It’s hard to believe that by holding ICO for some $15M can create a leading in daily sales crypto stock exchange. And it only took a year for that.
We will discuss everything about Binance in this article.
About the company
The Binance crypto stock exchange was founded in the summer of 2017, in China. It was founded by two leading employees of OKcoin stock exchange, specifically Changpeng Zhao, the CTO and Yi He, the co-founder of the platform. Eventually, Changpeng Zhao became the CEO. He has been looking after the company since then.
In order to launch the stock exchange, they held ICO during which there was a sale of tokens called Binance Coin. That’s when they raised $15M million dollars. By today’s standards, it’s a very modest sum of money, but it was enough for Changpeng Zhao and his team to create a leading marketplace.
After the cryptocurrency ban in China, the stock exchange moved to Japan, where they seriously consider moving out to Malta where the legislation is even more loyal for cryptoprojects. Today, Binance is considered to be the leader in daily sales of cryptocurrencies.
The main area of Binance activity is the international cryptocurrency trading. In order to become a trader, it would be sufficient to register using an email, no other requirements in terms of citizenship or local area. Having created a basic account in mere minutes, a user can then export their assets for a total sum of no more than 2 Bitcoins. That’s where the verification comes in play - you would need it to upgrade your export limits to 100 Bitcoins.
The main benefits of the stock exchange are the practically instant order processing and the minimal commission fees. Over 200 most liquid cryptocurrencies and tokens are available for trading on Binance. The stock exchange has gone purely crypto as no fiat money are supported. However, one can choose to use stablecoins in these cases - such as USDT or TrueUSD, which are equivalent to the US Dollar.
The stock exchange offers two trading terminals: the basic terminal for newcomers and the advanced one for professionals.
At its core of the crypto stock exchange economic model lies Binance Coin. It is an ERC20 token that was released using Ethereum blockchain. After holding the ICO, the stock exchange offered the loyal program to the token owners, resulting in an exclusive deal for Binance Coin owners where they can get various discounts on the stock exchange.
Besides that, the stock exchange supports the cost of its token with a money burning procedure. Overall, 200M Binance Coins were issued. Each quarter, the platform spends 20% of its profits to buyout the coins back from the users, deleting the bought coins afterwards. This procedure will go on until the supply of the branded tokens reduces twice from the initial 200 million coins.
Binance Coin is also helpful in dealing with cryptocurrency dust issue, when the minimum account balance cannot be used to export or trade. So in order not to leave these funds dead, Binance offers converting them to their tokens with a single click of a button. The deal is very beneficial as Binance Coin is ranked among the first 20 cryptocurrencies by capitalization.
Hackers couldn’t resist the attention the top stock exchange was getting, and they have already tried to hack it twice. The security system of the marketplace is reliably protected, but the hackers managed to access the trading bots of users. In March and July of 2018, they used these bots to artificially pump up the cost of the little-known coins called Viacoin and Syscoin. The second attack forced Syscoin price rate to go from $0.26 to $624M.
During both of these attacks, Binance had to immediately shut down all trade operations and block the fund export. Then, they cancelled illegal cryptocurrency operations, leaving hackers with nothing, all while the users’ accounts were left unharmed. To prevent the future attacks from happening, Binance decided to dedicate 10% off of their commission fees to the security program.
Plans for future
Binance will definitely do everything possible to keep the leading places on the cryptomarket. And the first step is gonna be the addition of fiat currency trade. According to the CEO of the stock exchange, Changpeng Zhao, euro and British pound can be added during this year. The company is actively communicating with the Malta and Jersey island authorities regarding this implementation. Besides that, Binance is opening a subsidiary stock exchange in Uganda called Binance Uganda which will support state currencies.
But the endgame of Binance is the transformation from a private company to the trade community of cryptoinvestors. For this operation, it is required to develop and launch a personal blockchain that will support the following decentralized cryptocurrency stock exchange.