The CoinDesk 50: Binance Eyes the Whole Pie

Binance, #1 on the new CoinDesk 50 list, continues to move aggressively after the biggest opportunities in crypto.

May 7, 2020 at 1:15 p.m. UTC
Updated Sep 14, 2021 at 8:38 a.m. UTC
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“It’s about the users.”

That’s what Binance CEO Changpeng “CZ” Zhao said in a recent CoinDesk interview following his acquisition of well-known crypto data site CoinMarketCap for a reported $400 million. 

Launched in 2017, Binance has established itself as a juggernaut atop the crypto heap, becoming the dominant exchange by daily trading volume and running headlong into decentralized exchange (DEX) services, initial exchange offerings (IEOs) and over-the-counter (OTC) trading.

This post is part of the CoinDesk 50, an annual selection of the most innovative and consequential projects in the blockchain industry. See the full list here.

The firm’s aggressive market moves have hardly shown signs of exhaustion either. As one CoinDesk source put it in early April, the firm is “flush with cash” even after closing nine M&A deals in 2019 alone.

Moreover, these acquisitions have only furthered Binance’s internal goal since Q4 2019: Bolstering its derivatives offering – catnip for seasoned crypto investors.

“It is still the company’s top priority in terms of the resource allocation,” Aaron Gong, Binance’s VP of futures, told CoinDesk in a recent interview.

CoinDesk - Unknown

Binance CEO Changpeng Zhao

Binance entered the derivative game by buying the JEX exchange in September. The futures market leads in volume after only seven months of operation and now sits in contention with perennial favorites like BitMEX for most open interest, a measurement of the aggregate open long and short positions on a market.

Gong said the Binance team expected to lead trading volume in as little as 12 to 16 months after launching. Market conditions, specifically March 12’s “Black Thursday” crash, would see the timetable moved forward considerably. BitMEX suffered a distributed denial of service (DDOS) attack on that date – twice – forcing Arthur Hayes’ firm to briefly turn off its servers on what was the busiest trading day of the year.

Gong said BitMEX’s failure was Binance’s boon. The exchange shortly surpassed all others for most daily trade volume, according to data provider Skew.

“When we had huge market movements, we often heard issues from other exchanges in terms of system overloads,” Gong said. “But over the course of our entire first six months, we didn't have any issues.”

Binance’s ability to somersault into the derivatives market leaderboard doesn’t mean it has lost focus on retail users and its self-proclaimed desire to “exchange the world.” Rather, Binance is spreading its bets on various parts of the crypto economy and seeing what sticks.

If the CoinMarketCap deal was seen as Binance’s attempt to capture data-hungry newbies, other investments show the multifaceted spread of the firm’s tentacles. A joint effort with peer-to-peer exchange Paxful suggests fiat-stablecoin aspirations. A strategic investment in upstart FTX represented another bet on crypto derivatives.

Of course, only time will tell which bets will pay off and which won’t. Said Gong: “We want to bring long-term growth and improvement to the entire industry instead of just focusing on short-term goals.”

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