How does Binance CEO Changpeng Zhao see the cryptocurrency industry in 2021?

Source: Binance

Original title: "Binance Outlook 2021: Innovating in an increasingly decentralized world"

Original author: Changpeng Zhao, CEO of Binance New Year's speech, in the past year, with the crazy cryptocurrency industry, the cryptocurrency trading platform Binance has refreshed many of its own records. In the highly anticipated 2021, Zhao Changpeng also expressed his acceptance of the cryptocurrency industry. Viewpoints on how it will develop.

Dear Binance users: 

In last year’s New Year’s speech, I specifically mentioned that Binance should lay the foundation for the development of the global crypto asset ecosystem. In 2020, we will continue to do this, adhere to the concept of "customer first", continuously launch new products, and improve our services. Overall, I think we are still in a stage of "laying the foundation", and there are still many things to be done in the future.

The encrypted world after the epidemic

The raging new crown pneumonia has completely changed our way of life , affecting the health of countless people and disrupting the global economy.

In 2020, global markets have experienced unprecedented volatility and instability, adding to the already fragile economies of many regions. The epidemic has also led to drastic changes in the macroeconomic environment, such as the adoption of quantitative easing (QE) policies in almost all countries. With the increase of macroeconomic uncertainty, rising inflation, and the shrinking of traditional assets under the impact of the epidemic, more and more eyes around the world are turning to Bitcoin and other encrypted assets. During the year, the interest of traditional investors in crypto assets continued to rise, and the number of institutional clients joining the Binance trading platform also continued to increase. In 2020, the number of institutional clients on Binance increased by nearly 70%, while new institutional user applications increased by 35% month-on-month. More and more individuals and institutions regard it as an asset allocation choice, and the encrypted asset market has thus been pushed to a new level and gradually become the mainstream.   

In 2020, the 24-hour trading volume of Binance spot trading hit a record high - 15 billion US dollars, while the average daily trading volume of spot The volume was US$3.88 billion, a year-on-year increase of 36%. In 2020, there is also a cryptocurrency contract market that is particularly booming. Contracts provide the market with essential hedging and liquidity opportunities. Binance Futures also grew rapidly this year: in 2020, our trading volume reached 1.7 trillion USDT, an increase of 28 times year-on-year; the 24-hour contract trading volume also hit a record high of 37 billion USDT, an increase of 34 billion USDT year-on-year. Also hitting a record high is the holdings of Binance contracts, which reached 2.6 billion USDT, an increase of 18 times in 2020.

Binance Main Station is also committed to helping crypto investors better manage their assets. For example, our Binance mining pool and Binance wealth management both have high yield and liquidity. The current total value of encrypted assets on the Binance financial platform has exceeded 2.9 billion U.S. dollars, and Binance Mining Pool, which only started serving miners 9 months ago, not only has the lowest fee rate in the world, but also has become the second largest computing power in the world in a short period of time. .

In the long run, the impact of the epidemic is still unknown. But for now, we're still in the midst of economic chaos and historic volatility. I think that the price of Bitcoin and the market value of encrypted assets will continue to rise in the future, hitting new historical highs.

Future Direction: Compliance

As we all know, the encryption industry we are in is a Very new industry, with a lot of regulations and guidelines that need to be developed, just like what Google and Microsoft faced when the Internet was just emerging. Moreover, encrypted assets are facing a global audience. For such a frontier field of encrypted assets, the regulatory policies of most jurisdictions around the world are still changing.

Compliance is a journey, not a destination. Good regulatory solutions can promote market innovation and openness, and we are optimistic about the regulatory frameworks and guiding policies being developed in various regions of the world. I believe that in the next 12 months, there may be opportunities to see more positive regulatory signals.  

We are committed to always complying with the regulations in each location, while promoting the adoption of encrypted assets, it also allows us to better protect users and provide them with best service. At present, we have also obtained access permits or obtained compliance licenses in many regions around the world. For example, in March 2020, Binance obtained the PSA exemption license from the Monetary Authority of Singapore; in September, the compliance platform Binance Turkey was launched; The European market operates in compliance; our partner Binance US has also obtained MTL licenses from 37 states and so on.

In addition to investing heavily in compliance work and various collaborations with compliance partners, we will continue to work closely with various regulatory authorities. As a global decentralized organization, it complies with the regulations of each operating location and promotes active rule-making in the industry. We look forward to working with more local governments and regulatory decision makers in the new year.

Innovation: Decentralized Finance (DeFi) and Binance Smart Chain (BSC)

This year, we have witnessed the rise of decentralized finance (DeFi), which is a successful attempt at the free flow of value under blockchain technology. Through DeFi, people can participate in encrypted financial products in new ways and benefit from them. The emergence of DeFi has also brought more traffic to the blockchain network, which has brought a series of new challenges to developers, such as increased network fees, network congestion, and more.

In order to promote the development of blockchain infrastructure, the Binance community has devoted itself to building the public chain Binance Chain since 2018. And in 2020, in order to help the entire encryption community solve problems such as network congestion, we have cooperated with the Binance Chain community to launch the Binance Smart Chain (BSC), which will provide a basis for promoting decentralized solutions (such as DeFi and others related to the blockchain) related solutions) to make more innovations and contributions. Through BSC, we provide an EVM-compatible high-performance, low-rate blockchain network. Now here, developers don't have to worry so much about cost and can focus on innovation. In order to support the entire blockchain developer community, we also launched a corresponding developer incentive plan.

At present, the BSC mainnet has only been launched for 4 months, but the progress is quite fast. The current number of addresses on the chain exceeds 600,000, the highest number of daily transactions exceeds 473,700, and there are more than 60 high-quality projects on the chain. The average gas fee per transaction is as low as $0.07.

In addition to BSC, another focus of Binance’s DeFi field is DEX (decentralized trading platform), which is very suitable for tokens that are in the early stages of development. In 2020 The total number of tokens listed on Binance DEX is 154. The existence of DEX also provides a good test field for large-scale CEX (centralized exchange platform) such as Binance main station.

In addition, the innovations that I am particularly interested in include liquidity pools and AMMs, so we have also launched many such DeFi innovative financial products on the Binance main site , such as DeFi Staking and liquidity mining (Binance Liquid Swap), etc., provide users of centralized platforms with good opportunities to participate in DeFi. We have also specially launched the Binance Innovation Zone, which is dedicated to listing new encrypted assets. While providing liquidity for DeFi tokens, it also clearly distinguishes the different risks of assets to remind and protect inexperienced traders.  

Fundamentally speaking, both DeFi and CeFi are an indispensable part of the prosperity of the industry to meet the different needs of users. As an industry-based platform, Binance will continue to create better solutions to support new technological developments and user needs.

In 2021, I believe we will see more DeFi and CeFi related product combinations.

Expansion: legal currency, stable currency, encrypted asset payment and traditional finance

In 2020, PayPal's entry into the encrypted asset market, and Square's rapid expansion in this field, have helped more people understand and start to enter the encrypted world. There are also Stanley Druckenmiller, Paul Tudor Jones, Franklin Templeton and MassMutual, as well as many "big names" in traditional finance, who have increased their investment in encrypted assets such as Bitcoin this year. In addition, hedge funds, mutual funds, and even a 169-year-old insurance company are all buying crypto assets for real money. Their participation plays an important role in further user education and popularization of encrypted assets, and everything is moving in a bright direction. Perhaps in 2021, we will also see some pension funds and sovereign funds begin to allocate a small part of their funds to allocate encrypted assets, so as to hedge the risks in the fiat currency world.

Traditional finance and public attention mean that the passage from the fiat currency world to the encrypted world is particularly important.

This year, we have newly opened 28 fiat currency channels, providing users with 46 kinds of fiat currency trading markets that directly buy and sell encrypted assets, covering credit cards, bank transfers, various Wallet and many other ways. This year, the total order volume of fiat currency directly entered through Binance exceeded 31.9 billion US dollars, and the highest single-day transaction volume reached 100 million US dollars.

In addition, Binance’s US dollar stablecoin BUSD has also made rapid progress in 2020, with a total market value of 805 million US dollars, ranking fourth in the global stablecoin market. We also broaden fiat currency channels around the world through the most effective ways, such as investing in the acquisition of Tokocrypto, Indonesia's first compliant encrypted asset trading platform, and Wazirx, a platform supporting India.

The development of encrypted assets in the payment field is remarkable, and it is hoped that there will be more progress in the future. Of course, this has not yet been popularized on a large scale. This may be mainly because the existing legal currency payment methods are very mature and difficult to convert in a short period of time.  

Nowadays, a better way should be to keep up with the existing legal currency payment methods so that the two can coexist. Therefore, we have launched the Binance Card in the international market, users can directly use the wallet in the Binance account to pay in fiat currency, which brings great convenience to everyone, so it is very popular.

I also believe that the cross-border transfer business of stablecoins will continue to grow next year. Making cross-border payments using stablecoins or any crypto asset is easier and cheaper than traditional methods. For example, it can be done by using Binance’s C2C platform. At present, the total order volume of C2C in 2020 will reach 6 billion US dollars, and there are as many as 1,454 merchants worldwide.

Although the results are not bad, we will continue to strive to expand the channel between the fiat currency and the cryptocurrency world, as well as the payment scenarios of cryptocurrency in the fiat currency world, as much as possible Lower the threshold so that more people can enjoy the benefits of cryptocurrency and provide users with the best experience.

The Promised Land: BNB Application Scenarios and Ecological Support

The total number of BNB burned in 2020 It was 13,384,040, an increase of more than 2 times compared to 2019. In this year, the total value of BNB burned was nearly 219 million US dollars. Behind these data, what is more important is the sustainable development of the BNB ecology.

In 2020, one of our most high-profile investment and M&A events is the acquisition of the industry's top traffic website CoinMarketCap. I know that this also caused some discussions and disputes in the community at the time, so I have also specifically responded to these issues. As the brain center and information platform in the encrypted world, it is also a window for the mainstream world to understand cryptocurrency. The cooperation between CMC and Binance can provide better information and data support for the entire industry, jointly promote the infrastructure construction of the encryption industry, and serve the common development of the entire industry. At present, the total number of CMC users has reached 50 million, and the total number of browsing exceeds 953 million.

In addition, as one of the most popular encrypted wallets in the world today, Trust Wallet, a distributed encrypted wallet, has been actively maintaining the security of user assets and protecting user privacy. Develop the best product user experience. With features such as high privacy, security and ease of use, the total number of users of Trust Wallet has exceeded 5 million, and the number of monthly active users exceeds 2.2 million.

Trust Wallet has currently opened up various public chains and is connected to multiple projects. It is also an important entrance for BSC at present. In the future, Trust Wallet will continue to assume the important role of infrastructure in the DeFi world. The Trust Wallet Token was launched in 2020 because the core members of the project want to give back to the community.

As a new business content this year, Binance Mining Pool has grown from 0 to No. 1 in the world within less than a year of launch The computing power of the second place, I have to say that this is a result that exceeds my expectations.

In addition to the business within the ecology, we have also invested a lot of time and resources in the research of blockchain technology and the promotion of industry-university-research. For example, we established the Binance China Blockchain Research Institute (BCBRI) in Lingang, Shanghai this year to promote the development and implementation of blockchain technology. BCBRI has launched blockchain empowerment projects in multiple regions to further develop blockchain technology research and development and financial technology education, including blockchain, artificial intelligence and big data, and entrepreneurial incubation. This year alone, BCBRI has established close relationships and established projects with more than 20 partners.

Around the Binance ecosystem, from games to cross-border remittances, there are many application scenarios and cases of BNB. This year, the number of application cases/platforms that support BNB is known There are 104, and I can't even list them all again. There is currently a large and diverse community in the BNB ecosystem, and they are starting to grow naturally. I don't know what innovative cases they will come up with next, but I believe it's all worth looking forward to.

We invest real money in every corner of the encryption industry to promote the diversity of the entire encryption ecosystem. For example, we also voted for the global payment provider Swipe, the recently popular DeFi aggregator 1inch.exchange and Math Wallet, etc. In general, we should continue to invest the proceeds in the development of the industry, and we will continue to expand and enrich the industry ecology in 2021, support more industry members, and build the entire encryption industry.

Responsibility: Binance Charity Foundation

2020 seems to be extremely difficult, it happened at the beginning of the year The forest fires in Australia, the explosion in Beirut, and the new crown pneumonia that is still raging around the world have brought great challenges and tribulations to mankind. During the fight against the epidemic, the Binance Charity team provided its own support to front-line medical workers and patients.

Binance Charity raised 4 million US dollars (in the form of encrypted assets) to fight the epidemic, three-quarters of which were donated by Binance, from supporting the Wuhan Anti-epidemic The epidemic began to spread around the world. According to statistics, Binance Charity has supported more than 400 hospitals and donated more than 2 million pieces of personal protective equipment (PPE) in the fight against the epidemic. In addition, in the restoration of the Australian forest fire, the Beirut explosion, and the Notre Dame fire in Paris, Binance Charity has been involved.

Another relatively new thing is that Binance Charity also led the first blockchain art donation platform with the theme of "NFT for Good". Artists around the world can create, sell, auction or even donate their own NFT artworks for the development of NGOs around the world. I think in 2021, from virtual items in games to concert tickets, we will see the maturity of NFT and the adoption rate will further increase. I believe this is a new field worth trying and exploring, and look forward to seeing their development.

Top Priority: Security

Security is a very broad topic and I think There are a few areas to focus on in 2021: 

1. User education. I think the industry needs more user education to help people avoid "running money" and scams. We will continue to enhance user education so that they can make well-thought-out investment decisions. Doing research before investing is key. In this field, Binance helps investors make informed decisions through continuously updated reports and materials from Binance Academy, Binance Research Institute and CoinMarketCap 

2. Security tools. The average person needs better tools to safely store their private keys, with proper encrypted backups. Protecting information online is complex and can be daunting for newcomers to cryptoassets. We have invested heavily in several wallet development projects to help our users.

3. Safe investment. Centralized exchanges must increase their security investments in technologies such as threshold signatures (TSS) to more securely hold user funds. Binance has open-sourced the TSS library, and a large number of community developers are contributing to it.

4. Personal habits. Security threats and the technologies used to defend against them have evolved over time, but one thing remains constant: the human element. The human element is the weakest link. Attackers continue to exploit people's psychological flaws, such as desire and greed for shortcut information. Trust is being abused in increasingly sophisticated ways, including phishing and social engineering techniques. This can bypass some of the most basic defense mechanisms we rely on in the crypto ecosystem, like 2FA. At Binance, we continue to strive to achieve enterprise security and trading platform security to protect users through zero-sum trust mechanisms.   

Foundation: Binance Angels and Community

Binance’s achievements this year It is inseparable from a group of important people—Binance Angels. They are composed of a group of people who recognize the values of Binance and believe in the value of the blockchain and the encrypted world, and have made outstanding contributions to the development of the Binance community.

They are full of enthusiasm for this industry, actively educate users in the community, promote the popularization of encrypted assets, and give a lot of feedback to help us continuously improve user experience, so as to create The best product in the minds of the community. We all uphold the inner vision of "promoting the free flow of global value" and jointly pursue the future of the encrypted world in everyone's mind.

Binance Angels have different backgrounds and experiences, and they have also injected their own values into the Binance ecosystem. We are proud of the existence of Binance Angels, the success of Binance cannot be separated from the support of them and the wider community.

Currently, we have 239 angels in more than 40 communities around the world, if you want to be a part of it, welcome to join us.

Looking forward to 2021

In the new year, we will continue to move forward steadily, Developing products that users love will also continue to improve our service level to users, protect users and the industry, and do something meaningful to society within our capabilities. In 2021, Binance will have many new products and progress to meet with you, so stay tuned!

Personally, for the past 10 years, I've wanted to get a six pack abs, but it never came true. My greatest hope is that the world in 2021 will not be as crazy as it was in 2020, and people's lives will continue to improve.  

Wish you all a healthy and happy new year.

- Binance CEO Changpeng Zhao

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