Binance Futures Turns Two: Getting to the Next Milestone Together
Binance Futures was launched two years ago in September 2019, when Binance.com had already become a leading crypto exchange for spot trading. Users had indicated their interest in us offering futures products. After months of user-centric design, planning and testing, we started our futures exchange with a Bitcoin futures contract that today leads the market in price discovery.
We took note of one particular feedback: almost all the futures exchanges at that time were focused on incentivising market makers. This inadvertently discouraged takers who wanted to make buying trades, and caused the market’s overall liquidity structure to be one-sided. Such an imbalance affects the market’s efficiency, and if not corrected would lead to users finding it harder to match trades since everyone would want to be a market maker. We designed a zero- or low-cost taker fee program to encourage more participation and it was well-received by the community.
Milestones & Learnings Along Our Journey
This user-centric thinking is at the core of what we do, as we continuously explore ways to improve our offerings and services. As we prepare ourselves for new possibilities and opportunities ahead, we wanted to share a few milestones along with our learnings:
Community First: we were realistic about the challenges in breaking through as a newcomer but we were also confident that we could differentiate ourselves by focusing on the community. This is afterall still an evolving industry and our hard work was recognized as we hit the second-highest market volume in less than two months after launching.
Diversity Brings Growth: once we had established our Bitcoin futures contract in the marketplace, we began to introduce more products. By offering our users choices, we help to cultivate the ecosystem’s growth, for instance launching our DeFi Composite Index 2020’s DeFi Summer. Today we offer over 170 futures products. In addition to ensuring our range of coin-margined and USDT-margin futures remain attractive, we are also actively scaling up our selection of futures margined in BUSD, a compliant stablecoin.
Crypto Doesn’t Sleep: unlike traditional markets, the crypto market operates 24/7. Users across all timezones are increasingly demanding more choices and greater financial participation, so maintaining an efficient matching engine and strong liquidity consistently will provide users with a good trading experience. Our NASDAQ-level matching engine processes orders easily with minimal latency (averaging 5 milliseconds at 100,000 orders per second), and we offer highly competitive pricing and low slippage.
User Protection comes in Different Forms: it is always worth remembering that Bitcoin was only created in 2009, and practically speaking the crypto market is still in its early years. Educating and protecting users is key for long-term sustainability. Binance is the first major exchange with a Responsible Trading Program, releasing innovative features such as a self-exclusionary Cooling-Off Period tool and setting a lower leverage limit for new users.
Commitment to Compliance: as Binance reaffirms its commitment to becoming a regulated financial institution, we restrict access in regions in compliance with local regulations. We will continue to proactively review and update our offerings so that they not only remain popular with users but also welcomed by local regulators.
What Does the Future Hold for the Crypto-Derivatives Industry?
At the time of writing, the cryptocurrency market cap is over $2 trillion. Mainstream adoption of cryptocurrencies continues to grow, backed by research and development as well as new institutional entrants. The latest market research by CryptoCompare indicates derivatives volumes increased by 37.8% in August 2021 to $3.4 trillion.
We are humbled by the community’s continued trust in us as demand rises. Binance Futures is focused on serving our users for the long-term, and offering products and services that users want.
In appreciation of our users’ support, we are holding a campaign from September 17th till September 23th 2021, with a total of 222,222 USDT Futures Bonus Vouchers and 222 limited edition NFTs to be given away. The campaign details are here.