me. I was on the road. I remember picking up the call while on a moving train, they explained it to me, and I just said yes. The call was less than 10 minutes. We followed our core principle: put our users first, and do the right thing. The right thing is usually not the easy thing.

To this day, that is the largest single expenditure for Binance, percentage-wise. It accounted for about 40% of the funds we had at the time. We chose to protect our users, and we’ve shown how much we are willing to do to provide quality service. I remember that we got so much positive press from this decision. And in a dire time for everyone, many users flocked to us, which helped us turn a decent profit a month later. 

I’ve seen time and time again, something that seems negative at the beginning may turn out to be positive in the long run, if you do the right thing.

ATH, for Bitcoin, BNB, and Binance

Another three months later, on December 17, 2017, bitcoin reached its all-time-high (ATH). Trading volume on Binance also reached an ATH of 11 billion USD worth of crypto. On that same day, Binance became the world’s No. 1 crypto exchange by trading volume. BNB soon followed to a high of about 24 USD at the time. Things were working out.

Bloomberg invited me to go on live TV in their Tokyo studio. This was my first-ever TV appearance. I didn’t have a jacket. (I travel light.) I also wanted to shill the Binance logo, so I rocked the Binance hoodie on Bloomberg TV. It wasn’t by design, I really didn’t have much of a choice. That’s the first public appearance of the now-famous Binance hoodie.

A couple of weeks later, Forbes wrote an article about me, and surprisingly put me on the cover (February 6, 2018 issue). No, I am not even the richest in that issue’s list of crypto-rich people. Forbes invited me to their Hong Kong studio to do some photo shooting in January 2018. Again, I was travelling light, without a jacket, so the Binance hoodie would just have to do. In hindsight, it could have been the hoodie that got me on the cover of Forbes, a magazine that almost always featured men in suits. The Forbes article helped Binance reach an audience that was just beginning to understand the potential for crypto and blockchain. Two weeks later, I was attending a meeting in Taiwan hosted by Congressman Jason Hsu with a large number of other regulators. Jason had prepared a copy of the Forbes cover for everyone. And I didn’t have to explain who I or Binance was. Everyone in the meeting was very respectful and open to collaborations.

Regulatory Uncertainty in 2018

Good days don’t last forever. 

Near the end of March 2018, on a Wednesday, a prominent newspaper in Japan carried an article that Binance had received a warning from the FSA (the local regulator). We searched all of our inboxes, physical or email, couldn't find the warning, and called the news FUD. However, two days later on Friday morning, I received the email at 8 AM Asia time. I checked with the team that it is not a prank email, then tweeted about it within the hour. Keeping transparency with our users.

Being transparent helps. Bloomberg reached out for another interview, during which I mentioned we had plans to go to Malta, which I had visited in Jan and Feb. Bloomberg printed the article around noon Asia time. By 4 PM Asia team, (8 AM in Europe), the Prime Minister of Malta woke up, presumably saw the Bloomberg article, and tweeted “Welcome to Malta @Binance…” I believe this was the first country PM to publicly welcome a blockchain business, on Twitter no less. Things happened organically. There was no coordination.

Looking back, even just two years ago, the regulatory status blockchain in many countries was unclear or even negative. Today, this sentiment has changed to being very positive. Central banks are now competing to issue digital currencies (CBDC). A lot can and has changed in two years. Knowing that we have contributed to that positive change, even if just a little bit, makes us even more eager to see what change we can create together in the next few years.

Travelling the World During Winter

Given what happened above, and our transparency about it, many people started to offer help. A crypto friend I only met a few times introduced us to Bermuda. We flew there and met with Premier David Burt in April 2018. They were immensely hospitable and sent the Premier’s protocol to pick us up at the airport. The driver showed up in a suit jacket, shorts and high socks, which I thought was interesting. I soon found out that it is formal wear in Bermuda. To be respectful of local cultures, I together with the Premier’s aide, went and bought a set for myself as well, and showed up in shorts and high socks at the ceremony the next day. Everyone praised me for going local formal. But surprisingly, everyone else was in long pants. That picture was so viral on social media though, I wish I had a few more of those.

If you are tracking the places I mentioned so far, you would understand what I meant by nomadic earlier. We started to travel more, to push crypto adoption to more places. 

Another friend introduced us to several heads of states in Africa, so we flew to Togo, Ethiopia, Uganda, Kenya, and many other places that preferred to stay private. 

Did I say Winter? I meant crypto winter. We spent quite a bit of time educating and pushing for favorable crypto regulation all around the world, during crypto winter. We just kept pushing on.

Need for Speed

The rest of 2018 continued the crypto winter, and the price of bitcoin dropped by 85% from ATH. At a time when many were saying “bitcoin is dead,” I kept asking the team to improve our platform’s performance. Would we be able to handle 10x or 100x volume? I did not fear that “bitcoin is dead”; I was fearing that we would not be able to handle the load when bitcoin increased by another 10x. System wise, we have a fast matching engine, but some of the peripheral systems would have had a hard time keeping up if bitcoin seriously pumped in 2018. We also still only had a small CS team. We were aggressively ramping up, but ramping up headcount while raising the bar is a slow process.

In hindsight, it was “lucky” that the 2018 crypto winter gave us a break and an opportunity to catch up. We were already under stress given our rapid rise to the world’s largest crypto exchange in a short 6 months. We needed the break to pay our technical debt and revamp our systems, which often takes a long time. We started a whole system re-write project in 2018 that was only complete 2 years later. We also started on key projects like the Binance Chain, which also took more than 10 months to roll out.

2019

Many of the projects we started in 2018 started to roll out in 2019. 

We started the year with the BitTorrent IEO on Binance Launchpad, at the bottom of the bitcoin price history. Honestly, we did not anticipate IEOs would have the industry-wide impact that it did. We just thought blockchain fundraising is a killer app, and we would continue to provide this platform to blockchain projects all around the world.

Also in 2019, we rolled out the much anticipated Binance Chain/DEX, plus margin trading and futures. All of these are major projects, and we saw immediate growth for all of them.

What doesn’t kill you makes you stronger

We lost $42M USD to a major hack in May 2019. Binance covered the costs from our SAFU Insurance Fund, and no users suffered any loss from the event. It was a painful experience, but looking back, may be a blessing in disguise. The experience pushed us to super-charge our efforts on security revamp initiatives and made our systems far more secure than before.

After a week of devilish work, we resumed deposits and withdrawals. To our surprise, we saw more deposits coming in than withdrawals. To this day, we are incredibly thankful to our strong and supportive community.

For the rest of 2019, we saw our new products grow rapidly. Margin trading services grew to occupy a healthy share of our trading volumes, which allowed us to launch lending and savings products.

Binance Futures, like spot, grew quickly to become one of the biggest futures markets in less than 6 months.

2020

You probably would agree, 2020 has been a weird year. I started the year with serious back pain, to the point where I had to cancel travel and conference plans. I decided to get surgery done in January. Before I even got out of the hospital, COVID-19 had started causing many deaths in parts of China and the rest of the world. We immediately started our charity efforts to help in any way we can. Given the urgency of the situation, it was important to get masks and PPE to the people in need, fast. We collected 4 million USD in donations, and Binance Charity has used the proceeds to distribute more than 1 million masks and PPEs to more than 20 countries so far. 

In a strange turn of events, including COVID-19 shutting down most of the traditional economy, record job losses, Fed’s massive quantitative easing, and the bitcoin halving, we saw faster user growth than before, and trading volume continues to increase.

Given that we have adopted a remote workplace for the last two-and-a-half years, we didn’t have much to adjust to. We have continued to build and push out new features and updates. In Q1 of 2020, we had a record BNB burn amount, and in Q2, another record.

Here are some figures that sum up how far we’ve come, especially in our third year:

  • We offer 218 tokens and 616 trading pairs on our spot exchange. This was up from 160 tokens across 523 trading pairs at this point last year.

  • We launched margin trading near the start of Year 3. Now, we support 40 tokens and 87 trading pairs for isolated margin mode, plus 29 tokens and 65 trading pairs for cross margin mode.

  • We offer Binance Savings products for 30 tokens, while Binance Staking supports 23 tokens.

  • Since launching Binance Futures in September last year, we now offer 32 perpetual contracts, plus two Binance Quarterly Futures contracts.

  • As of the latest count by us, there are at least 112 use cases for BNB and 72 use cases for BUSD, our US dollar-denominated stablecoin launched in September last year.

  • We have a total of 189 BEP2 tokens on Binance Chain, while Binance DEX has 132 trading pairs.

  • We grew our Binance Angels roster to 200+ international angels worldwide this year, up from 108 last year.

  • We also grew our network of connections with Binancians from around 1,465,000 connections to begin Year 3 to more than 2,454,000 connections today, across our groups and pages on Twitter, Telegram, Facebook, Instagram, and YouTube.

As a final note about Year 3, here are a couple of pictures that show how much we have grown this year. This was the Binance ecosystem a year ago:

And here’s the ecosystem now:

Looking Ahead

One of the favorite questions people ask me is, “What is the future price of BNB?” And I have said before, I don’t have a crystal ball. Our success didn’t come from being able to see the future. We got to where we are today because of our team’s hard work.

If I must, I see the short-term future to be highly volatile. Massive amounts of wealth are taken away from people and redistributed to a few selected groups by quantitative easing. Given the amount of printing for fiat, fiat currencies around the world will devalue against most hard assets. And for crypto currencies with limited supply, your guess is as good as mine as to what will happen to their adoption and price. Why is bitcoin’s price not perfectly reverse correlated with stock markets? I wrote an article about that. 

Binance will continue to build.

  • We are building more features into our products such as delivery and perpetual futures

  • We are simplifying the user experience on our apps

  • We are adding more fiat gateways

  • We are working with multiple regulatory agencies around the world to push for faster adoption of crypto

  • We are sending more masks and PPEs to hospitals around the world

  • We are supporting new languages across our products and CS

  • We are investing into projects to build the ecosystem

  • We are creating more ways to further the utility of crypto

  • And much more...

In these volatile times, I am more certain about the future of crypto than ever.

Lastly, we want to take this opportunity to thank all of you for supporting us through the years, and hope you stay healthy and SAFU!

- CZ & the Binance Team