Questioning Binance Becoming Binance

On July 17, the Chinese version of Bloomberg Businessweek apologized to Binance and its founder Changpeng Zhao for the cover title of a report two years ago, saying that it "made a serious mistake" in the 250th issue of the magazine (July 6, 2022), and the cover title "Changpeng Zhao's Ponzi Scheme" was "false and unfounded", so it issued a retraction statement and apologized.

In fact, after the report was published with the above title, Changpeng Zhao stated that he would sue the publishing media for defamation. Two years later, the apology and retraction statement came. Although Changpeng Zhao could not express his position due to serving a sentence, Binance responded, "We are happy to see that the wrong accusation has been dropped."

Legal proceedings, public refutation, correction of accusations, and self-construction. The 7 years since Binance was founded have been 7 years of development and expansion, as well as 7 years of proving its own value and tearing off labels after being questioned. Sometimes, not only the labels attached to the company itself are torn off, but also the labels attached to the entire crypto industry. For example, "Ponzi scheme" was once a negative label for Bitcoin. More than 10 years later, Bitcoin is still there and has become legal tender in small countries such as El Salvador and Dominica. When Binance was "cleared" by the United States through regulatory means, Bitcoin entered the US financial market in the form of an ETF. Litigation and refutation often lag in correcting mistakes. The best way to change negative impressions is to grow positive value. In the field of crypto assets, Bitcoin is like this, and so must Binance.

Building up itself and fighting back against doubts

Even with 200 million registered users, which is 2/3 of the crypto-asset audience, the various doubts surrounding Binance have never dissipated since its establishment 7 years ago. This seems to be a challenge that the world's largest crypto-asset trading platform must bear.

Recent doubts are focused on "girlfriend coins", "rat warehouses", "listing related assets", etc. The criticism is mainly related to the standards for Binance to list crypto-assets.

Facing doubts and transparency of information are the methods that Binance has followed since the Zhao Changpeng era.

This time, his partner and co-founder He Yi went online again and answered questions from the community and industry media for two consecutive months. After reiterating that Binance would not have a "one-man show" when it came to listing assets, He Yi disclosed the evaluation criteria, "First, we will consider the fundamentals, technology and market popularity of the project; second, whether there is investment endorsement is also a consideration; finally, we will look at the life cycle and team capabilities of the project. In fact, the project party often does not know whether it will be selected before listing the coin."

Fighting back is the second way Binance dispels unfavorable voices.

Two years ago, after Bloomberg Businessweek changed the title of the English version of the report and published an article about Zhao Changpeng as "Ponzi Scheme", the founder and then CEO of Binance sued the other party for defamation. Two years later, the title was withdrawn and the publishing media apologized for the harm and impact caused to Zhao Changpeng and Binance.

Apology statement from Bloomberg Businessweek

Media reports will bring public opinion crisis to the brand, and the accusations of government departments should be taken more seriously. Binance's choice is to respond to the lawsuit.

Last June, the U.S. Securities and Exchange Commission (SEC) sued a number of companies engaged in crypto asset business, including Binance and Coinbase. The causes of action against Binance included selling unregistered securities and improper handling of customer assets. Although the SEC's prosecution is civil and not criminal, Binance still chose to "fight to the death" with the other party in law.

The two sides fought for more than a year, and the confrontation achieved phased results. In early July this year, Coindesk reported that Amy Jackson, a judge in the District Court of Columbia, dismissed some of the SEC's charges against Binance, including the sale of BNB tokens and unregistered securities in the Simple Earn program on the secondary market. However, the judge ruled that other charges against Binance can proceed, including its initial token offering.

1 year, 2 years, the cost of going through the legal process to prove itself is effective, but it is always full of uncertainty and expensive. No one knows this better than Binance. More often, it needs to cross the river by feeling the stones in the current situation where the industry is too new and the supervision is unclear, build itself, dispel doubts, and prove its positive value to users, the community, and even the world.

BNB is a microcosm of this process. In July 2017, when this crypto token was born in the market as Binance platform currency, it was widely questioned, "What is the value of the currency issued by the exchange?" What followed was the coin refund storm under the ICO ban, and BNB fell below the initial price of $0.1.

BNB, which was not believed by most people, rose to $1.5 at the end of 2017. The cycle and the market drive the price. As for the value, Binance first gave BNB a use scenario of "handling fees" and designed a deflation mechanism for it by repurchasing and destroying.

BNB price trend from 2017 to now, data from CoinGecko‍‍

The market's suspicion is always conquered by the price, and the opponent chooses to follow. Since then, almost all crypto asset trading platforms have created their own platform coins, but none of them can catch up with BNB's market value (currently reported at $84.785 billion, ranking fourth in the crypto asset market value ranking, behind BTC, ETH and USDT).

BNB's use scenarios are also continuing to increase. Today, it is a pledge certificate for LaunchPool, an innovative project airdrop tool within the Binance platform, a qualification certificate for Magadrop, a new asset issuance tool, and a donation asset for Binance Charity.

However, Binance does not lock BNB in ​​the trading platform, so it does not represent the valuation of traditional companies. Instead, the exchange has returned BNB to the essence of blockchain.

From 2019 to 2020, BNB was successively transformed into on-chain Gas for Binance Chain and Binance Smart Chain (now BNBChain), and truly became a blockchain asset.

When BNBChain was born, there were many doubts, such as "Exchange background", "21 nodes are not decentralized enough", "copycat chain", "Dog chain", etc. Binance's choice was to gradually let the community take the lead and not participate in node governance. The community strengthened infrastructure security during the operation and maintenance process, and Binance played the "asset gatekeeper" obligation on the exchange side, with the chain and the exchange performing their respective duties.

After BNBChain, exchanges built chains in a trend. After a mess, BNBChain not only survived, but also became a mainstream blockchain comparable to Ethereum with low gas fees, high transaction volume, and many applications. And BNB has also risen from less than $0.1 seven years ago to $721 this year, up to 7210 times.

Unlike Bitcoin, whose founder disappeared, the growth of BNB is to a certain extent the result of Binance's self-growth, representing the consensus of users on this platform. From the exchange to the entire ecological product, Binance needs to continuously release credit to users, provide a friendly experience, and use construction to dispel doubts, which in turn will add color to the "totem" of BNB.

The story of growing against the trend can always touch people's hearts. Binance has been established for 7 years, and 200 million people with crypto assets have chosen it.

Proving value can "cross the chasm"

Is it stable to have 200 million users?

He Yi doesn't think so. In recent public speeches, she has been emphasizing that 200 million are registered users, not active users.

Furthermore, in the industry, even a giant like Binance has always faced doubts, lawsuits and even expulsion, while the crypto asset market with a total market value of 2 trillion yuan, which was spawned by blockchain technology, has more than 14,900 token assets, 1,158 trading platforms, and has attracted at most 600 million users.

In contrast, the number of Internet users in the world has reached nearly 5 billion. If blockchain is regarded as Web3.0, the crypto asset market with 600 million users is definitely not mainstream at present.

Even today, there is only one crypto asset that has entered the public's field of vision, Bitcoin, which has also entered the securities market in the form of ETF and has been accepted by the mainstream financial circle. However, on mass social media, the labels of "Ponzi scheme", "tulip bubble" and "pass the parcel game" have not been completely torn off Bitcoin, while blockchain and crypto assets have been kept away from the public due to labels such as "crime", "money laundering" and "hacker paradise", and are being watched by regulators in various countries.

In He Yi's view, the blockchain technology and crypto asset industry, which has developed for more than 10 years, has not stepped out of the niche circle, "because our industry has not yet created more products that are truly useful to society."

Binance co-founder He Yi (left) and CEO Richard Teng

If we count from 2008 when Bitcoin was born, the crypto asset industry has been in its 15th year, and Binance has also started its eighth year. As one of the leaders in the crypto asset exchange industry, Binance has set the slogan for its seventh anniversary this year as "Be Binance", which literally means "Become Binance".

"Becoming Binance" may be the dream of many exchanges in the industry, because it means the first in market share, trading volume, and number of users. In the Internet world, traffic dominance is almost equivalent to making the most money.

Now to become Binance, it is not enough to make good products related to the trading platform. The higher requirement is to bear the cost of innovation and even trial and error, including doubts from the outside world and the game with regulatory authorities.

From this perspective, "Be Binance" is Binance calling on the industry to gather together and hope to build together. For Binance itself, its long-term goal is the original intention when it was founded - to achieve financial freedom.

In the current world operating rules, this is an idealistic and risky goal, but it reflects the needs of the vast majority of people in the world, and it happens to be something that blockchain technology can achieve.

In the eyes of many crypto industry entrepreneurs and even traditional financial practitioners, the best scenario for the realization of the value of blockchain technology is finance. "Bitcoin itself is defined as a peer-to-peer electronic cash system. The hype of tokens has weakened the value of the technology. The peer-to-peer decentralized model can effectively eliminate the cost of cross-border payments, but this also means that the way to encrypt assets must be within the regulatory framework to prevent crime." A person engaged in the domestic payment industry believes so.

He Yi explained that Binance’s mission of “achieving financial freedom” does not conflict with regulation. On the contrary, cooperation with regulation is always needed in the process. “This is the prerequisite for the crypto asset industry to enter the mass market.”

In recent interviews, He Yi mentioned the word “crossing the chasm” many times. She explained that only when it is useful to the real world can the dimensional wall between Web2 and Web3 be broken. “When we observe and look for high-quality projects, we also want to find products that are truly valuable in the scenario and grow with such projects. They must have a business model that can withstand verification and be self-sustaining, rather than just relying on issuing coins to make a profit and running away with a profit. However, there are not many such excellent projects.”

Unfortunately, even Binance cannot influence the market’s preference for highly volatile crypto assets. People are eager to realize the myth of wealth from coins that increase tenfold or a hundredfold, even though everyone knows that Trump's meme coins have no practical use, but that doesn't matter. As long as the price rises, there will be popularity, and with popularity there will be traffic, and traffic is the battleground for exchanges.

The current crypto asset industry does not seem to be ready to "cross the chasm". Perhaps "realizing financial freedom" will ultimately depend on Binance itself to continue crossing the river by feeling the stones. However, it has launched the "Be Binance" call, as if shouting to the industry: Instead of questioning Binance, why not become Binance together?