Binance has just burned 1,821,586 BNB. If you don’t understand why we did this or think we are just plain crazy, please read our whitepaper. As I have been less vocal in our public groups recently, I would like to take this opportunity to share some random thoughts again.

Fees

Our trading fee is not the 0.1% as advertised. Realistically, it is far lower. If you pay fees with BNB, you get a 50% discount. If you were referred by a friend, your friend gets another 20% (previously 50%) of the remaining fee. Thus, our effective trading fee is around 0.03%, whereas the industry standard looks to be around 0.25%.

Calculations

Price fluctuations complicate the calculations. BNB price was lower at the beginning of the quarter. If you were to convert our revenue to fiat using those rates, it would have been lower. When we do calculations, we just count how many coins we have and convert to the target currency using current price, and we reach a simple answer. The point is though, if we do the same calculation again an hour later, using new current prices, we will get a different result.

Expenses

Our expenses are also increasing at a rapid pace and incurred at different times. Looking at the beginning of the quarter when we had to sell some BNB/BTC to pay for things, those are very high costs by today’s prices. But you can’t look at things that way, it was what the price was at the time.

Growth

In a nutshell, last quarter was all about growth. Just phenomenal growth in every aspect, from the number of traders, volume traded, servers and bandwidth usage (expenses), support requests and issues.

Some interesting stats:

Over 10B USD worth of cryptos changed hands on Binance in one day at the peak, averaging $110,000 USD / second.

Binance’s matching engine handled 3.5 billion requests that day, or roughly 40,000 requests per second.

Binance receives more than 25,000 support requests (tickets) every day, with a 20 agent support team, that means each agent can only spend 20 seconds or less on each ticket. Unfortunately, as a result, we have a backlog.

Chinese account for only 3.3% of our total user base, according to Alexa.

BNB token increased 220x from its initial value 6 months ago, outperforming even BTC by about 30x, during the highest growth period of BTC in history.

What’s the Secret to Our Growth?

This is the 2nd most frequently asked question I get. Sorry to disappoint you, but the secret sauce is: “there is no secret sauce”. It’s a combination of hard work and luck. We have a severely sleep-deprived team that works day and night to improve products, run creative marketing campaigns, and solve the increasing number of support tickets. I believe hard work creates luck. We also have a large number of dedicated Binance Angels watching over us and taking care of our communities. They don’t get paid, they volunteer their time and effort, just to contribute to something they believe in. I am happy to announce two of our angels became full-time employees this quarter. This is something we will continue to do. Welcome to the (sleep-deprived) team, guys!

Issues

With this tremendous growth, we are facing many issues. While our matching engine is keeping up pretty well, other parts of the platform are under severe stress. Popular blockchains are often congested, causing unexpected issues with deposits and withdraws. Most wallets can’t handle the number of addresses or transactions we are dealing with. Our support team can’t grow at the exponential pace as our users do, resulting in a slower response to users and a temporary increase in dissatisfaction. Rest assured, we are working hard to address all of the above issues.

Security

Externally, we have seen an increase in hacking, phishing and fraud attempts. We worked closely with US Department of Homeland Security on the EtherDelta hacking case, and locked a large part of the stolen funds that were sent to Binance addresses. We also worked with other law enforcement agencies on other cases. We will lock stolen funds that are sent to Binance on first notice. We wish hackers would stop sending stolen funds to Binance addresses. It will save them a lot of money, and us a lot of work.

We also worked closely with NetCraft to shut down a large number of phishing sites. We have written many articles educating people about security. We will continue to increase our efforts in this area.

Competition

At the beginning of the quarter, I received many questions about competition, “hey CZ, this other group said they will do an exchange, just like yours, are you worried?” I get it less often nowadays, for whatever reason.

Here is my view on it. We are at the beginning of a new industry, new landscape, new era. There are far more unexplored territories than anyone of us can cover. Many countries don’t have a crypto exchange at all. In fact, most countries don’t have one. There is more to collaborate between exchanges than there is to compete. We need to work together to develop the industry further, improve infrastructure, security, compliance, and service. Binance welcomes other exchanges, DEX, etc. We listed no less than 5 DEX projects on our exchange, we want them to grow, and to help grow the industry.

Many new exchanges have copied our model. We love it. Nothing is more reassuring than someone else copying our business model, our coin model, or even down to the last details of our product interfaces. No need to worry, there are some things they can’t copy, our backend architecture, our team and our culture! These copycats help us in many ways. Some of their coins often reach or surpass BNB market cap at times, even with 100x less trading volume on their exchange. What does that do to the BNB price? Up! Thanks guys.

Expanding BNB Utility

In the last quarter, we have added more uses for BNB. You can now use BNB to buy virtual gifts on Gifto (GTO), a live video streaming platform with more than 20,000,000 users. BNB will also be an accepted payment token in the Monaco (MCO) ecosystem. We will be adding more of these type of uses in the future.

In fact, if you wish to list your coin on Binance, proposing a well thought out integration of BNB into your app/ecosystem will significantly increase your chances of being reviewed first.

Listing on Binance

Now to the question I get asked most often: “How do I list a coin on Binance.com?”. The process is simple. The Founder or CEO of the coin project team should submit the Binance Listing Form (google it). Our review team will review it. IF the application passes the review, someone from Binance will be in touch. It’s that simple.

A couple of points. After filtering, more than 1000 coins are waiting for listing at the moment, and the queue is growing longer by the minute. We want direct contact with the CEO or Founder - a decision maker. We don’t want to waste time. Also, if there ever was a fork in your blockchain, a bug in your wallet, we want a direct communication route to the top. If your CEO is too busy to talk to Binance, then we have plenty of other coins to list.

Lastly, I wish this question to become the least asked question going forward. Please don’t approach me and say “hey CZ, can I talk to you about listing my project?” I only look at projects after our team reviews them. I don’t have the time to listen to 1000 project pitches, which will take three years full time, doing nothing else.

Service

Where do I want to spend my time? Service. Next quarter will be all about service. I may not necessarily be responding to your message “hey, can you look at ticket 123456 for me?”. I can’t do that for 5 million users. It won’t scale. But I will be spending a significant portion of my time building up our service, team, process, and quality. Please bear with us during the recent temporary delay in response time. It will improve.

Once again, thank you for all your support in Binance, and Happy New Year!

Changpeng Zhao

Binance CEO



