Binance Business Model – How Binance

Works and Makes Money


Both new and experienced cryptocurrency users may find it difficult to choose
the best crypto exchange or trading platform at the moment due to the
abundance of options in the digital currency exchange market. Although there
are several cryptocurrency trading and exchange platforms, Binance has carved
out a special place for itself in the industry. So what do you believe may cause
Binance’s rapid expansion? It’s a business model, correct? In this blog post, let’s
discuss the Binance business model and its other building blocks.

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Highlights
The well-known cryptocurrency exchange Binance was founded in China but
later relocated its headquarters to the E.U. ‘s crypto-friendly Island of Malta. One
of the biggest cryptocurrency exchanges in the world, Binance handled $7.7
trillion in cryptocurrency trades in 2021. Changpeng Zhao, who formerly served
as the CTO of Okcoin and Blockchain.info, launched it in 2017.

It is the oldest and most reliable trading platform in use today. They offer a
wide variety of payment choices and all trading options. They permit trading in
all major world currencies, including USD, GBP, and others. To aid users in
trading properly and without being discouraged, they include all the big
cryptocurrencies with the recently emerged ones.

This cryptocurrency platform has developed from a very small cryptocurrency

exchange into a titan in the industry. Binance quickly eclipsed early leaders in
the cryptocurrency trading sector like Coinbase, Kraken, and others due to the
diversity of its offerings. As a result, it currently holds the top rank among
cryptocurrency exchanges regarding users, trading volume, and the variety of
trading pairs available.

This article explains everything you need to know about binance business
model and revenue stream in case you’ve ever wondered if all the excitement
around it is justified. If you want to know everything about it, have a look at its
business model and other operations.

What is Binance?
Through an initial coin offering of the platform’s native cryptocurrency, the
Binance coin, Changpeng Zhao created Binance in 2017. (BNB). His public
auction was an immediate success, helping him to raise more than $15 million.
Such a large initial investment for a new cryptocurrency exchange!

The startup launched the Binance – cryptocurrency trading platform quite

quickly. With the highest trading volumes, Binance became the biggest
cryptocurrency exchange in the world in less than a year. Moreover, with a vast
selection of well-liked cryptocurrency trading pairs and extremely low trading
fees, it was utterly dominating the competition.

 You can utilize Trust Wallet, a third-party “wallet,” to store your digital
currency.
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 Visit the Binance Academy, a knowledge base covering trade, blockchain
technology, fusion systems, and the advantages and disadvantages of
competing cryptocurrencies.

 Binance, a non-profit organization called Charity, enables traders to

contribute to a variety of charities and causes.

 Like an encyclopedia, Binance Info expands on the information.

 Binance levies trading commissions, just like every other exchange. Fee
reductions may be available to traders who work more frequently.

Binance Overview

Launch Date September 2017

Headquarters Cayman Islands

People Changpeng Zhao (CEO, founder)

Business Type Private

Industry Cryptocurrency

That’s Binance in a nutshell. People actively taking a keen interest in the

cryptocurrency market might have heard the term Binance. U.S. What is it?
Let’s understand the term in our next section.

What is Binance.US?
If you live in the USA, the Binance trading platform is not accessible to you. U.S.
citizens must switch to a different platform, binance.us, in order to abide by
legislation. It is believed that this trading platform, which debuted in 2019 to
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serve U.S. nationals, is a scaled-down counterpart of the main Binance
cryptocurrency exchange.

On Binance.US, there are fewer coins accessible than on the original exchange.
However, the most well-known ones, such as Bitcoin, Ethereum, Bitcoin Cash,
and Dogecoin, among dozens of others, are still available.

Even worse, not all U.S. citizens are eligible to open a Binance account. U.S.
account. The exchanges’ services are not available to users in

 Connecticut,

 Hawaii,

 Idaho,

 Louisiana,

 New York,

 Texas, or Vermont.

Therefore, Binance might not be your best option for cryptocurrency trading if
you reside in the USA.

History of the Popular Crypto Platform, Binance

Changpeng Zhao and Yi He established Binance in 2017, which has its
headquarters in Valletta, Malta. C.Z. serves as the company’s CEO.

When Zhao first encountered Bitcoin in 2013, he played poker and ran into a
venture capitalist. Even for a seasoned engineer like Zhao, joining
Blockchain.info as the third-ever member of their Wallet team was a hazardous
move.

After working for Blockchain.info for eight months, C.Z. accepted a position as a
chief technical officer at Okcoin, an exchange for spot transactions involving
fiat money and digital assets. However, Zhao’s obsession with cryptocurrencies
led him to sell his Shanghai residence for $1 million in 2014 and put every
penny of the proceeds into Bitcoin (at a price of $600 per coin).

The ICO for Binance was a complete success. The C.Z. team created a white
paper in just 16 days, and on July 1st, 2017, they launched their initial coin
offering. The outcome was raising $15 million equivalent in cryptocurrencies,
20,000 user signups, and a tonne of P.R.
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Binance was immediately off to the races after that. After just a little over six
months in operation, Binance has accumulated over six million users, making it
the largest cryptocurrency exchange in the world at the beginning of 2018.

Binance announced opening its $1 billion venture fund in June 2018, following a
steady price increase for its BNB token. The fund will promote blockchain and
cryptocurrency entrepreneurs. Allotted startups would get the money through
its BNB token.

But the introduction of fiat currency conversions and the following addition of
other payment alternatives was what really helped Binance soar to new heights
(such as debit or credit card).

Additionally, Binance has a reputation for quickly adding new cryptocurrency

projects to its exchange.

Even though Bitcoin lost 70% of its value in 2018 (and exchange activity
positively correlates with trading volumes), Binance still made $446 million in
earnings year despite having just been founded 18 months earlier!

In addition, Binance debuted loans (in August), futures trading (in June), and
margin trading that year (September). Certainly, 2020 wasn’t any less
prosperous.

As a result of the coronavirus pandemic’s stay-at-home directives, an increasing

number of people rushed to online trading and bitcoins in particular. Utilizing
that upswing, Binance made its largest-ever acquisition. The largest global
collection of exchange volume and cryptocurrency pricing data, CoinMarketCap,
cost $400 million.

Today, Binance employs over 1,500 employees and has offices worldwide.
According to Alexa, it is now among the 500 most popular websites worldwide.
Every month, more than 15 million people use the platform.

Binance Funding and Valuation

1. Crunchbase reports that Binance has raised $25 million in total through
eight rounds of venture capital funding and initial coin launches (ICO).
2. Sequoia Capital, Vertex Ventures, Black Hole Capital, Funcity Capital, and
numerous other notable investors are just a few.
3. Binance is not required to make revenue or valuation information available
Request held
to the general public as a privately Pricing
business.
How Users can Access the Binance Exchange
Platform?
Utilizing Binance is simple and operates similarly to other crypto exchange
platforms in that you open an account, fund it with fiat cash, and then trade the
exchange’s listed cryptocurrencies.

To sign up for a Binance account:

1. Sign up for an account using the Binance app or the website.

2. the identity verification process is finished.
3. Select a payment option to add money to your account and transfer fiat
currency (such as AUD, EUR, or USD).

After you have funded your account and made it active, you can browse and
purchase any cryptocurrency listed on Binance. Any cryptocurrency you acquire
is kept in your Binance account, which doubles as a wallet.

Your Binance account allows you to sell any cryptocurrency you own for fiat
money or to trade it for another cryptocurrency at any moment. Additionally,
you can move cryptocurrencies that you have stored in various wallets to your
Binance account and the other way around.

Binance Business Model – Know How Exactly Its

Work

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Business model makes Binance a highly profitable corporation since it is the
largest and most famous cryptocurrency exchange. Have a look at what value
proposition Binance offers to its customers.

Customer Segmentation
Binance is divided into two types of customers,

1. Traders who want to exchange or trade digital assets on a secured and

swift platform
2. And Crypto innovators are always keen to publish their ideas in the
market.

Value Proposition
The value propositions of Binance include

1. Traders: accessibility to a safe cryptocurrency trading platform with great

liquidity and minimal transaction costs;
2. Crypto Innovators: Binance Labs, a technological incubator, and
Launchpad, a hosting platform for new projects and API interfaces,
respectively, are available to nurture promising pre-ICO initiatives.

Binance Channels
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Being a reputed crypto platform, Binance has a website and apps for Android
and iOS platforms.

Key Operations
Users more often ask and search on the Internet about Binance’s key operations
and activities. Well, it includes

1. Trading
2. Software-as-a-service (SaaS)
3. Swap farming

Cost Structure of Binance

No doubt, Binance earns revenue in multiple forms, but its cost structure
includes,

 Salaries

 I.T. operations,

 Marketing (online/offline),

 Maintenance of its website and apps

Binance’s Customer Relationships

Along with its operations, Binance is also popular for the customer service it
provides through different channels, such as

 Social media platforms

 Email

 Telephones

 Binance community and academy

How Does Binance Make Money? Dig into Its

Revenue Streams
Binance stands apart from its rivals because of the diverse and distinctive
streams of revenue it creates. The various revenue streams for the business
include:

Trading Fees
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Binance charges a commission for bitcoin trading. Binance levies a 0.1 percent
fee for each cryptocurrency transaction a user makes or sells. However, the fee
can vary depending on the type of transaction and the currency.

Withdrawal Fees
The cost of moving cryptocurrency out of a Binance account is also levied on
the user. The blockchain network decides the withdrawal costs, which might
change depending on things like network congestion. For instance, Bitcoin can
be withdrawn from many networks, each with its own withdrawal fee and
restriction.

Mining Pool
Additionally, Binance introduced two “mining pools” in 2020 for mining Bitcoin
and Ethereum. With the Smart Pool service, which dynamically switches the
hash rate to mine various currencies using the same algorithm, miners can
increase their profits.

The SHA256 algorithm, which is frequently used for this purpose, is used to
verify blockchain transactions. Users of Ether and Bitcoin will pay pool fees of
0.5 percent and 2.5 percent, respectively, to the Binance mining pool. The fee is
subtracted from the cryptocurrency mined by the Bitcoin mining pool.

Spreads
As of April 2021, Binance users can purchase stock tokens. Similar to genuine
stock, the price of the underlying shares determines the value of stock tokens.
However, even though there is no fee associated with purchasing and selling
tokens, Binance makes money by spreading the difference between the prices.

Binance Labs
With the launch of Binance Labs in 2018, Binance diversified its enterprise into
the venture capital market.

A $500 million investment fund called Binance Labs supports blockchain

companies and entrepreneurs by funding business ventures that advance the
decentralized web and the blockchain ecosystem. Which, as of the time this
was written, has 64 investments.

Fiat Exchange Partners

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To provide fiat-to-crypto platforms similar to Binance, Binance has partnered
with regional organizations. For example, WazirX in India, Binance Lite in
Australia, and the U.S. | Buy & Sell Crypto.

Binance Cloud
The technology required to build regional trading platforms, including
http://Binance.KR and http://Binance.TR, is provided by Binance.

Summing Up
Hopefully, you gained an abstract knowledge of how Binance generates income
from a variety of sources and Binance business model.

Entrepreneurs only consider cryptocurrencies’ business prospects when

everyone else considers the cryptocurrency’s ups and downs. If you also want to
enter the crypto market, contact Elluminati Inc, as we helps enterprises to
develop and design a Binance clone script that is fully featured and allow them
to make the most out of the digital finance market.

Deep Moteria

Deep Moteria is Director of Elluminati. An aspiring entrepreneur having led 75+

startups on the right path with information-admiring content. He crafts content
on topics including on-demand services apps, finances, technology trends, etc.

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