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Binance Does It Again: Passes Deutsche Bank Quarterly Profits, Continues Leading With Token-based Exchange Model
At the end of last year, I wrote an article entitled Binance Exchange: Fueling a Hot New Era of Token-based Exchange Models?, diving into the innovative token-based exchange model Binance brought to the competitive table. Unarguably, their business model along with being at the right place and time has catapulted them to being the top cryptocurrency exchange in the world — 7-months after starting the business.
This is unheard of in the world of business. A startup becoming the all hailed unicorn within MONTHS. Unicorn = billion dollar valuation. I don’t know what Binance’s valuation is or if we can even value the organization from a traditional valuation standpoint; however, their 24-hour volume as I type this is $3.9 billion. They charge a 0.10% trading fee — we’ll do the math further down.
This comes after Binance has reportedly surpassed Deutsche Bank in quarterly profits just 8-months after launching.From our friends at CryptoSlate,
They continue, citing that Binance also has under 200 employees while the 148-year old Deutsche Bank has over 97,000 employees. I don’t know about you, but this seems to be the act of superior efficient systems over inefficient systems. Binance quarterly profits are 36% higher and they have 0.2% the employees that DB has. Probably way less commitments to expensive office building leases too.
‘Crypto Dust’ Simple Convert to Binance’s BNB Coin
They did it again. Binance released a function that allows us to deal with the age old ‘crypto dust’ problem. If you don’t know already, using Binance’s BNB coin to pay fees on their exchange grants the user a 50% discount on trading fees. Now we can easily convert our micro-fragments of cryptocurrency directly into Binance’s BNB coin through using the “Convert to BNB” button as seen in the picture above.
As you can see from the screenshot above, I was able to select the coins I was interested in converting to BNB and was easily able to convert less that $0.45 BTC worth of altcoins into BNB. At 0.00063891 BNB for the conversion fee, it only cost $0.0091747476 worth of BNB. Not sure about you, but the 2% conversion fee on this transaction seems worth it considering it is a small price to pay for efficiently converting 100+ tokens into BNB. I bet the percentage charged goes down as the amount of BNB being converted goes up too, but cannot confirm that yet.
BNB, Binance’s Native Currency Utility & Model
Binance charges a 0.1% trading fee on all trades, but provides traders using the exchange a 50% discount on fees when using the native BNB token to pay fees with. That’s one aspect of their innovative token model — put the token at the center of the ecosystem as the native currency and provide discounts when using the native ecosystem currency to make payments. Genius. Why hadn’t any of the old crypto exchanges thought of this before Binance?!
Earlier we mentioned Binance surpassing DB in quarterly profit. Below are Binance’s revenue for the aforementioned $3.9 billion 24-hour trading volume, today, based on three variable levels of fees collected:
0.05% (50% people using BNB) = $1,950,000
0.075% (25% people using BNB) = $2,925,000
0.1% (No fees discounted) = $3,900,000
Add in the fact that Binance also has BNB markets with over 50 tokens/coins trading against it. I like to call this “demand slack tightening.”What I mean by this is that each of those markets is taking BNB coins to make the market — to fill the order book. So those BNB are occupied from being used in other areas of the quickly expanding Binance ecosystem, right?
If we look at the other early components of the Binance ecosystem I’ve put into a sales funnel image above, we can see that there are some pretty powerful synergies going on between them. Binance servers both the trader and the entrepreneur while also playing an important infrastructural role within the overarching cryptocurrency market, proactively leading our community to mainstream adoption.
Exchange-to-LaunchPad
They started their journey as an exchange, offering a superior source of liquidity for crypto projects and traders compared to the archaic exchanges operating upon their launch. About 3-months into their trek, Binance initiated their LaunchPad through the breadwallet and Gifto Official Token Sales.
The LaunchPad feature was wildly successful and both projects were very quickly funded. Even examining the first sentence of the project description above, both of these projects may work in synergy with Binance as Binance aims to become a decentralized exchange (DEX).
LaunchPad-to-Binance Labs
The exchange provided easy attraction of capital for the LaunchPadbecause traders were already freely trading cryptocurrency on the exchange — participating in the token sale was not much harder than making a trade on their exchange. Soon after, they launched Binance Labs which is their incubator/accelerator for attracting and seeding projects within their ecosystem. This becomes a lead generation source for Binance to attract innovative projects from their over 7,000,000 user ecosystem.
Binance Labs-to-Info
This may just be their greatest, earlier piece to the entire Binance ecosystem — access to CoinMarketCap-style information. As mentioned earlier, Binance aims to be a decentralized exchange. In order to do this, it is in their best interest to aggregate certain resources as to attract the most traders and innovative projects. I’m making an assumption when I say this, but I think the vast majority of us use CoinMarketCap to stay up-to-date with prices and current events. Building their own version of CoinMarketCap gives greater transparency into their ecosystem while also providing the much needed data for traders and projects.
Binance Labs and Info don’t necessarily create demand for the BNB coin, but they are infrastructural components that will add massive value to the overall ecosystem as it continues to expand in these very early days. Although, I will tell you, I got the feeling that Binance will add a fee to their Info product because their early release mentioned it being “free for now” type thing.
I can imagine Binance implementing a sort of checks-and-balance system between users that provides incentive to users for validating the data on the Info platform. I’m just speculating here, but I would use BNB coins to reward users for validating that data is correct when others within the ecosystem add new project information to the Info platform.
I clicked on Ethereum’s coin profile on the Binance Info platform and the image above popped up on my screen. Notice how the coin profile is more robust than on CoinMarketCap?Here’s a link to Ethereum’s CoinMarketCap profile if you want to compare. This may very well be another utility for the BNB coin as Binance’s early ecosystem continues to expand — data validation or moderation through incentive systems. We wouldn’t want fake news being spread on our community’s largest platform.
Token-based Business Models Are The Way Forward
If we look around us, we can see there are plenty of projects attempting to take on traditional companies with a similar business model except adding a utility token at the center. Call it a Security-utility token, I don’t care — I don’t remember the last time I was able to spend my Apple (AAPL) stock at another business or even to buy a new iPhone.
Look at the Basic Attention Token (BAT) from Brave. The creator of JavaScript and Co-founder of Mozilla and Firefox is using the BAT as a means to challenge the likes of Google and their Chrome browser product, radically changing the way that users, advertisers and creators interact with each other across the internet.
Now, looking at the Brave Browser in a similar futurist lens that we looked at Binance above, can you imagine what would happen if companies began offering 50% off of their product if we users pay in BAT? This is how Binance took market share from Poloniex and Bittrex who were both the dominating cryptocurrency exchanges prior to Binances’ rise. Or imagine another company within Brave’s advertiser ecosystem uses the same BAT referral incentive for referring users to sign-up for their business.
I do not doubt we will see major companies disrupted by the superior, Game Theory-driven use of cryptocurrency tokens within the business model. This will create new, innovative business models that would never have existed without blockchain technology and the public network infrastructure we have today.
Hope you enjoyed this piece — please follow along and make sure to share this article if you did enjoy or find it insightful! Thank you for your support and more to come soon!
Below are some resources for beginning cryptocurrency enthusiasts or others interested in something new:
The links below include affiliate/referral links which help support me as a writer. I do not get paid to write and this is my only means to generating income for writing. Thank you in advance and hope these resources are helpful to you. I only include resources in this list that I have used in the past.
CoinPayments — Receive and make payment via 70+ different cryptocurrencies — the crypto-PayPal.
CoinTracking — Your personal Profit / Loss Portfolio Monitor and Tax Tracker for all Digital Coins or cryptocurrency. Bitcoin, Ethereum, Litecoin, altcoins, etc.
Changelly— the ultimate fiat-cryptocurrency exchange to buy/sell instantly with credit cards, for anybody, anywhere.
HitBTC — great exchange for trading various cryptocurrencies and operational since 2013.
Gate.io— Cryptocurrency exchange listing new coins — get 10% off trading fees if you register with this link.
LinkCoin — Your ticket to using LinkCoin, Bibox, and Bibox365 exchange products and ICO’s — mainly Asian cryptocurrencies that are not available on other exchanges.
CEX.io— Buy Bitcoin w/ credit card, ACH bank transfer, SEPA transfer, cash, or AstroPay. Credit purchases are instant.
CoinMama- purchase Bitcoin and Ethereum w/ credit/debit cards & using cash through WesternUnion on their platform. Best for Euro purchases.
Cryptocurrency Resource Telegram Channel — Telegram channel dedicated to providing beginners or experienced cryptocurrency traders with alternative resource options. Exchanges, hardware wallets, tax resources, etc.
Ledger Nano S — multi-cryptocurrency cold hardware wallet supporting Bitcoin forks. Keep your coins safe and offline. Cold storage.
Kucoin Exchange— Binance’s ‘little brother.’ Very similar with trading competitions and whatnot. Revenue share token as well!
Exmo Exchange — just launched their own coin and adding robust features to the trading platform.
Binance— the up-and-coming cryptocurrency exchange that has truly entered as a leader among exchanges. Tons of benefits, a trader’s must-see.
CoinMate— great Bitcoin Exchange for those who reside in Europe, the EU and surrounding area. Very easy to understand.
Huobi Exchange— newer Asian-based exchange, many new tokens.
InvestFeed— Follow along on InvestFeed to get the best cryptocurrency project news. The go-to social platform for crypto enthusiasts.
NonFungible.com— CryptoKitties, CryptoPunks, Etherbots, Etheremon, Decentraland land marketplace sales and more CryptoCollectible Non-fungible token (NFT) price history.
I am the author of this piece of content and the original can be found on my Medium blog here . Hello! As you may have heard, NEO Blockchain has been considered the ‘Chinese Ethereum’ for about a year now since the project re-branded from Antshares. This is because NEO will perform similar functions as Ethereum does as a platform for decentralized applications with smart contract capabilities, among other tech integrations. NEO’s NEP-5 token standard is synonymous to Ethereum’s ERC-20 token standard in terms of what they mean to the individual networks. Since the inception of ERC-20, there have been over 85,000 tokens created on the Ethereum blockchain network , just under that particular standard. This is a major focus in NEO’s growth strategy, but instead of taking Ethereum’s radically decentralized approach, NEO grows stronger with regulatory compliance standards — meaning, NEO is poised for institutional capital to flow into the network as they continue buil
Image Source Virtual reality continues to be a hot topic in the world of tech as more startups are formed and new technologies see the early days of VR integration. Those of us operating on a day-to-day basis in the cryptocurrency community understand the power of blockchain tech while exhibiting an explosion of startups leveraging VR to raise capital via initial coin offering. However, nothing quite measures up to the uniquely creative virtual platform that Decentraland has become along with other innovative projects like CryptoKitties. Digital objects now gain an identity through blockchain and other technologies integrating with virtual reality will allow for a deeper immersive experience. One example of a technology which will be able to integrate with VR are projects utilizing the Non-fungible Token (NFT) standard, ERC-721, which is turning out to be quite an interesting development. CryptoKitties is an example of a Non-fungible Token based on ERC-721 token standard
This post was originally published on my Medium blog on January 28th, 2018 and can be found here . I hope you enjoy and find this helpful! Source: BlockchainHub Looking at the history of Initial Coin Offerings above from BlockchainHub , we can see that they have raised quite a bit of capital over time — specially in 2017. Since then, 100’s of ICO’s have popped up claiming to create innovative technology while many of them have turned out to be scams. At the same time, there are hundreds of great projects that are not scams and actually building new technology . In this example, I’ll use Blocklancer’s live ICO as an example of minimum , baseline Due Diligence for ICO investing . This piece will quickly dive into the following steps in my minimum due diligence process — the process becomes more detailed with higher amounts of capital invested: - Business Plan, White Paper and/or Strategic Outline (Industry/Market Problems with Proposed Solutions) - Token utility
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