Fellow Binancians,

For this past quarter, we just burned 2,253,021 BNB, plus 867 BNB from the Pioneer Burn Program, for a total of 2,253,888 BNB. This effectively took $68 million USD worth of BNB out of circulation forever. This is a healthy, steady increase for our BNB burn in USD terms, compared to the last quarter. 

This 13th quarterly BNB burn is the highest-ever in fiat terms and fourth-highest in the amount of BNB burned. See the transactions for this burn here: Transfer | Burn.

As usual, I will take this opportunity to share a few thoughts. 

DeFi & CeFi

DeFi kicked into high gear in the last quarter. To a large extent, DeFi helped fuel the growth of our industry. Interestingly, it probably made crypto prices more resilient to negative news and FUD given the increasing amount of crypto locked in liquidity pools. Also in this quarter, we saw a number of bubble bursts, rug pulls, price drops, or however you like to call it. This is an important reminder that you need to be vigilant and learn to protect yourself at all times in a decentralized world. Always stay SAFU.

I was asked about DeFi during almost every single interview in the past quarter. I might as well summarize my thoughts here.

I believe many core innovations of DeFi will stay, including liquidity pools, AMMs, on-chain loans, etc. The high APY yields will not last that long. It will drop back to a reasonable double or single digit range over time.

In the long run, I believe DeFi will be the future, ie, overtaking CEX (centralized exchanges). But it won’t happen just yet, for a number of reasons. While the TVL (total value locked) on DeFi is high, the number of active users is still low. Not to mention, 99.9% of the world’s wealth is still in fiat, and we still need CEX fiat bridges to bring them into the crypto world (more on this later). And if we want true adoption, 99% of the mass population - the average users - are not technical enough to securely hold their own private keys given the tools we have today. More tooling needs to be built. And CEX is still easier to use for the majority of people, for now.

Saying the above often gives people the wrong impression that we are trying to hold on to our CEX. We are not. Even as one of the largest CEX in the world today, we view our CEX as a transient product. The future world will be decentralized, and we want to accelerate the pace of change. In fact, I personally am eagerly waiting for that day to come. I long for the day when we no longer need to hold custody of users’ assets, and become just a contributing member of a decentralized financial ecosystem.

To this end, Binance is one of the very few centralized exchanges that have contributed significant funding as well as development resources to DeFi (DEX and blockchains). Our team contributed to the development of Binance Chain and Binance Smart Chain, both of which are multi-year projects in collaboration with many independent developers and projects in the community. Luckily, as a result of these long-term investments, we are seeing these efforts bearing fruits.

Binance Smart Chain

This quarter, we launched Binance Smart Chain (BSC), an Ethereum-compatible, smart-contract-enabled blockchain that is fast-and-cheap to use. BSC took a while to develop, but came to market just in time. As DeFi is trending, Ethereum is congested and transaction fees are high, which I believe hinders the growth of the industry. We are proud to offer an additional (not replacement) avenue for developers to deploy their solidity smart contracts, and for their users to enjoy high capacity transactions with low fee.

Even though the mainnet launched near the end of the quarter, we have already seen exponential growth that was beyond our expectations. As a result, we are ramping up our investments and contributions in this area, including the following:

  • The creation of the $100 million USD BSC Accelerator Fund for bridging DeFi and CeFi. We have since revealed the first six projects that we’re supporting through the fund, with many more to come. Fill up this form to apply.

  • The Token Canal Project, a new initiative where we support the issuance and binding of more token assets on Binance Chain and Binance Smart Chain. In the couple weeks since its launch, more than $250 million USD worth of tokens have flown into Binance Smart Chain via the Canal.

  • The Panama Project, a new solution that lets users bridge their cross-chain assets from centralized or decentralized wallets to BSC. 

  • BSC Accelerator Fund’s recent provision of $10,000,000 in liquidity support for the launch of projects based on the BSC ecosystem.

  • Our commitment of 5 million USD to the Binance Smart Chain BUIDL Reward Program (also part of the BSC Accelerator Fund) to reward developers who deploy usable dApps onto BSC.

  • The Pioneer Burn Program, an initiative to aid pioneer BSC users who made honest mistakes in transferring tokens, has already saved tokens worth several hundreds of thousands in USD for users. As part of the program, 867 BNB is included in this quarterly burn.

BNB

BNB has done well this quarter, rising from a low of $18 or so to $31.50 as of today. A number of factors contributed to the growth of BNB. In addition to the “traditional” discounts and perks on Binance CEX, I believe the new Binance Liquidity Pool, Launchpool, Binance Savings all helps. But most importantly, the new DeFi use cases absolutely helped BNB’s growth. From locking liquidity into Burger or PancakeSwap, to paying for the miniscule gas fees on Binance Smart Chain, all of these helped expand the utility value of BNB. I want to take this opportunity to make a special thanks to all of our community members for contributing to the BNB ecosystem.

Seeing the growth of BNB and how it has become a native coin on two blockchains, with many different use cases, makes me really proud of our team. When I say “our team,” I am using a broader definition to include all our community developers, Binance Angels, KOLs, and everyone who is supportive of the BNB ecosystem, whether it’s on social media or elsewhere. Thank you!

CeFi

The Binance CEX (centralized exchange) remains one of the largest exchanges in the world, both in terms of active users and trading volume. In the last quarter, we have made many additions to our CeFi offerings.

The Binance ecosystem has expanded even more globally and more locally, with more coins, more fiat currencies, and more local languages, including Arabic and Filipino.

Here are some of the highlights from the recent quarter:

  • Ongoing buildout in multiple countries and regions, including new initiatives for upcoming local launches in the UK and Germany.

  • Binance Futures’ first anniversary and continued growth as a leading crypto derivatives exchange, now offering 62 USDT-margined contracts, 26 Binance Leveraged Tokens, 20 coin-margined contracts, and 5 options contracts.

  • Binance Fiat our Fiat gateways have expanded to 232 countries offering low-cost, quick and secure ways to buy cryptocurrencies directly by credit/debit card, bank transfer and local payment methods. Highlights of this quarter include corporate support for Euro SEPA and GBP faster payments, PayID in Australia, bank transfer in Brazil and iDeal in the Netherlands.

  • Binance Liquid Swap – The first “centralized” Automated Market Maker (AMM) pool, which offers better liquidity for traders and higher returns for lenders.

  • Binance Earn – A one-stop-shop for Binance’s crypto financial products, including savings, staking, asset management, and more.

  • Binance Launchpool – A secure way to farm new assets by staking BNB, BUSD and other assets. Since its launch, Launchpool has hosted five token offerings.

  • BUSD – Our US dollar-denominated stablecoin also celebrated its first anniversary with its rise to more than 800 million USD in market cap, No. 4 in stablecoin rankings, and Top-30 ranking across all crypto.

Binance Charity

In the Crypto Against COVID campaign, up to date we have raised $4.3 million worth of cryptocurrency in total, with $3.3 million donated from the Binance ecosystem. We have deployed $3.7 million to purchase 1.7 million personal protection equipment (PPEs) and distribute them to 23 countries around the world, especially in nations that were hit the worst by the pandemic.

Binance China Institute 

Since Binance China Blockchain Research Institute (BCBRI) announced the establishment of its strategic partnership with Linggang Group in Shanghai March this year, with Shanghai as the center, BCBRI has radiated government and industrial cooperation projects in China’s first-tier region/cities including China Bay Area, Zhuhai, Hainan, Chongqing, and Hunan to further promote blockchain technology R&D and construction, industrial technology education (blockchain, AI, big data), industrial incubator (Linggang blockchain industry incubator), and technical project cooperation. Since then, a series of partnerships and projects has been strengthened by BCBRI. Together with Amazon Web Services, we have jointly hosted the New Infrastructure TechCrunch, summit and charity auction.

In addition, we have successfully initiated the Binance Lighthouse Project in China, launched projects including Lingang Blockchain Industry Incubator (with support from 20+ companies), Digital New Infrastructure Innovation Competition (partners include Lingang and Amazon), Moutai Group Co-construction of Fincellar Digital Liquor Certificate Project, Stanford Artificial Intelligence Cooperation Course, and Agricultural Bank of China Offline Technical Training. We completed project cooperation in a number of first-tier cities in China and state-owned enterprises. The goal is to support 1,000+ blockchain industry partners in the next two years, as well as invest special resources and support policy. Binance China Research Institute will rely on the city's major park clusters to carry out in-depth industrial linkages, better support industrial blockchain small, medium and micro enterprises, and efficiently empower physical industries.

Some Negatives

We are still in 2020, and plenty of negative incidents happened in our industry in Q3. From $280 million dollar centralized exchange hacks, to DeFi developers waking up to a $15 million scandal for deploying a test smart contract, the list is quite long and I won’t bore you with it. 

During these difficult times, we try to be as helpful as we can to others and we also reflect inward to make sure we have proper measures to prevent similar incidents from happening to ourselves. 

We had our share of issues with a couple of systems performance bottlenecks during high load. We have a high performance system and scalable architecture, but as the traffic continues to grow exponentially and we make hundreds of updates each day on our systems, we are bound to encounter issues at times. We are working hard to address them as well as reducing future occurrences. But honestly, speaking as an ex-developer, systems will have issues from time to time. I can’t promise we will be bug free in the future. But rest assured, we will do our best to reduce them.

Looking forward

I believe over the next few months, some more of the bubbles in the DeFi space will likely burst and there will be more rug pulls, exit scams, etc. But, after all the dust settles, the key innovations will stay, and the industry will actually be in a healthier state. 

For the serious developers and projects out there, I highly recommend managing your funds so that you can survive and last. We will continue to invest more energy and funds in this new exciting sector as well, pushing BSC to new heights, and we encourage you to check out Binance Smart Chain and everything it has to offer.

On the CeFi front, we will continue to adopt many of the innovations from DeFi. We will also continue to add more fiat on-ramps, building bridges that can facilitate the masses to cross into the crypto world.

As always, we thank you for your unwavering support and contributions to the BNB ecosystem!

CZ