- Despite a bleeding market for most of 2018, the number of exchanges keeps rising
- There are currently over 200 crypto exchanges competing for trade volume, with Binance dominating consistently since late 2017
Despite the heavy losses suffered by most investors in crypto in 2018, long term confidence in the space is high, with more and more mainstream institutions dipping their toes into the larger coins. Actually trading is still best done on pure crypto exchanges, however. And the king of the hill – is still Binance.
Number of exchanges still growing
It should come as no surprise that as the number of crypto projects bloats, so new exchanges arise to compete for the trade of tokens. Coinmarketcap ranks some 188 exchanges with a daily trade volume of more than $10,000 – not to mention the uncountable number of exchanges trying to get off the ground that currently have no volume.
At the top of the list is Binance, with ~$800 million in daily trade volume and a comfortable lead over its closest competitor, OKEx, at less than $700 million.
Binance is also one of few top exchanges that does not appear to be creating fake volume to lure in traders – still a big problem in the ‘Wild West’ of crypto, though regulations are slowly emerging around the world that are likely to end with centralized exchanges being held to the same standards as stock exchanges.
A healthy cocktail or good features and design
But how did Binance rise so quickly to become the top exchange, and how does it stay there?
There doesn’t seem to be one obvious answer. It has low fees – but there are others that have low fees as well. It has a good interface, and provides one of the most reliable, glitch and lag free trading experiences in crypto. But, while smaller exchanges often struggle with these, without the stress test of another bullrun, there are few among the more popular exchanges that run into any problems.
One clear advantage that Binance does have over most of the competition is the BNB token. All exchanges collect some kind of trading fee, of course – it costs money to pay staff and build and maintain an exchange. But Binance created a token especially for that.
Although many exchanges have come up with their own spin for an exchange token – Kucoin and Coss have profit sharing, Huobi lets you purchase a subscription that lowers your trading fees – it’s tough to beat the original.
On Binance you can opt to pay your trading fees in BNB. This does give you a discount on the fee, but it also has the very pleasant cosmetic effect of letting you actually get the full amount of tokens you traded for.
In the grand scheme of things the practical difference is negligible, but personally, I have to admit it bugs me when I trade for 1000 coins and only get 999. Buy one more and end up with 999.999. Buy one more and end up with 1000.998. Can I please just have an even one thousand? On most exchanges, the answer is no. On Binance, the answer is yes.
And if you do end up with small fractions of a lot of different coins, you can dust them for BNB.
PR and Charity work
Aside from the exchange itself, Binance has also done an excellent job of shaping the perception of the crypto community. Users’ funds are insured against a large scale hack of the exchange, and when individual users have issues, customer support is usually quick to help.
Founder and CEO Changpeng Zhao also has an established presence online. With hundreds of exchanges and many times more projects, most players inevitably end up as faceless background figures, only having the limelight thrust upon them if they find themselves caught in a scandal.
Zhao however is active on twitter, and makes a point of being transparent with the community and keeping them informed about future developments of the exchange. He is also endlessly optimistic about future developments – from the distant Binance DEX to Charity to the Analysis Division that launched today, but to be fair having gone from a small startup to the most successful exchange in crypto in under a year, he has a lot to be optimistic about.
The move to support charities and even donate all listing fees certainly has not hurt public perception either.
Overall, exchange platforms are a big market in crypto. Binance has the largest slice of that pie, and it is well earned.