No one can ignore the explosive growth of blockchain asset trading platform Binance.
Its success is intertwined with the current chaos in the Bitcoin ecosystem, and its founders seized the opportunity amid this turbulence to turn success into a foregone conclusion.
The Rise of Binance
Tron chose Binance for its ICO.
On August 22, 2017, Tron founder Justin Sun and Binance co-founder He Yi hosted a live stream discussing the Tron project. At noon that day, during the broadcast, they launched a flash sale for Tron tokens.
53 seconds—that’s all it took for 500 million TRX tokens to sell out. Media outlets declared Tron the most successful ICO project of the second half of 2017.
Binance continued fueling hype for the project. On December 19, 2017, it launched another marketing campaign—users who ranked in the top two for cumulative TRX trading volume (buying + selling) within a week would win a Maserati and a Mercedes, while others could receive prizes like iPhone Xs.
The day before this campaign, December 18, 2017, Binance became the world’s largest Bitcoin trading platform by daily trading volume. Launched on July 14, 2017, this blockchain-based digital currency exchange built the world’s largest crypto trading platform in just six months, hailed by industry insiders as a "commercial miracle."
He Yi, Binance’s vice president and dubbed the "First Sister of Crypto," leveraged her experience in live-streaming marketing to drive Binance’s growth—with remarkable results.
Marketing Tactics
Before co-founding Binance, He Yi was instrumental in launching the popular live-streaming platform Yizhibo. A common tactic among live-stream hosts was hosting surprise giveaways—typically new iPhones—to retain viewers. In late 2017, one host on Panda TV even raffled off an Audi A6.
Binance didn’t just use live streams to promote projects—it also gave away luxury cars. On January 9, 2018, to promote the VEN token, He Yi and her team hosted a global live-stream across platforms like Yizhibo, Uplive, and YouTube, distributing cash prizes. Users who traded at least 1 BTC on Binance could participate, with 60 winners receiving 5,000 VEN (worth $10,000) and one winner driving off in a BMW i8.
Following the Tron campaign, Binance gave away Porsches, Mercedes, and Lamborghinis in various promotions.
These lavish tactics worked: After surpassing $3 billion in daily trading volume** on December 18, 2017, Binance hit **$10 billion by January 10, 2018.
Exponential Growth
By January 17, 2018, Binance had 6 million registered users, with roughly 250,000 new users signing up daily. For context, Coinbase saw 100,000 daily registrations, while Kraken had 50,000.
The surge was so overwhelming that Binance temporarily halted new user registrations on January 8, switching to limited, sporadic registration windows.
As an exchange, Binance supports BTC, ETH, LTC, and over 240 trading pairs. Industry sources reveal that projects now queue up to list on Binance.
Binance Coin (BNB)
Binance also issues its own blockchain product—BNB. Based on Ethereum, BNB functions similarly, serving as both a currency and a trading platform. Users can trade BNB for other tokens, making it a liquidity tool.
BNB has a fixed supply of 200 million tokens, with only 100 million publicly available. To boost adoption, Binance offers discounted transaction fees for users paying in BNB, starting with a 50% discount in the first year and tapering over five years.
To sustain BNB’s value, Binance employs a buyback-and-burn strategy: Each quarter, it uses 20% of profits to repurchase and destroy BNB until 100 million tokens are eliminated.
On October 18, 2017, Binance burned 980,000 BNB, worth over $1 million**. By **January 11, 2018**, BNB’s price surged from **$1 to $19.24**, ranking **29th globally** with a market cap of **$1.876 billion.
Revenue Insights
Binance charges a 0.1% transaction fee, with discounts for BNB holders. With daily volumes hitting $40 billion**, analysts estimated Binance earned **$40 million daily in fees—outpacing the Shanghai and Shenzhen stock exchanges combined, which netted $3.675 million daily.
The Team Behind Binance
Rewind to July 2017: He Yi and CZ (Changpeng Zhao) reunited in crypto.
He Yi, a crypto industry veteran, announced her departure from Yizhibo on August 8, 2017, joining Binance as CMO, Co-Founder, and Board Member.
CZ, Binance’s CEO, is a Canadian-Chinese tech executive who previously served as CTO at OKCoin. After a public fallout with OKCoin in 2015, he left and later teamed up with He Yi to launch Binance.
Their combined expertise—CZ’s technical prowess and He Yi’s marketing genius—propelled Binance’s success.
Funding and Expansion
On September 1, 2017, Binance secured a multi-million-dollar angel investment from Fancheng Capital and Blackhole Capital, founded by Chen Weixing (co-founder of Kuaidi Dache). This funding fortified Binance during the September 2017 market crash.
Regulatory Challenges and Opportunities
Binance’s rise coincided with China’s crypto crackdown. On September 4, 2017, Chinese authorities banned ICOs and shut down domestic exchanges, triggering a mass exodus.
While competitors like BTC China and OKCoin collapsed, Binance proactively adapted:
- Blocked Chinese IPs to comply with regulations.
- Relocated to Japan, taking key team members (and their families).
- Focused on international crypto-to-crypto trading, sidestepping fiat currency restrictions.
By January 2018, Binance reported that only 3% of its users were Chinese, declaring: "We’re no longer concerned with domestic policies."
Industry Impact
Post-crackdown, Binance became the go-to platform for projects seeking listings. One blockchain team admitted: "Before the crackdown, Binance was second-tier. Now, we beg them to list our tokens."
Yet Binance remains selective, prioritizing quality projects over speculative schemes.
Stability and Scalability
Beyond marketing and timing, Binance’s technical reliability earned industry trust. To handle surging traffic, Binance reportedly acquired CryptoWorld.com for $195,000 to build a secondary trading platform.
Conclusion
Binance’s story epitomizes the disruptive power of decentralized assets. In six months, it surpassed traditional exchanges through:
- Strategic vision (global focus, no fiat).
- Aggressive marketing (giveaways, live streams).
- Regulatory agility (swift relocation, compliance).
- Technical excellence (stable infrastructure).
A masterclass in navigating crypto’s wild west.
FAQ
1. How did Binance grow so quickly?
Binance leveraged live-stream marketing, aggressive giveaways, and a crypto-only model to attract global users while competitors struggled with regulations.
2. What is Binance Coin (BNB) used for?
BNB reduces trading fees on Binance and can be traded for other tokens. Its value is sustained by Binance’s quarterly buyback-and-burn program.
3. Why did Binance leave China?
After China’s 2017 crypto ban, Binance relocated to Japan to avoid regulatory risks and focus on international markets.