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January 20, 2022
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CZ’s FAQ 6 – What Makes Binance Successful

This article is part of the “CZ’s FAQs” sequence. Opinions expressed listed here are private opinions and don’t symbolize Binance’s official place. It shouldn’t be monetary recommendation. And could possibly be completely incorrect. 

Now Covid is somewhat bit in retreat, I’m in a position to get out extra and meet individuals face-to-face, which I like to do.  I get requested many questions, however one of many well mannered questions individuals usually ask me throughout a dialog is what makes Binance so profitable?

Of course, there’s a lot to unpack, so I wrote it down.

Let’s begin with getting a couple of widespread misconceptions out of the way in which.

“You grow big by being crazy or the wild west.” I hear this so much, however nothing could be farther from the reality. 

When you might be about to deposit your laborious-earned cash with an alternate, the very last thing you need is a loopy platform, proper? What do you do? You analysis and discover an alternate that different individuals (and your self) can belief. Being trusted by customers is the perfect and solely technique to develop.

Other overly simplistic views embody “you grow big because of X”, normally only one factor. While that one factor in all probability contributed to the expansion, there are normally many different elements as properly. There isn’t any single magic capsule for fulfillment. Even on this article, I’ll solely be capable to allude to a small variety of our success elements.

For one thing to succeed, you should do 1000 issues comparatively properly, then plus a number of luck. For one thing to fail, you simply must do one factor poorly, even after you probably did the opposite 1000 issues comparatively properly.

Having stated that, the world shouldn’t be that difficult. I imagine the 1000 issues could be largely grouped into three classes: Users, Service, Product.  While these aren’t distinctive to Binance, they definitely add as much as our USP.

First, values.

Protecting Users

Most platforms say they shield customers. But values aren’t one thing you say, it’s one thing you do. Users are good. They determine it out. So, let’s begin with a couple of examples of what did Binance do (that others didn’t)?

After elevating about $15m USD equal in an ICO in Shanghai, Binance launched on July 14, 2017. A mere month and a half later, on Sept 4th, 2017, the Chinese authorities introduced no extra crypto exchanges or ICOs allowed in China, and additional initiatives that did ICOs should return the initially invested quantity to customers. Luckily, BNB stood at 600% of its ICO price. No one wished to return six {dollars} for one greenback again. However, Binance did facilitate 4 different ICOs on our platform, and all 4 had been under their ICO price. 

Those venture groups didn’t have sufficient reserves to make their customers complete. Our staff did some calculations. The hole was about $6m USD. We had a fast staff name. I used to be on a transferring prepare. Within 10 minutes, all of us agreed that Binance would use its personal money reserves to make our customers complete, even for these different initiatives. 

To today, this represents the only largest proportion-smart spending for Binance. It was greater than 40% of all our money reserves. We are an eight-week-outdated startup. Not worthwhile, burning cash quick, hiring, and rising. It was expensive, however we held to our ethos of defending customers. No different alternate had ever finished that earlier than (or after, to the perfect of my information). As quickly as we introduced it, we obtained overwhelmingly constructive suggestions from the group. Users flocked to us. We protected customers to get customers.

Second instance. Through our stability reconciliations, we discovered we obtained additional GAS tokens in our pockets. We had been apprehensive. Is there a bug someplace? After some thorough checking, we realized that in the event you maintain NEO in your pockets, it generates GAS, which is one other token that additionally has worth. At the time, in the event you maintain your NEO on an alternate, none of them provides you the GAS tokens it generates, till Binance. We stated, let’s calculate the NEO holdings of customers every day, after which distribute the GAS tokens that had been generated, and provides it again to them. It’s not our cash, it’s our customers. Guess what? Most NEO customers moved their funds to Binance.

In the identical vein, Binance was the primary platform to help alternate-primarily based airdrops and forks. Before that, you needed to withdraw your coins again to your personal pockets, look ahead to the airdrop or fork to occur, after which get the second coin earlier than you deposit your coins again to an alternate. At Binance, we stated, we are going to prevent all that bother. We will deal with the fork or airdrops and simply credit score it to your account. Not solely did this save bother for some, nevertheless it additionally allowed many non-tech savvy customers to take pleasure in airdrops and forks. This retained customers so properly that different exchanges copied us shortly afterwards, making the trade extra shopper safety oriented.

There are many many extra examples. Binance is the primary alternate to assist customers retrieve non-supported tokens they despatched by mistake (which is a really costly operation to do effort-smart). Binance helps customers to track funds even after they don’t use Binance alternate equivalent to DeFi. And most not too long ago, Binance covered user losses as a result of technical glitches at an information middle. The checklist goes on and on. But you get the purpose. Protecting customers prices cash, however it’s the easiest way to draw and retain customers. We encourage different exchanges to do it as properly.

Service

Once you’ve attracted customers to your corporation, it’s a must to retain them, and I imagine that Service is the best retention instrument

Before Binance, in the event you submitted a help ticket on an alternate, you’ll be fortunate to get a response in two weeks. A two-month ready interval shouldn’t be unusual. And that is whereas your cash (bitcoin or different cryptos) could also be caught on a withdrawal or comparable. For Binance, we got down to change that. We stated, most 24 hours response time. Ideally inside an hour. Guess what? Our customers cherished it and flocked to us. Then the trade was compelled to comply with, so we prefer to suppose we helped to enhance the service requirements within the crypto trade.

Today, Binance help dwell chats and may normally get to a primary response inside minutes, in a minimum of 12 languages. Still, much more to cowl, and we’re engaged on that.

In addition to serving to customers with Binance, our helpdesk additionally helps customers with non Binance associated points, to the extent we will.

Binance is the primary alternate to assist customers get well coins they despatched by mistake. This is operationally a really costly activity, when it comes to man-hours that must be finished on the alternate aspect. It usually includes extracting a non-public key out of a safe setting and performing some customized operations on it. Very time-consuming, however it’s well worth the funding for us.

Even for DeFi rug pulls on Ethereum, Binance will help track the funds for users, even when they don’t circulate to Binance. This implies that generally individuals write headlines – like Squid Coin rug pull on Binance, even when we weren’t concerned. This can damage our status, however we do it for the customers which were affected.

Even when customers get SIM swap hacked, Binance’s staff was in a position to assist customers safeguard their crypto in lots of cases.

The checklist goes on and on. Not each consumer is aware of every little thing, however the little bits they know provides up.

Product

When we had been about to begin Binance, many individuals informed me “don’t do an exchange, it’s done to death, the market is saturated, you won’t replace the existing players…” the checklist goes on.

But after we seemed on the market, we thought there may be a number of room for enchancment.

Basic issues, again in 2017, most exchanges supplied a “novice interface”. You needed to scroll as much as see the chart (a really primary one at that normally) and scroll down to position orders. Given our expertise within the buying and selling world, this isn’t how merchants commerce. We thought we might do higher. So, Binance designed two variations of the only-web page buying and selling display. Everything you want on one display, charts, order e-book, orders, click on to commerce, and so on, multi function place. Both designs had been copied extensively by different gamers within the trade afterwards.

Speed. Performance is a product characteristic. Binance’s matching is quicker than different exchanges, even at present. When you place orders on Binance, you possibly can discover a quicker response even simply by the human eye. When it involves API efficiency, Binance’s APIs are the quickest and most secure within the trade.

Coins. The crypto exchanges that existed in 2017 had been largely “bitcoin exchanges”. They centered on changing native fiat forex into bitcoin. Even some main exchanges didn’t checklist ETH. Very few exchanges listed greater than a dozen coins. And ICOs had been all the trend in 2017. Many new coins had been created. People wished entry to them. There had been only a few liquid marketplaces for them. Binance supported many coins and crammed that demand.

Fees. Binance fees 10x decrease charges than different exchanges after we began. Today, we’re nonetheless the bottom price alternate on this planet. Many different exchanges spend much more cash on advertising and marketing. They entice new clients, however finally, these new customers be taught and are available to us.

International. There had been two giant exchanges supporting a good variety of coins in 2017, Poloniex and Bittrex. Both had been ranked excessive in buying and selling quantity after we began in 2017. When we seemed on the two exchanges, they had been extremely catered in the direction of US customers. They solely supplied an English interface, no different languages had been supported. Both corporations had been primarily based within the US. We wished to serve the remainder of the world. Binance supported 9 languages throughout the first month and expanded to 31 languages at present. Our Customer Support helps 12 languages at present, excess of another platform. 

Conclusion

In abstract, there isn’t any secret sauce to constructing a profitable alternate. You must abide by your values, construct a great product and repair your customers. To that finish, I need to thank all the Binance staff, together with Binance Angels for his or her laborious work, dedication, and contributions they’ve made. Lastly, we’re in no way excellent. We strive very laborious to abide by our values and are consistently bettering our services. Please don’t hesitate to provide us your suggestions. And we thanks to your unwavering help and your organization in our journey in the direction of a world with higher cash.

CZ

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