Although trust in centralized platforms has been severely damaged by the fall of FTX, one of the three largest crypto exchanges in the sector, some CEXs are still increasing trust and reporting more creditworthiness.
Binance, an unchallenged reign
In this year 2022, Binance has confirmed or even reinforced its supremacy over the competition. At different times of the year, Binance or its CEO Changpeng Zhao hit hard with an offensive strategy aimed at luring more investors to their crypto platform.
Before the fall of FTX, the CZ exchange had many highlights that showed the power, resources and ability of the platform to manage during the crisis in the crypto markets.
From a utility perspective, Binance was already one of the lowest crypto platforms in the industry. To demonstrate great sustainability, the crypto exchange decided to gradually open trading pairs without fees attached to digital assets responsible for large transaction volumes.
In fact, first in July and then in August, Binance announced that 13 trading pairs linked to Bitcoin were free on the spot market, then the ETH/BUSD pair, one of the main trading pairs for the Ethereum asset. . Through this initiative, Binance has hit hard by depriving itself of very significant revenue, even as the crypto industry is ravaged by the crisis and mismanagement of certain players.
During the year, the exchange has thus gone against the core of its rivals and favored its expansion within the crypto ecosystem. Instead of a downsizing, Binance has notably advocated a completely opposite strategy for development and international growth. At present, hundreds of positions are still to be filled, while the teams already have more than 6,000 employees in their ranks.
Unmatched trading volume
Binance’s stranglehold on the crypto market is such that it will be difficult to dislodge this industry giant in the future. Year after year, the stock exchange’s position has been strengthened, and the gap with the main competitors has widened. Dominating social networks, Binance is even more so when we take into account the numbers that really matter.
In the spot market, the gap to the competition has actually widened, and day after day, Binance’s performance is more than 5 times better than other crypto exchanges.
In the derivatives market, even dynamic for Binance, which is far ahead – even too far – compared to its competitors.
Furthermore, the fall of FTX could very well have strengthened the supremacy of the exchange, as Sam Bankman-Fried’s platform appeared to be one of the only serious competitors for CZ and Binance.
In fact, FTX was also in full expansion and with its huge sponsorship contracts in the US, it seemed to be one of the platforms in good financial shape that could come and tickle Binance for leadership.
However, with this graph reported by The Block, we can observe that Binance has steadily increased its influence, being in December 2022 responsible for more than 85% of the trading volume on the spot market when the platform is compared to some of its competitors ( OKX, Kucoin , Crypto.com, etc.). This value has also increased in recent years and months, as in January 2022 Binance was responsible for “only” 50% of the volume, against the same exchanges. This graph clearly shows that from one year to the next, Binance has marked several steps at a time, unlike other crypto exchanges.
During this year 2022, Binance has made regulation one of its priorities and has tried to settle in various key locations around the world. France has not gone unnoticed and CZ seems to have made it a major target. With this in mind, the exchange has submitted to various conditions set by the AMF in order to be issued the PSAN license allowing it to operate in France. However, this expansion strategy was also characterized by obtaining licenses to operate in other countries of the world in order to expand its international influence.
Its influence within the cryptocurrency industry is such that Binance briefly considered buying FTX, its biggest rival platform. Takeover, which did not go through due to the poor financial health of the Sam Bankman-Fried platform. That said, just thinking about this possibility is a testament to the strength of Binance.
Additionally, since the start of the crypto market crisis, this major player in the industry has been at the center of the action by constantly commenting on industry news through CEO and spokesperson Changpeng Zhao.
But above all, the CEO has worked directly or indirectly to bring more transparency to the sector by proposing on various occasions to the exchanges to demonstrate the existence of their reserves. Binance was therefore one of the first exchanges to lead the way by sharing their Proof of Reserve. On December 7, an audit conducted by a specialized firm even confirmed the real existence of Binance’s reserves on certain assets. Thus, Bitcoin is 101% secured on the exchange.
Finally, for more transparency, a host of wallets belonging to Binance have been shared to provide more visibility into the details of the exchange’s reserves. This information is notably listed on CoinMarketCap both for Binance and for other exchanges.
Finally, the inclination to help others is no longer in evidence, as Binance has evaluated the acquisitions of a large number of companies linked to the cryptocurrency world, moving on to purchase some or even deciding to create a fund to help. when FTX had just gone under.
Binance 2022 Highlights Overview
- Changpeng Zhao, CEO of Binance is approaching the richest in the world with an estimated fortune of $96 billion (January 2022).
- While some cryptocurrency platforms increase expensive sponsorships, Binance chooses to invest in Forbes magazine worth $200 million (February 2022).
- Increasing trading volume on Binance at different times of the year with record amounts (April 2022).
- Binance supports Ukrainian refugees and provides 75 BUSD in aid for 3 months (April 2022).
- The Chinese stock exchange has been issued the PSAN license by the French authorities. A major blow that allowed the platform to enter France. A new building block for international expansion (May 2022).
- Shortly after the start of the summer, a collaboration between Binance and soccer star Cristiano Ronaldo became official. The Portuguese, the most followed person in the world on Instagram, will thus have his own collection of NFTs on the exchange (June 2022).
- Very offensive during the summer, Binance announces free trading of 13 pairs on the spot market linked to BTC. Thus, very important pairs such as BTC/BUSD or BTC/USDT see their transactions without fees (July 2022).
- In the “controversy”, the ETH/BUSD pair is also exempt from trading fees on the spot market. Actions that only Binance has been able to perform (August 2022).
- Subsequently, Binance also decides to participate at its own expense in the burning of LUNC tokens. Several millions of dollars are spent by the platform to burn these tokens. Binance therefore decides to do without new sources of income while the rest of the industry is in distress due to the lack of liquidity.
- Binance USD, or BUSD, crosses 20 billion in market cap, gradually closing the gap with USDC or USDT. Stablecoin also strengthens its third position for currencies of this type (October 2022).
- Following troubling box office reports from FTX and Alameda Research, CZ publishes decision made by Binance gradually selling its FTT tokens. Fear has gripped the crypto industry and this simple tweet marks the beginning of the end for the Sam Bankman-Fried exchange (November 2022).
- While Binance’s takeover of FTX was for a time mentioned and predicted, this operation ultimately did not take place due to the disastrous internal situation of FTX. However, this purchase rumor, launched by SBM and CZ personally, shows Binance’s display of power and its hold on the crypto market (November 2022).
- Binance continues its expansion with the fall of FTX, leaving all its competitors far behind (November 2022).
- Binance becomes the centralized crypto exchange holding the most Bitcoin in the world (November 2022).
- Mazars Veritas announces on December 7, 2022 that it has certified Binance’s Bitcoin reserves. The collateral of the asset is 101% in Bitcoin. An announcement that will reassure more than one as rumors are rife in the crypto industry (December 2022).
For 2023, Binance will undoubtedly aim to continue building the Web 3 industry and the decentralized world that some have dreamed of, and will certainly play a major role in the generalization of cryptocurrency adoption.
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