Binance Transformation: More Than a Stock Exchange

    Доминация Binance
    Dominance of Binance

    Binance continues to hold a leading position among crypto exchanges and at the same time spares no money infrastructure and expansion of services, positioning its policy as customer-oriented. At the same time, each announcement of the new acquisition of Binance makes one wonder “why do they need it?”.

    Why is the exchange buying up various projects for its ecosystem, what are these projects and what can this “Godzilla” cryptocurrency market turn into?


    Growing like a yeast

    Рост Binance
    The growth of Binance

    Just 3 years ago, Binance appeared on the cryptocurrency market and the first 6 months this name did not stand out among dozens of exchanges, which during the hectic period of the heyday of ICO and Bitcoin rally grew by leaps and bounds. Nevertheless, the Binance model as a “small but fair exchange” proved successful, bringing more than 7 million traders to the site in just a year.

    Read the full article: Detailed review of the Binance

    guys from The Block study to identify the share of various exchanges from Bitwise Real 10 and track their development. The position of Binance on the modern market and the state of the ecosystem at the end of 2019 are clearly shown in the pictures below:

    Доля торгов на криптовалютных биржах по месяцам 2019-го
    Share of trading on cryptocurrency exchanges by months of 2019
    Развитие инфраструктуры ведущих бирж в 2019-м
    Development of the infrastructure of the leading exchanges in 2019
    Total, in the third quarter of last year alone, Binance presented 12 new services, which is more than any other top-level exchange.

    And in early March, Changpeng Zhao announced that this year Binance plans to make several major acquisitions, and 2020, according to him, will be the “year of adoption”:

    The first of these announced acquisitions has already taken place, and it has caused the community surprise and concern regarding the future fate of the purchased service.

    Watch the story of how Binance was created and how it became a real “monster” in the world of cryptocurrencies:

    The story of Binance

    Strategic takeover with appetite

    Создание корпорации Binance
    Establishment of Binance Corporation

    In its “ results years »Binance boasts that they made 5 strategic acquisitions in 2019, compared to 2 in 2018:

    [19459008 ] Interestingly, under the above tweet, Zhao himself added that there were at least 9 purchases, but the rest were not publicly announced. Of course, every company has the right to trade secrets, but hiding half of the acquisitions makes one wonder whether Binance is as transparent as it wants to seem to users.

    Be that as it may, we will consider the exchange’s purchases starting in 2019 in more detail:

    On September 2, the site announced that it was buying JEX - a platform for spot trading and derivatives trading. JEX was needed by Binance to launch the futures promised by users. As a result, a whole sub-platform Binance JEX appeared, allowing you to trade bitcoin futures, and later options.

    On November 17, Zhao announced that the company was investing in Mars Finance - a Chinese crypto publication:

    OKCoin, Huobi and several other blockchain companies also invested in Mars Finance, bringing the total valuation to $ 200 million. Binance's share in this investment, as well as its objectives, is not fully realized clear, however, Mars Finance is included in the company's shopping list in 2019. Perhaps the value is that the publication was the first Binance investment project in China.

    On November 21, it became known about the purchase of the Indian cryptocurrency exchange WazirX . Later it was integrated into the Binance ecosystem, so that the inhabitants of India were able to buy stablecoins for rupees for subsequent exchange for any of the coins traded on Binance. And this is against the backdrop of the ban of the Central Bank of India on servicing cryptocurrency operations by banking institutions. Perhaps the addition of the rupee is another step towards the goal of Zhao to integrate all fiat currencies .

    In April 2020, the Supreme Court of India repealed the Central Bank's directive, although the point in this case has not yet been set. Curiously, did Binance count on this, buying for $ 5-10 million an exchange in a country where exchanges cannot work?

    On December 5, Binance made a deal to acquire the analytic service DappReview . It is reported that the company served nearly 4,000 applications on 13 blockchains, providing them with analytics and user information. For the exchange itself, the value of the transaction, according to Zhao, lies in the possibility of further development in the field of dApps:

    It is noteworthy that in August Binance X was launched - a project to attract developers to create open source solutions based on the native Binance blockchain. DappReview will be able to provide these projects with the analytics necessary for development.

    On December 20, the company decided to invest strategically in FTX , a platform for trading cryptocurrency derivatives. The investments were made both by direct injection into the FTX share capital, and through the purchase of a native platform token - FTT, which was added to the exchange listing. FTX may have taken part in the development of OTC and spot trading as part of a package of services for institutional investors and traders. It seems that FTX and JEX have created a solid foundation for trading cryptocurrency derivatives, and in 2020 we should expect the exchange to expand in this direction.

    The first purchase, or rather, the investment of Binance in 2020 was the fintech project BxB , in which the company invested $ 432,000 BxB with Binance Co. Ltd. (a Binance subsidiary in South Korea) should provide a support center for Korean Binance users. Before this, the site introduced KRWb, a stablecoin linked to the Korean won, which indicates plans for the expansion of the exchange in South Korea.

    Well, and finally, what resonated in the crypto media, one of the largest transactions in the industry is the acquisition of CoinMarketCap . Binance confirmed the purchase on April 2:

    Read the full article: Detailed review CoinMarketCap

    The amount of the transaction was not reported, but The Block writes that Binance paid about $ 400 million through direct injections and through the transfer of tokens BNB. The article indicates that the company can change the model of the analytical service, replacing advertising with contributions from exchanges.

    If this is true, then Binance will have the opportunity to cut off those who refuse to pay for listing in the largest analytical service. It is also unknown whether CoinMarketCap will have additional rules for providing information and requirements for cooperation in the future.

    Note that under the terms of the transaction, Brandon Chez - the founder of the project must resign as CEO. To refute the rumors, CoinMarketCap announced that they would not change the listing rules:

    Bobby Ong - founder of CoinGecko in an interview indicated that only CoinMark was absorbed after the takeover CoinGecko will remain the only independent analytical service, as a competitor [Binance] in the new environment will be difficult to maintain neutrality.

    So, the largest cryptocurrency exchange (at least according to The Block), now has the largest analytical service in its pocket. And although CoinMarketCap traffic is officially considered the reason for the purchase (more than 200 million visits over the past six months), such a bunch can not but alarm the community. Will Binance continue to play honestly with such a trump card in its hands and are competitors worth fearing? The question is still open.

    You cannot buy, collaborate

    Криптовалютная биржа Binance
    Binance cryptocurrency exchange

    In order to fully appreciate the growth scale of the Binance ecosystem, We will also consider partnerships concluded in 2019. The following arrived in the Binance regiment:

    • In April 2019, a collaboration was signed with CipherTrace , a company engaged in the analysis and security of blockchain networks. Binance indicated that partnerships are needed to expand the anti-money laundering program;
    • In early May 2019, the exchange began working with Elliptic in order to better meet the requirements of regulators and join forces to more effectively combat money laundering;
    • At the end of May 2019, cooperation with Cred was announced to open a credit service on Binance. Cred allows you to borrow fiat funds against a cryptocurrency pledge, as well as earn money by lending your cryptocurrency to other users;
    • The June partnership with BAM Trading Services allowed the opening of the American division of the exchange - Binance US. Zhao noted that the US site will operate in a fully regulated environment, although BAM Trading Services is licensed to operate only in California;
    • In December 2019, a partnership was announced with Paxful , a peer-to-peer platform for buying Bitcoin (something like LocalBitcoins ). Paxful will provide the Virtual Bitcoin Kiosk service for the exchange, thanks to which Binance users will be able to buy bitcoin for fiat, which again fits into Zhao’s concept of integrating all fiat currencies. Among the first 10 currencies will be the ruble, the British pound, the Canadian dollar, the euro and others. In general, it is planned to work with the currencies of 167 countries;
    • A little later it became known about cooperation with POLi Payments - an Australian payment service. Due to this, the inhabitants of Australia will now be able to buy cryptocurrency through online transfers;
    • At the beginning of 2020, the exchange began negotiations on a strategic partnership with Z Corporation Inc. - a division of Softbank holding that owns 60% of Yahoo! Japan;
    • In March 2020, a partnership was signed with Brave . Due to Binance, the developers plan to integrate the cryptocurrency exchange and purchase service into the browser;
    • In the same month, a direct bank gateway was opened with a Turkish bank Akbank . Thanks to this collaboration, users were able to freely deposit and withdraw Turkish lira from the platform.

    Binance: Google from cryptocurrencies?

    Команда Binance
    The Binance Team

    Now, review the Binance acquisitions and partnerships over the past year. It seems that the development directions for the next few years are clearly being drawn:

    • Expansion to Asian markets and maintaining positions in Europe after introduction of 5AMLD ;
    • Full integration with fiat in all possible countries;
    • Start of development in the field of dApps;
    • The development of over-the-counter and derivatives trading.

    And the partnership with Cred makes us think that Binance intends to integrate DeFi services as well. And for all this, a powerful analytical base from CipherTrace, CoinMarketCap and DappReview has already been created.

    If cryptocurrency exchanges are read a bridge between digital and fiat currencies, Binance is building a real world-wide Hong Kong-Zhuhai-Macao. Moreover, this bridge will be able to work in both directions - you can buy a stablecoin for a dollar, transfer a stablecoin to a friend, and he will withdraw it to the lyre and all this with minimal participation of banks. And this is just the beginning.

    Binance turns into a kind of super-monster, consisting of several smaller monsters, and now it includes a blockchain platform, an exchange, an analogue of Bakkt , a multi-currency wallet, a debit card and its own currency.

    In the future, DeFi, own analytics services, payment (and not only) applications may be added to it. And this is provided that this monster does not begin to master other areas of activity in the near future, but it will most likely begin.

    Read also:

    Millions of dollars in seconds: projects after IEO on the Binance Launchpad

    Binance Chain: full review blockchain that could become the “Ethereum killer”

    Binance DEX - the most detailed review of the decentralized exchange

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