Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Changpeng Zhao: The Meteoric Rise of Crypto Exchange Binance

Episode Date: May 16, 2018

The rise of Binance is one of the most astonishing stories in the blockchain space. Within less than a year of its launch, Binance has become the most popular crypto exchange trading over $2bn per day. In the past quarter, Binance made profits of $200m, likely the fastest company ever to reach this success. Binance Founder and CEO Changpeng Zhao (“CZ”) joined us to discuss why he started Binance and the extraordinary organization they built. We discussed the role of the Binance token, how their strong commitment to values helped build a loyal community, and how he sees the organization evolve in the future. Topics covered in this episode: CZ’s journey in the blockchain space from blockchain.info, to OKCoin to founding Binance The astonishing rise of Binance to $200m/quarter profits in less than 1 year How Binance went from deciding to do an ICO to finishing it in 2 weeks Why strong values are a key differentiator for Binance How Binance built a vibrant and loyal community The critical role of the Binance token in its success The principles CZ uses to run an efficient distributed organization How regulatory competition is rapidly improving the conditions to build crypto companies Binance’s plans to build a decentralized exchange Episode links: Binance Website From Zero To Crypto Billionaire In Under A Year: Meet The Founder Of Binance The World's Biggest Crypto Exchange Is Heading to Malta Binance CEO: The Future of Cryptocurrency - YouTube Binance Whitepaper I Don't Like Big ICOs ICOs — Not Just “Good-to-Have,” But Necessary This episode is hosted by Brian Fabian Crain and Meher Roy. Show notes and listening options: epicenter.tv/235

This is Epicenter, episode 235, have guest, Chongpong Chau. This episode of Epicenter is brought you by Shapeshift.io, the easiest, fastest, and most secure way to swap your digital assets. Don't run a risk of leaving your funds on a centralized exchange. Visit Shapeshift.io to get started. Hello and welcome to Epicenter, the show which talks about the technologies, projects, and startups driving decentralization and the global blockchain revolution. My name is Brian Fabian Crane. And I'm Meher Roy. Today we have a very special guest on the show, Changpang Sao, who is the CEO of Binance.

So many of our viewers and listeners probably have traded on Binance, which is a crypto-to-crypto exchange. And we'll talk to CZ, as he's called, about his story and founding Binance, how it grew, and the challenges and opportunities for the future. CZ, welcome to the show. Hi, guys. Very pleasure to be here. So, yeah, tell us a bit about how you got to be involved in the blockchain space and how you entered this space. Sure. I think that goes back to mid-2013. A friend of mine, his name is Ron Cao. He asked me to look into Bitcoin and said it was kind of interesting.

And he also asked me to look into ripple at the same time. So he's the institutional investment. into BTC China, one of the oldest exchanges that actually recently stopped operations. So that's how I got into this, that's how I got exposed to the Bitcoin industry back then. That's what it's called. And even back then, I was kind of interested to do a first idea was, of course, for many people was to do an exchange. And I think back then it was like Mongols, I think trade hill probably just started. So it was a bunch of very early, sort of very, very early exchanges. And, but somehow I joined blockchain.Info because I bump into Roger Vera at that time. So that's kind of the early start.

And then, so that's kind of how I got into this industry. And so what was that like working at blockchain. What was your role there and what were kind of the things you learned about this industry from that experience? from that experience? Sure. Actually, there's some really valuable experiences from that experience. So I was the third person in.

There was Ben Reeves, who's the founder. There was Nicholas Carey, who was the CEO, and then there was myself. So I was a third person in. Ben Reeves is a very smart guy, but he's a young kid that just want to focus on technology. He's not a very social guy. He doesn't like to talk to much.

And blockchain. In fact in those days had some very interesting properties. It's a decentralized team. So when we had about 18 people that were spread out in like, I don't, I forgot like a dozen countries. They don't have no office back then. They also don't have a bank account. So everything was done in crypto in 2013. So that's kind of a, so everything was done in Bitcoin back then, basically.

I think Ethereum wasn't even started. So that was probably one. that was probably one of the very unique companies back then. And it kind of gives a very interesting exposure to be a pure crypto company, a company with no bank account, no offices, fully, or relatively decentralized. So we actually have adopted some of those philosophies into Binance even today. I mean, this is definitely one of the topics I want to speak a lot about, like, how Binance is run.

But when you think back to blockchain or the info, how well did this work, this, you know, decentralized company and crypto only. And what was some of the pros and cons of that? Sure. I mean, basically, in a decentralized fashion, especially when the teams decentralized, there are some disadvantages, there are some disadvantages.

The advantages, people can, you can hire people from all over the world. You're not limited to your own talent pool. But there's some very interesting disadvantages. Everybody's in a different time zone. Just trying to get a meeting together, takes a, like takes a few emails back and forth. And then usually take a day to organize a meeting because people are spread around all different kind of time zones.

So the efficiency actually does go down. And especially if you have to make decisions, discussions, or stuff like that. It's a bit difficult. And there are ways to overcome it. Basically, you've got to empower the people. So each individual can make a relatively large number of decisions. And they can be silo off. So there are different tradeoffs and different ways to sort of run this kind of an operation.

And you also need guys who are like very proactive, who are self-motivators, who are very proactive. So you want to find guys who are really into you, who really like what they do, who are really into doing this stuff. So they don't need to be asked what to do. They don't need to be told what to do. They will just find stuff to do on their own. So there are some, there's a lot of challenges. So it's not a very simple, straightforward thing. So do you feel that worked well at blockchain. Info?

To be honest, I think at blockchain.com, at the beginning, when we had a smaller team, it worked quite well. But when the team got larger, I don't think it worked that well. So I think basically when the team got larger, if you don't get a, when a team is small, when the early funding teams are all very hardcore crypto guys. So they share the vision, they understand the vision, they kind of work very hard around it. But when you get a larger, when the team become larger, it's kind of hard to make. Well, I shouldn't really comment, but I think so in the last couple of years, blockchain. I didn't really follow blockchain.info very closely, but I think the speed of progress is a little bit slower than I expected, to be honest. So what was the decision for you to leave blockchain info?

How did you make that decision? How did you know it was the right time? Well, actually, so for me, it was, so I was, I've always been working on trading systems, mostly like trading systems for brokers, for exchanges for, so I've been, I spent like the, I've been working for about 18 to 20 years now. So I've always on the, I've always been on the trading side. And blockchain dot info is a block explorer plus a wallet. And it wasn't, it wasn't really where my specialty is.

I mean, the technology is okay. And so in 2014, my current business partner, she joined OKCoin first. And then she recruited me. She said, hey, do you want to work on exchange? And so I joined OKCoin as their third co-founder. So that's how I left blockchain.com. So your experience is on the technology side to build technologies for exchanges at Bloomberg, Fusion trading. it's always been on that side, on the technology side.

Yeah, yeah. So even when I was an intern, I worked at a company in Tokyo who got like basically who are working on trading systems related to the Tokyo Stock Exchange. So even in the early, even before I graduated, I was interning. I was writing software, mostly C++C code for trading systems in the Tokyo. your market. So and then when I graduated, I took the same job, went back to the same company. And then later on, I went to Bloomberg in New York. I was in charge of the Bloomberg Tradebook Futures development team. So I was managing a relatively sizable development team for

trade book for futures trading systems. And so I've always been working on the trading side of things. And I was a developer. I was writing code. And then I was, later on moved into management, I guess, in Bloomberg. And then I went in 2005, I went back to Shanghai to start my own company with a couple other guys. And we were doing trading systems for brokers as well. So I've always been in this kind of field. So it took 20 years, basically. Yeah, yeah.

So then you were at OKCoin and you were CTO there. And then you work for OKCoin for around a year. and you then left on some differences. Tell us about that experience. So one of the key differences, I think I can explain that a little bit better now, which is in a place where when regulations change very quickly, and there's basically very high degrees of regulatory uncertainty,

people are relatively short-sighted. They would just want to make quick money. Basically, if you have a 10-year plan and the regulation changes every 3 to 6 months and that's a high degree of authority, that 10-year plan usually doesn't work very well. So people are forced to have a shorter-term vision. When you go to more and more short-term vision, people are more into short-term gains and they get into sort of questionable gray areas. And that's kind of different from the value view or the values. that I've been brought up to from the international, from more of an international exposure. So I didn't agree with a lot of the value, a lot of the ways the values are generated in there.

So I left, I didn't get, there's a lot of decisions I didn't really agree with. I won't get into the details, but I just said, look, this is not really for me. And I left. Yeah, I remember at the time reading about your departure, because there was a lot of discussion around it. I think was there also a hack at that around then? Or I remember there was something where there was a lot of discussion around OKCoyne and then kind of your departure as well came. So the discussion came three months afterwards over a contract between Roger Veer and OKCoy.

It's a contract that I facilitated when I was at OKCoy. But basically when I left, the contract was reviewed by both parties and was fine. And three months later, it came out of nowhere. saying a bunch of debates. And so it is what it is. So after OKCoin, you started your own company, right? And the company, as far as I understand it, was to focusing on building exchange technology.

So can you walk us through? Like, what was the decision making or the thinking behind starting that company and how did it turn out? Sure. So that company is called BJ Tech. And so that's early 2015. And I thought about building an exchange again.

And to be honest, I first thought about building a Bitcoin exchange, like a Seattle to Bitcoin exchange. That's what most exchanges are back then. And I looked around. I was missing. I had a couple of tech guys who actually pinned me and wanted to do something together. And so we had a tech team, a very small team, like a three people team back then. But then we were missing the marketing and operations and customer support side of things.

And when we were building it was like, well, it's going to be quite hard for us to build this exchange, just only having a tech strength. And when we were talking with a couple of other guys who are a couple of other people who are either already have exchanges or who are planning to build exchanges. And they said, well, hey, Champaign, why don't you just build a technology platform and we'll buy it from you? And so that gave me an idea. He said, hey, we could sell the platform as a technology platform. So we kind of morphed the business into that within a couple of months. And we were selling systems. And then something happening July 2017, where there was a lot of other what we call

cultures exchanges in China that basically trade stamps, art antiques, and all these other crazy stuff. And they had a very archaic system. very slow and they say hey champion you have this really fast system can we can we can you adapt your system to our needs what's that fine that's kind of what we do and we adapted that so and so in china there was like they at peak there was about 2,000 of those type of exchanges so over the next two years we stole about 30 copies of our exchange system and it's always provided this as a platform as a service so people pay a monthly fee and they they get an exchange system

and we provide the back end, the front end, the mobile apps, everything. So we did that for two years, had 30 clients. And so that's the exchange system we built from scratch. But when we built it, we wanted that system to be very high performance. So everything was engineered. Everything is engineered not like the first cut of a prototype. It was always, if it's something that's really advanced, that's really difficult but can improve the performance.

We always took the longer route. So it took us a good two and a half years to build out that system. We actually stumbled on many problems doing that two and a half years. So, and then at the end of two and a half years, actually what happened is the Chinese government shut down all of those cautious exchanges. So most of the business dried up. Well, I said, well, now we look at pollen. Polynec was pretty big when early 2007. We said, well, now that market is quite big.

We could do that. And so that's how Binance was kind of conceptualized. Wow. So like what must have seemed like a disaster, like the Chinese government changing regulations, or turned out to be a blessing in disguise? That happened to us a few times, actually. So we got lucky in a lot of places. Okay.

So that's when like you hit on the idea of crypto to crypto exchange. Now like, like crypto to crypto exchanges are actually pretty old. Like they've been around since 2014, 2015, 2016. Didn't you feel in 2017 that it was like too late to start a crypto exchange, crypto to crypto exchange? Ah, so we actually,

so in 2011 13, even back in the blockchain dot info, we had discussions about a crypto to crypto exchange. So we said the fiat to crypto is the bridge. And once you're into crypto, you can do crypto to crypto. And so that concept was way like back five years ago. So we discussed that.

Of course, the market wasn't quite there. Most of the else at that time wasn't really worth trading. So there was really only Bitcoin. I guess repo was there. People were using it. So in 2015, we actually looked at that as well. And that's when I think Polonex was just starting. And they were quite small.

We said, well, the volume's not that big. And in 2017, though, we looked at it again. We said, well, they're making a lot of money. They're making millions of dollars a day, which is very impressive. But we look at the system. We said, well, we can definitely improve on that. And I talked with a couple of other guys, including Zantaket, who used to work at OKCoin Now Works for fun. And he said, look, if you guys build another crypto-to-cryptory,

crypto exchange that's fast and that has customer service or decent customer service, we're going to switch very quickly. So there was a lot of unsatisfied demand in the market. I think even today, there's probably still unsatisfying demand. I mean, we're not perfect. We have a lot of room to grow. So I think this market is still very new. So it's never too late.

You just got to start and push forward. Yeah, it often looks like that, right? Right there. So that, you know, in retrospect, you say, actually, this was very new. There was still lots of opportunity. But then at the times, you know, you see, okay, there's all these other companies doing it. Maybe I'm too late. But you did, like, you knew. I mean, I guess with your background and having built exchanges, and if you always, if you see that, okay, there's all of those things that can clearly do better, maybe it was obvious that there was that opportunity there. Yeah. Well, the way I've used things is actually a little bit different. I always think there are more opportunities in the future than that what, that have been in the past. It's just the opportunities maybe slightly different. So we did a few things slightly differently. So it is a crypto to crypto exchange,

but we made the user experience. There's a lot of different, there's a lot of small differences. So for example, we didn't just focus on English, where Polonex and then some of the other established players only had an English interface. They pretty much only had a PC web client. So we said, okay, well, we've got to do better, right?

We're going to have multiple devices. We're going to have Android apps, iOS apps. We're going to have native PC client, native Mac client. We're going to do multiple languages. So we did 10, I think right now we have about 10 languages. So we're going to focus on countries that don't speak English or English is not the main language. So there's a lot of different ways you can play. And at the time, even at the time, I was pretty confident there's a,

there's a lot of opportunity. So, but one thing I would say, though, I thought it would take us a lot longer to become the worst number one exchange, even when we started. And even only, even like a week before we became the worst number one exchange, I just thought it was going to take another good six months.

So some of the things were surprised. I mean, it's just something to point out here, right? We haven't really highlighted this. And some listeners may be aware of this, but I'm sure many others are not. So Binance as a company, right? So you talked about July 2017 and Binance started. Of course, there was some work before that kind of accelerated this, but still, it's less than a year. And in the last quarter, you guys made profit of $200 million.

So the quarterly profit of $200 million in less than a year of operation. I mean, this is absolutely insane in a way. And before the show, I was people asking you, because I have never heard of a company that so quickly reached such a level of profitability. So it seems this may well be, you know, the fastest company, you know, in the history of all companies to reach that level of profitability in, you know, such a short time. And then, of course, also in terms of comedy growth, I think you're two or 300 employees at this point, maybe already more, in such a. you know, less than a year. So it's just completely insane growth and an insane business that you've built in an incredibly short time. Yeah, I think a lot of that is surprising to us as well. I think, but there's a lot of factors contributing to it, though. I think basically

companies will continue to grow faster and faster because now the technology, the internet is there, e-commerce is there, and then crypto is there. So there's a lot of things that facilitate, there's a lot of things other people have built, which ensures much higher freedom and the foundations are much more solid. So companies will continue to become faster and faster. But I think also one of the things we were lucky on is basically we are, exchanges is a very special type of business where we're kind of in the center of value exchange. And we got lucky in a lot of places.

I think our product is superior and we have our services decent. And we also are our value proposition, or not our proposition, our current value system. So what we believe in kind of rings very true with the community. So I think that helped people to understand what we do, why we do it, and they agree with our mission, with our principles. So they agree with why we do it. And so that kind of help people to be more loyal or more to us as well. So there's a combination of different factors that helps.

But I think there's a lot of luck too. So I think we just started doing the right thing at the right time and the market exploded. So if everything starts over again, I'm not sure if it's going to be the same result, to be honest. super interesting so you you mentioned in your previous answer value system what is the value system that you focus finance around sure i think basically our value is to spread the freedom so i think basically um the crypto offers a different level of freedom in terms of investments exchange exchange of value and holding different assets. So it's this freedom that we think are very beneficial to the society.

And it's spreading this freedom that's our core mission. So this is what we focus on. And we actually haven't really talked about this a lot in a lot of detail to our users. And we have always emphasizing protecting user benefits. So this is something that we don't really say, but we actually do. and people understand it. So people actually, a lot of our users tell us that, okay, you guys really take our interest,

you guys really understand, you guys are really working hard to protect us. So I think that kind of message, that kind of stuff helps, is very important to build a very strong community. So I think we probably have one of the most loyal and most supportive communities of any business. So we have a lot of guys working for us basically for free on volunteer basis.

We just give them recognition and we give them access to our team. And that's all. And actually most of them are financially free. And some of them are financially free because of us because they bought into the Binance coin early on. So we now have financially free wealthy people working as volunteers, helping our other users. So it's a very unique, it's a very unique situation. But I think that's only part. And other people have tried to copy that model,

but you can't copy that model unless you have that kind of mission, unless you have that kind of value system. So I think that's kind of unique right now. So you mentioned, right, this focus on spreading freedom and on protecting the users. But you said you guys didn't, you know, actually talk so much about this. But so can you give some.

examples of decisions you made, you know, maybe one could have gone A or could have taken decision to, you know, in favor of freedom of protecting user benefits, you know, that actually created that culture. Like, what were some of the critical decisions that you had to make to create this? Sure. Yeah, there's some very clear decisions that when I look back. So for, the first one came about two months at or a month and a halfish after we went live. So back then, So this is literally, so this is September, early September, Chinese government said any ICU projects should return the funds to the investors to the extent basically possible. They didn't say how you do it. But so because of the news, the price of most ICU coins actually dropped.

And so now the investors are actually losing money. And now they, we've now got to return the funds to the investors. Most projects don't have, well, because the coins dropped in price, they actually don't have more. money to make up the difference. So for the ICOs that we facilitated during that time, there was five projects. We actually set as a platform, not our own coin. Like this is other people's coins. So we said we will cover the differences for to return that to the investors.

We calculated how much it would cost us at that time. It's going to cost it cost us actually about six million US dollars in total. And this is back when we were one month and a half, So we didn't have as much money as we had today. So we looked at our financials. We raised 15,15, 15, 15, 1,5 million US dollars in the ICO. We spent quite a bunch of it already. And we now got, we now had, I think we had about, I don't know,

some, we had some money, we were able to cover it, but it was six million is a big chunk of the savings we had. But we said, okay, no, we got to protect our users, we're going to make up the difference, we will cover the costs. cover the costs, we'll cover the differences, even for points that's not related to our project. So when we did that, the Chinese, and this is mostly in China back then. So the Chinese community loved us. They were like everyone was saying we were setting the new standard for how to protect users. And when the other, when the other exchanges in China got shut down and all

the users guess where they went, they all came to us. So you actually worked out in the long run. It worked out very well in the long run, but at the time, it was a really, really tough decision. And if things continue to go bad, we could be out of business, right? So we didn't know how the regulations are going to play out. So that's a very clear example of how some of the difficult decisions have been made. But we always follow our principle. So we have a principle and we make the decisions according to that principle. No, this is amazing.

Yeah, and I can imagine that decision, right? let's say you raised 15 million, you spent three or something like that, and then you give 50% of your money, you know, because, okay, this is, you feel like the right way. And obviously at that point, if it goes wrong, you also have the people who invested in your token sale in your ISO, right? They would then also suffer. So that's, yeah, very impressive.

And I can see that would be a very powerful decision to also establish that culture and community. Yeah. And also, so today we make a lot of those kind of decisions without my involvement anymore. So once you have the mission and value system established, now the team knows what decisions, how to make decisions. So they just make decisions on their own according to those kind of values. So a lot of times, if this kind of decisions, they just make it on their own. This episode is brought to you by ShapeShift, the world's leading trustless digital asset exchange, quickly swap between dozens of.

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So how were you able to spend 6 million when you yourself were returning 15? So that's another lucky break we had. By September, so a month and a half later, by early September, our coin actually went up 10x already. So we sold half of our coins and we still had, we still had half of, like, 40% of our coins. And the coins we had actually, and we also collected trading fees in our own coin, in the Binance coin.

And the coins we collected and the coins we had, which we actually ended up never touching, went up 10x. So now instead of the $15 million we raised, and in theory the $15 million we had in sort of our own coins, roughly, the $50 million in Binance coins we had is not worth $150 million. So it wasn't completely that we were, okay, but the, we decided to lock like all 80 million of our coins.

So we decided to lock basically 100% of our coins. We didn't really touch it. So we had some leeway. But we were, it was a bit easier because the finance coin price already went up 10x. So. Oh, so what happened was that the Chinese said, okay, you have to return the money. And then so people have the coin and they go back the money. at least the Chinese people that they spent on the coin.

Is that correct? Well, no, they have to return the tokens that they bought with. And then the project team is supposed to return the BTC or ETH that they purchased with. They purchased with. Okay. So basically, the Chinese said, okay, every project that didn't ICO, they have to give the choice to the people that they can either keep the coin or they can return the coin and get their original money back.

Was that what happened? Well, I think the Chinese government didn't say there was a choice. The Chinese government wanted to say everybody has to return everything. But then for the coins that went up in value, nobody actually wanted to give it back. And you can't force users, you can't force individuals that way. You can force platforms and project teams because they're kind of more identified entities. But for example, the Binance coin, you went up 10x in value. Nobody really wanted to return it.

And if they did, we said, fine, we'll just buy it back at market value, which is fine for us. But the government forced the projects and the exchanges, but they couldn't force the individuals. Super interesting. So of course, like this sort of brings back the question of why did you go for an ICU in the first place? Why not venture capital? So when we first, I think we kind of conceptualized finance in end of May in 2017, early June. So at that time, the first person actually, the first outside person I actually talked to is Da Hong Fei, the founder of Neil. He's a very good friend of mine, been my good friend for like a few years.

And we were all early blockchanners in the sort of Chinese community thing. So we known each other for quite a few years. So he was actually the So he's the first guy I spoke to And they said look Hongfe I'm thinking about doing this exchange A crypto to crypto exchange I think that's pretty much all I said

And he said okay I want to invest And so he was the very first investor In our organization In Binance And so he So at the time We were thinking about going through the VC route But then

At that early June, I saw another project doing an ICO in China, and I know the founder quite well. And he raised $15 million in 10 days. And then mid-June, I went to a pot-locked dinner organized by Chandler Guo in Chongqing, in China. And everybody there is talking about the ICU. Everybody there said, CZ, you should do an ICO instead of doing VC funding. And when I saw the other ICO done in early June in 10 days, I know the funder really well. I thought to myself, wait a second, if this team can raise $15 million in this period of time,

I'm relatively confident I could as well. I mean, from my reputation, from my execution, just from all around, I think I'm no worse than that team. So I said, okay, let's try it. So we started and then you worked out. Would you say it was a relatively easy ICO for you to do and easy to raise the 15 million? So our ICO process was, looking back, was all relatively smooth, to be honest. But I wouldn't say it's easy. It was one of the most demanding two weeks of my career, I think.

So just to give me an idea, I lost about six kilos in that two weeks. so that's just my body weight so I didn't I didn't sleep at all and so what happened is basically on June 14th on the on the Pollock dinner everyone's like okay

Cizie you got to do the ICO said of fine we're going to do the ICO so after that dinner I made a call to my team who's in a different location and I just said okay we're going to do the ICU and let's start writing the white paper now and we need both Chinese and English versions and it was I think

that was about 11 p.m. and we kind of continued until like 4 p.m. 4 a.m. And then we continued the next day. For the next two or three days, we were just writing this thing. And we were writing the English and Chinese version at the same time. By June 17th, so three days later, we had both versions ready and without the advisor section. And then I started emailing that version out to all my initial advisors. I think I got about 20 of them. in about 24 hours. They basically all said fine, I'll be your advisor. And then we started doing our ICO, and we did five sessions.

Each session lasted about 10 to 15 minutes. So in total, we spent, in terms of the fundraising time, it took us about really literally six an hour-ish in total time to raise about 15 million, but it was spread out over two weeks. But we wanted to raise most of the money on our own platform. So we programmed that platform. We measure people who register our platform first will get the ICO allocations.

So we did a lot of programming. We did the initial site with the user database and everything else during that two weeks. And we actually had a couple of hiccups as well. And originally I thought about doing a around the world tour, like going to San Francisco, New York to do like road shows, going to Shanghai, Shenzhen, Tokyo. We ended up not doing a single road show.

So I stayed in the office the whole time. So instead, we did a few live streams. So we just used the internet, basically. So we didn't really sleep much. And there was a lot of, there was just so much stuff to cover. We had, we started with a, so we had a team of about 30 people, not for like 35, 36 people. So we used that team to do this thing. But then there were so many questions from users.

We created, I think we created about 10 we chat groups, each group holding about only 500 people in about three days. And they were just like so, they were just so much going on. So that was from a demand, from a workload, demand perspective. I think that's one of the toughest periods in terms of workload. There was just so much going on in that two weeks. But the good thing is in two weeks, you raise 15 million, you're done. And so you, or at least you're not worried, you're not too worried about money anymore.

So it's a very intense experience. But I think for any serious entrepreneur who is serious about that project, that experience definitely worth it. So you basically went from potluck dinner, people talking about ICU and you're like, okay, I want to do that. And there was I do that the next day or the same day and then three days of white paper writing and then the ICU or like. And so the time from dinner to ICO actually running was how long?

So I got back to the hotel about 11 p.m. And I called the team saying, we're going to do that. We're going to do the ICO. And to be honest, some of the team members said, what's the ICO? And actually, so before this, before I own ICO, I've never participated in the ICO. I've never done one. I've never advised one. I've never bought ICO coins before.

So to me, like, it was new, but I kind of at least kind of knew what ICO is, but to some of the team members, like who said, okay, please buy the, please contribute to the white paper that said, what's the ICO? So, well, better read about it quickly. So, so, but we got started on the, we got started on the same night. And we just worked until morning. And so three days later, after about seven iterations of the, seven major iterations of the white paper, we, we called. And we just worked until, uh, until morning. And so three days later, three days later, after about seven major iterations of the white paper, we kind of we were happy with both the English and Chinese version. So, and then, so that was, so the Pollock dinner was on July, on June 14th, and we finished the ICA on July 2nd. So that's the whole process. From the, from the, from the minute we decided to do it to like having 15 million US dollars equivalent of crypto in our, in our wallets. And there's actually a couple of guys who, who are very influential in that decision making.

So I met Chris, the founder of Monaco, on the Pollock Dinner on June 14th, in Chengdu, in China. I did not know him before then. So that's the first time meeting him. He said he was in the middle of his ICU. He's already raised about $15 million. I think his target was 20. And he said, look, from his decision to execution, it was 10 days. So he said, you can definitely do it in 10 days.

I was like seriously. So that was like evening, that was like afternoon evening on June 14th, 2017. So. And then he said, no, seriously, you can do it. And I talked to a bunch of other people. They all said, you can do it. I said, okay, let's do it. I think this is a little bit of the answer to like, how did you manage to grow a company,

you know, within like less than a year from nothing to, you know, 200 million revenues, hundreds of employees. is like that speed of execution and decision making is just absolutely insane and extremely impressive to like, you know, so quickly make that decision, move quickly, no time lost on anything. So, yeah, hats off. That's really something, right? Yeah, so I can elaborate on that a little bit if you're interested, basically. So one of the things that I think is very critical is,

we really don't waste a lot of time on decision-making. We spend most of our time on execution. So one of the unique structures in our team is people do give me a lot of respect. And so basically, usually when I make a decision, people just execute. And they're very strong in execution. So they get things done. And they execution is so much faster than usually when they say I am done with something. is usually before I think they could be done with it.

So they usually, they're very strong on the execution side of things. So we have a very simple decision-making process, and we don't really dwell on it. And once we decide, we just execute. So that has always been the finance model. The other thing that's very important is there are a lot of times when we are not exactly sure whether something we do will be beneficial or not,

but we would experiment. We would just do it. And then a lot of times good things happen. So I'll give you another example. For example, when Malta is a country I'm actually not too familiar with before, but we heard good things about that. And it's quite far away from Asia. So when people recommended, I fly there and meet a bunch of guys and find things out.

But to me, it was far away. Things are unclear. I don't really know anybody there, but I flew there to meet the guys and to find out. And that turned out to be a really good decision that helped us, like literally a month later. So there's a lot of those kind of things where you just have to execute.

So that's kind of what we do. You mentioned you guys use a very simple decision-making process. What's that decision-making process? So basically, I tell all my team, if you're very comfortable with the decision you have to make, If you're relatively confident about that decision, then just make it and just execute. If you're not too confident about that decision, then ask two or three people beside you, wherever that is.

You might be your colleagues. It might be your boss. It might be your subordinate. It doesn't matter. And if you're really not sure, then ask me. And I have a decision making philosophy that if I make like 80% good decisions, it's usually okay. as long as the 20% decisions are not fatal, major decisions. So when I make major decisions, I usually consult somebody.

But we also avoid large team decisions. So I specifically say, look, if your decision process involves more than like four people, that's usually a not good way to make decisions. You feel like we never have like 10, 20 people in a room trying to make decisions. that's usually bad. It was a lot of time and you make decisions that are usually compromises.

So we are very, so we keep our decisions process very simple. And sometimes, hey, look, if we make a, if we make a not so good decision, we kind of go sideways, and all we've got to do is make sure that we come back

to our main trunk quickly enough. So that's kind of what we do. So now, like going back to this ICU, So Binance actually took a very unique model with the with the ICO. Because in some senses at that point you were building a centralized exchange and generally we tend to think that coins fit decentralized networks better than centralized exchange businesses. So you bridge the gap using a special model.

So tell us what the model for the Bynetka as network token is. So I think the Binus coin is one of the first tokens that I know of that's used for a centralized business. And it's used in such a way that it's not so much a blockchain business. It's not, it's not, our token is just the ERC20 token so far. And it's used, it has benefits tied to our project. And actually initially, some of the people that I consulted say you probably cannot do an ICO on this because you're not doing a blockchain.

Strictly, it's not a blockchain project. You're building a centralized exchange, which is different. I cannot ignore that. I said, look, if you have a digital blockchain token that people can trust. And if it's associate, if it has association with your project, if your project does well and this token will rise in value, I think that more. model will work. So we tie the token with utility on our platform. So basically, if you hold the token and when you use the token to pay for, when you trade on our platform, we can deduct the trading fees from your token reserve and you'll get a 50% discount. So we adopted

that early model. And later on, when we actually build a decentralized exchange, like a blockchain based exchange, and we can convert that token onto the native token on that, uh, uh, uh, blockchain. So we did that. And it was a relatively novel idea at the time, but I, to me, the economics makes total sense. Some people got it right away. Some people asked a lot of questions, but I think so far it kind of worked out pretty well. And now a lot of, now a lot of people are copying our model, which is great. We want them to copy, like from our token economics model, we want people to copy as much as they can. Yeah. And one thing that you haven't mentioned here in terms of the model, right, is that Binance the company, right?

The finance company makes profits, and those profits, first of all, are like unrelated to the token, although I guess some of them are that you directly earn revenues in the token because people pay less fees if they pay the fees in the token. And then every quarter you spend 20% of the profits in buying the Binance token and destroying it. I mean, that's also a very interesting model, right? because it's almost like a dividend, at least economically. Of course, it doesn't have the downside of a dividend,

which is dividends is probably like taxable income for the recipient, whereas this would be a capital gain thing more. And so, yeah, and of course it directly ties the value of the token to the success of the company, which is clearly very powerful. So, yeah, I think the token economics make a lot of sense of what you've created. Yeah, so actually a lot of people didn't understand the burning part. So that's a very interesting aspect of it because the advanced users or the savvy investors understand it right away, but there's so much misconception around it.

So every quarter we use 20% of our profits and we burn that equivalent value in Binance coins. So, as you said, that removes a lot of the problems, like the taxation, the distribution mechanism. We have to pay network fees, transaction fees. So when we destroy a portion of it, financially, it should be identical to distribute that dividend to other people. But then we are, mechanically, is not a dividend. So we, of course, are always free to destroy our own coins.

Anybody can destroy their own coin if they wish to. When you destroy it, your total supply goes down, and the Binance coin still have to represent the value you was representing before. So this is the exact opposite when you print more money, right? So when you do quantitative easing, you're literally basically taking money away from everybody's people's, every person's bank account. And if you did that, people will complain. But when you print more money, people don't complain for whatever reason, which I kind of don't understand. Yeah, so that's kind of our mechanism to do, to, to, to spread the benefits of our profits to the, to the to the to the user, but without actually doing any, without doing it, without doing the actual sending of money, we just burn what we have. And that works out quite well.

So I'm surprised not more people have copied that model. Many people copy the buyback, but they don't burn, which is kind of cheating. So. But to me, this raises an interesting question. So presumably like you have your company. and that has shareholders, and then you have the token, and then there are token holders. And ultimately in your model, it's like, if one dollar is coming into your company as profit, this dollar must now be split into two communities, the token holders and the shareholders, right?

So like 20% right now goes to the token holders and presumably 80% goes to the shareholders, but in reality for the shareholders is reinvested and things like that. So now you have basically, like these two communities, and their interests might not always be the same. So doesn't this model, like, create the basis, the fault line for a future conflict between these two communities?

There's two points here I kind of want to touch up on. One is the shareholder versus coin holder situation. So the coin holders hold the coins, and we use the profits going to the company. and we use 20% of it to burn, and we basically destroy that, which benefits the coin holders in a indirect way, but very financially applicable, right? But for the shareholders, they retain the other 80%.

We return the other 80% in the company, and we either reinvest into the company development or at a later stage, we may actually do a dividend payout, so which the shareholders will get. get directly. And also the shareholders get a few different things. For example, Binance is a company.

And if the company valuation goes up, the shareholders are benefited. The coin holders, they hold the coins. If the coin value rises up, so there's a couple of different dynamics, right? So basically, for example, if the platform is doing well, and one of the key metrics of doing well is the number of users. So let's say the number of users increased quite a bit.

So now the trading commissions that has to be spent on the platform increases, which increases the utility value of the Binance coin. The Binance coin price will go up. When the finance coin price goes up, the amount of coins that the team holds will go up. So it increase the value to the company. For the shareholders, the platform value also goes up. So there's another benefit to that. So there are different dynamics at play.

But the shareholders don't have the liquidity of the coin holders. So the shareholders, because we're a private company, and they don't have that kind of liquidity, whereas the coin holders, they can choose to sell their coins at any time on our exchange. So there's some interesting dynamics. People still don't really quite understand. And to be honest, I think we're still in early stages

in this type of service. structure. In terms of balancing the benefits, I think that's a very simple thing. We very clearly promised what the benefits of the finance coins are, and we honor that very strictly. So we got we got to make sure that we honor that and usually probably a bit more. So we give incentives to our coin holders very often. The basic part of it is obligation, right? So we make a promise, we're going to keep it. That's just integrity, credibility. That's very, very important. And then we all, we over time, we do other stuff to do, to sort of help our community grow. That's, you can consider that as marketing dollars or helping the community, however you call it,

including the amount of money that we said, we're going to cover the differences for the ICU returns, the $6 million. So that's a decision that as a company, we, as a company operation, we will make us operation team. So how we spend our company money, which affects our shareholder interests. But that's a very common, typical, that's like that exists in any company that doesn't do the ICO. So for me, the separations are very clear. And the different aspects of the balancing the benefits of the, of the two parties are very easy to do. So that's just in our structure. In other structures, it may be a little bit different. So we'll see. Maybe I can explain a situation and see how you would decide.

So in any balance sheet, right, in any account statement, so there's the account statement, the balance sheet, and there's the cash flow statement. So that's true for your company. Now, let's say it's the year 2020. And you're making your account statement. So it's early on in the year. And you're deciding, you're making decisions that are going to impact.

the account statement for 2,020. Now, how much you are going to spend for research and development can determine what ends up as profit. So let's say you make a revenue of, right now it's $800 million in revenue. So let's say you make a revenue of $2 billion. And whether you decide to spend $200 million in R&D or $500 million in R&D is going to determine what gets left as profit. And then whatever gets left as profit, 20% of that goes to the coin holders.

Right. So in some senses like you as CEO have decision-making capability on R&D, that is going to determine how much actually goes to the coin holders. Now, the shareholders obviously want you to do more an R&D because that might create a future product unrelated to the coin holder. So let's say you have a different product idea that is not related to the coin holders at all, but that will benefit the shareholder.

So the shareholders want you to do more R&D, but the coinholders rationally want you to do less R&D because that is greater profits. So I think in that kind of situation, what you described there is a very short-term revision for the short coin holders. So, well, I think there's two things, right? So we should not be, if we're spending the, if we're spending our profits on some other products unrelated to our coin.

And so that benefits our shareholders later. And that doesn't not benefit our coin holders. That's not good. So that's just unethical in my opinion. So that's why you will see that we actually have included many other businesses in Binance. and all of them have used Binance coin. So we did not do another ICO. We did not do.

So we actually have a media platform. We have an ICO platform. We have a, so all of our new businesses are directly tied to Binance Coin. So I think basically you should not use the, we should not use our profits from our exchange to do some other unrelated business that does not benefit our platform. or basically our coin holders. The second thing you describe is the coin holder just want the price to go up without us doing any R&D work.

That doesn't really make sense because if we don't invest in our product, if we don't make new features, if we don't keep our products competitive, and if we don't innovate, over the long run, the coin price will drop. So basically, let's say, we just keep that platform,

If we go to one extreme, you'll be quite easy to understand. Let's say that we do no R&D. That's not good for the coin holders. So let's say we fire all of our developers. And so now we can save costs. So now our profits will go up. But guess what? We will not be competitive.

So Binance.com will stay exactly the same. We'll just keep the operation team and hoping that this way you will give us the highest profit for this quarter. But guess what happens next quarter? Our competitors are going to continue to improve and everybody's going to go to them. And let's say we say, well, okay, no, we want the maximum profits so we don't want to reinvest

and we still don't hire developers. Over like a couple of months later, nobody will be using our platform. Guess what's gonna happen to the coin price or drop to zero? So I think in that, in that, so what you described is just a long term versus short term gain.

And that applies equally to coin holders and shareholders. I think both of them wants platform to be bigger, what wants the platform to have more users or more valuable. When the platform does that, both the coin price will go up and the shareholder value will go up. So I think that this, in the current situation for Binance, I don't see we have that problem at all. So that's kind of my view on that issue.

That makes sense. Now we talked a lot already about Binance. Now let's move a little bit to some general. topics. Now, in particular, one that's very interesting is the topic of regulations. So you started in China, right? So regulations even early on shaped the company, right, in that it kind of shut down your customers and then you decided to start finance. So can you can you just run it through? Like, what are the different ways that regulation has kind of shaped the course of finance up to this point? Sure. I think the different

regulations affect us different ways. Basically we have always adopted a stance where we will not go against any government. We will not go against any regulation. We will always be operating legally in any country, any jurisdiction. So if a country does, if a country's regulation are shaping so that it does either does not allow cryptocurrency businesses or exchanges, we will simply move, we will move to a different country. So, um, And we are looking for countries that have favorable regulations. Interestingly, some of the negative regulations actually helped us a few times. So when the Chinese regulation said no more exchanges in China, they shut down all the exchanges in China,

we luckily moved out right before that. And that was a very lucky decision, to be honest. And when we stayed alive, actually a lot of users came to our platform. And that helped boost our initial user base. And then recently this year, we are seeing a lot more countries who are realizing that favorable regulations towards the blockchain industry would encourage economic development. And now this year we're seeing a lot more favorable regulations coming out.

So now exchanges are legal exchange license in many countries now. now, including the US, including many other, including Malta, including Bermuda, including, hopefully soon, Taiwan. So now we have more, we have a lot more choices to go, including like Africa, Uganda, right? So the regulatory space is actually very, very important, but I think we have gone, we have gone past the point where all countries review blockchain or crypto as negative. I think now a lot of countries realize that this is positive. So now I believe we will see more adoption of,

we'll see more regulatory adoption and more positive regulatory changes in this space, which is gonna be extremely beneficial for Binance. So for Binance, we are looking for countries who have, we're always on the lookout for countries who are extremely positive towards blockchain. So Maltai is extremely positive. I think Bermuda will become very positive very, very soon as well.

So, yeah, so I think before there was always a risk factor to us. People kind of worry about regulations killing this industry. But I think that worry can be pretty much, that worry is gone. Right now, it's just a matter of speed, how fast each country adopts blockchain regulations that are favorable. And I think there's going to be a lot of competition among different jurisdictions. So I think which will be very good for us. So I certainly agree with you, right, that a lot of different countries will see this as an opportunity, right, to attract business. And so we will not have that like, you know, the whole world and all the countries say no.

But if you look at the U.S. where there's been a lot of attention around regulation, right, the U.S. sound of interpretation tends to be very broad. And now if, you know, they say like, okay, let's say somebody has U.S. customers, you know, U.S. regulations apply to them. And in particular with the SEC, there seems to be clearly the trend that they will treat many, if not, you know, the vast majority of token sales as, you know, securities. And, you know, maybe down the line tokens can become, you know, non-securities and tradable. But, you know, of course, securities means, you know, accredited investors, registration, all kinds of stuff like that. So I'm curious, like, how do you deal with that, a finance, both regarding Binance token, but also regarding the, you know, many of the tokens that will be traded on the platform, you know, to have that risk of,

you know, potentially being classified as a security and then, of course, potentially having a regulatory risk towards Binance the company. Sure. So for the security aspect of it, we take a very simple approach. We just ask projects teams to supply a legal opinion stating that they are not a security. So we leave, we leave that legwork to their lawyers. So they need to find a lawyer in whatever jurisdiction they are operating, or their teams are operating. And they basically got to have the legal opinion that they're not a security.

Even that can sometimes have issues because, for example, if the lawyers in one location and sometimes a different jurisdiction, different location may not honor that lawyer's opinion. And then we will ask the project team to say, hey, look, can you get a second lawyer's opinion if needed? So that have happened so far, that have happened. So, but that's a relatively easier problem for us to solve. The, your previous point about basically, for example,

a lot of the regulations right now today are overly strict and overly complex. I think what people don't, what people don't realize just yet is you can't just copy the existing regulations into crypto. That approach is almost guaranteed to not work well. So it's a very simple analogy to it. You don't want to copy how you run a postal office into how you run an email web or an email server. So those are two different businesses. You can't just move one set of management practices onto the next one. So you can't manage internet business the same way as you manage a traditional, say, factory. But I think the different regulators are now slowly understanding this.

So I personally believe that the regulations have to adopt, or the regulators or the regulatory approach have to adopt a new industry. You can't just take the old one onto the new one. Unfortunately, there are different forces at play. Of course, a lot of the regulatory bodies or the regulators, a lot of them may want to retain their power, their influence, etc. So there will be some missteps in this endeavor. Not everybody is going to be making perfect decisions every time. But I think enough people will make good decisions, and the competition will keep the industry going.

So that's just how evolution works. So I'm pretty confident at this point, basically. What specifically attracted you to Malta? Initially, it was one of our users or friends who recommended me to go to Malta and meet with a bunch of relatively senior people. So I went there, but after going there, it becomes very, very clear. Malta understands the importance of leading the next fintech revolution. So they understand, so Malta has traditionally been a financial hub. They were very forward in terms of multiple financial regulations, including the online gaming industry, which including the online poker gambling industry as well.

So they kind of understand this type of industries. And this traditional finance industries have been a little bit of a decline recently around the world. And they kind of felt that as well. And as a relatively small country with limited natural resources, they kind of, they understand they need to, they need to leverage their own management leadership or basically management of the country, management of this, of the industry as well to be able to be able to compete. So they understand this mentality. They have this mentality. They need to service the industry. So when I went there, it was it was very clear from the pre-examination. prime minister down to the current party in power to the opposition party. From to the Ministry of Finance to the Parliament Secretary, everyone wants to make this work.

Everyone knows the importance of properly, healthily grow this blockchain industry. So when I went there, different to many other countries, there was little education that I have to do. I don't have to tell them why, what is a blockchain, how transactions work, what is a token, They understood all of this and more, they know that this is important. They know this is good. So it was a very easy conversation. And after going there and seeing the proposed bill that they had in place, after reading that, all the comments I had to give them was to, you got to make this place a little bit stricter. You can't be too loose here.

So they were overly easy actually on the regulation. So it was quite an easy, it was quite an easy decision afterwards. Very interesting. So actually like this is the interesting piece that now with Binance, I hope Binance succeeds an order of magnitude bigger. And we actually have, you know, like a multi-billion unicorn company that came out of an ICO. And so, you know, like, because like these things will also set examples for for the future, right? So from that sense also, I think as time progresses and successes like Binance emerges,

maybe the value proposition is easier to communicate to regulators as well. One of the, one of the final topics we'd like to get into on this show is the topic of decentralized exchange and Binance's plans up therein. So like many people think that in the medium to long term, at least in the crypto to crypto space, exchanges between users will be decentralized rather than centralized as they are today. What are your thoughts on this topic and where the future lies for crypto to crypto exchanges? Sure.

So just back on our first point a little bit. Yeah, I'm very honored to be to be. to have Binance be the example people look and follow and learn. So that's a really good thing. So we're very happy for that to happen. And I really want to see more and more unicorns going through this model. And I think we will see that very, very soon. I think we're going to see many unicorns going through the ICO model,

which may or may not be blockchain-based project. But the more startup, the more unicorns they are, the more quicker our overall economic or technology developments are. So I'm very hopeful to that. In terms of decentralized exchanges, I think both centralized exchanges and decentralized exchanges will exist for quite a while. I think decentralized exchanges in concept is quite good, but in practice or in real life,

there are some shortcomings in terms of what the technology capabilities are, and you will take a while for them to fully eliminate. centralized exchanges. So for finance, we are doing both. But of course, we do the centralized one first. So conceptually, decentralized exchange have many benefits. The exchange does not have the whole custody of the user's funds. The user can stay anonymous. Everything happens on the blockchain, so there's no regulation. There will be little regulation. So it's more, it's freer. is there's higher degrees of freedom. But in reality,

when you have a blockchain, that means there's a network computers that need to synchronize with each other. That itself, by default, will be slower than a single computer making a decision, save the results, and you're done. So for the foreseeable future, the centralized exchanges will always be faster.

And also from a competitive point of view, say if we want to do a decentralized Uber, right? So technically it can be done. I think conceptually it can be done. But guess what? If we have a centralized Uber right now, if the decentralized one is kind of gaining momentum, the centralized one could say,

we're going to run a campaign. We're going to rebate $10 for every ride you take. And the decentralized one is going to be kind of hard to do that. So with a decentralized organization, you have to really plan ahead on how your ecosystem works. And you can't do this short-term quick adjustments on marketing campaigns, free gifts and a lot of this stuff.

So technology-wise, until the decentralized exchange should become fast enough, they will not have the liquidity that the centralized exchanges do. And liquidity matters a lot when you trade. A high liquidity exchange where there's very deep books, you can buy and sell very large quantities without moving the price,

and which will basically save you a lot of money. So for the short term, centralized exchanges will be there, and they will serve different purposes. Over the long run, I think eventually decentralized exchange probably will become the norm when the technology gets better. So, and we're very happy for that to happen, and we are making our own decentralized exchanges. So we have multiple implementations of our decentralized exchange. And we're actually promoting other decentralized exchange implementations as well. So we want others to try to disrupt us, and at the same time, we're trying to disrupt ourselves.

ourselves. So we'll see how that goes. But I think that's going to take a few years. So this actually does kind of tie into something I wanted to ask about before, but then didn't get to. So you mentioned, okay, let's say you had a decentralized Uber, then some of the decision making, let's say marketing spend, you know, gets maybe more complex. And of course there is the idea of having, you know, decentralized autonomous organization, basic entire organizations where then coin holders can, you know, participate in the decision-making. And do you think in the long run, actually, Binance as a company will also move towards a more decentralized model so that, you know, maybe it could be fully decentralized?

Yes, absolutely. We are trying very seriously to turn Binance from a company into a community. So, but I think the transition will take some time. So we first turn into from a pure company into like distributed teams, distributed people working around the globe on Binance. The second step would be, let's say we would want our Binance chan, our decentralized engineering implementation to be live first. In the earlier, in the earlier version of that,

some of the decision-making or a governance of the development may still be lie very heavily with the core team. But over time, we actually want to shift a lot of the governance out towards the community. So even today, even in our centralized exchange, we rely on a very large number of volunteers, what we call the Binance Angels, to run our community and our ecosystem, really. So we are exploring multiple ways, both in the centralized, and decentralized models to be more decentralized, to be more community-based. So I think that's going to be a theme we will continue to push.

And in my mind, I'm really hoping five or ten years later, it will be a fully decentralized thing, where hopefully I don't have to do anything. I just hold my coins and do video interviews here and there, and the whole thing runs itself. I'll be very happy. So that's kind of the ultimate goal. So, like you mentioned that Binance might disrupt itself, right?

Like you might invest on decentralized exchanges and build some of your own. Do you have any thoughts on what the design for your decentralized exchange would look like? Sure. So we encourage almost every kind of decentralized exchange and we list them, we help them get liquidity, we promote them. But for the Binance chain, my philosophy is quite simple. We want to do a chain that issues tokens and trace tokens. So those are the two main features we want to do. So from my perspective, I think that's very important.

So our chain will not have a lot of complicated or advanced features. A lot of these other chains have really strong smart contracts, different meta platforms, sidechains, they have all this bells and whistles. I think the Bynes chain will be more focused on the actual exchange feature. So we want to be able to trade one token against another, but we want to focus more on performance and speed. It is my belief that for exchange, performance is probably more important than features.

I mean, today, even if you look at Binance Exchange, we actually have less features than some of the other exchange platforms. But we are fast, and people like the faster aspects of it. So that's kind of, you know, at a very high level, the design decisions that's driving our Chan design. Okay, so you actually see the Binance chain and also functioning as kind of an ICO chain where you can issue tokens, you know, maybe a little bit like an Ethereum, you have a U.S.C.20. standard which has been very powerful in issuing tokens and doing ICOs. So if you could do that on the Binance chain and I know you guys have done some work in helping people do ICOs, then you can issue them on there and trade them straight away. So that's exactly the idea. So with the Ethereum, you can do a lot more

other stuff. The smart contract solidity, you can do a lot of other stuff. So our our aim is more of a more of a specialized chain where it's issue tokens and trade tokens. And so we will not have all the bells and whistles of the Ethereum, but we probably want our blockchain to be faster in terms of a higher capacity in terms of processing capability. Cool. Well, this is fascinating. So let's do one last thing, one last question kind of before we wrap up. So what do you fault on the kind of crypto markets? Like, where do you see things going in next year?

Do you think we're going to see a lot of growth or how is regulation going to affect this? Like what are your kind of expectations for how the space will evolve? Sure. So I think in terms of regulations, as I said just a little bit earlier, I think we'll see more and more countries adopting more and more favorable regulations and more and more smarter regulations or more fit regulations for the blockchain industry. So I think this will be extremely positive for the entire industry development and progress. From the ecosystem side, I think we will see a lot more coins.

So I think more and more projects are going to, a lot more projects are going to use ICOs to raise money than traditional VC routes. So as a result of that, we're going to see a lot more coins. With a lot more coins, we're going to need exchanges to provide equity to all of those coins or change between the coins. So I think exchanges will continue to provide a very important role. I think we're going to see a lot more exchanges as well. And the other thing that's in terms of the ecosystem, we need to see a lot more wallets. Right now, I think there's still a lot of improvements

or room for improvement in the wallet space. We need different type of wallets, hardware, software, more secure, industrial, wallets that can handle millions of addresses, millions of transactions in one installation. So that aspect of it, I think we will see a lot more wallets. I think mining is a industry. I kind of understand, but don't really know them in detail. And it's a very big, very important industry.

So I think things will continue to happen there, but I'm not an expert. We should see a lot more payment gateways, a lot more merchants, a lot more merchant adoption. So I think in all of these areas, we'll. see a lot more growth. I think basically the current exchanges are going to get probably 100 to a thousand times bigger over the next few years. So I think that's mainly going to be as a result of the industry getting 100,000 times bigger. And when the industry does that, the coin price is probably going to do similar things. So I don't really want to make any like sort of hard predictions on where the coin price is going to be.

But I think we have a lot of room to grow. Cool. Fantastic. Well, thanks so much for coming on. That was absolutely fascinating, interesting conversation and loved learning more about Binance and what you've built there. So thanks so much for joining us today. Thank you very much for having me here.

It's a pleasure. So, of course, we're going to have show notes, so links to Binance and some of the resources around finance. If people want to learn more, use the platform and trade on that. So there will be lots to check out. And thanks so much for the listener for once again tuning in. So we put out new episodes of Episputner every week. You can subscribe to the show on iTunes,

SoundCloud, your favorite podcast app, or watch the videos on YouTube.com slash Episenter Bitcoin. And yeah, if you want to support the show, you can leave us an iTunes review and otherwise, thanks so much for the quote to being back next week.