Changpeng Zhao, or “CZ” as he’s commonly called, is the founder and CEO of the cryptocurrency exchange Binance. With an estimated net worth of $1.9 billion, CZ is one of the wealthiest people in crypto. That being the case, money isn’t the primary reason that we’ve ranked CZ at second spot in our Exodus top 10 most influential people in crypto series.
CZ is one of the most influential people in the industry because Binance has contributed so heavily to expanding the cryptocurrency ecosystem. Binance is one of the most popular exchanges in the world and the platform is continually keeping up to date with their wide range of products.
In this article, we’ll cover the founding of Binance, why the exchange has become so popular and how CZ’s vision for blockchain technology continues to shape the cryptocurrency industry as we know it.
CZ’s Early Career and the Founding Binance
CZ was born in Shanghai but his family moved to Canada when he was a child. After high school CZ studied computer science at McGill University, and during his time in Montreal he even had the proverbial job at McDonald’s!
After university CZ spent four years at the Tokyo Stock Exchange matching trade orders. He then moved to New York where he spent four years working at Bloomberg Tradebook, handling futures trading. In 2005 CZ quit his job and moved to Shanghai to found Fusion System, a new company offering trading software to global banks. The business was successful and CZ spent eight years at the company before getting involved with crypto in 2013.
Upon discovering blockchain technology, CZ quickly realized its potential and in 2013 sold his apartment and used the money to buy Bitcoin. Prior to founding Binance, CZ served as the CTO of OkCoin for 9 months. Ultimately though, CZ wanted to create his own blockchain company, all he needed was a way to get it funded.
According to Binance’s website, in 2017 CZ developed the first version of the Binance exchange with his co-founder Yi He. The two men were able to build their own exchange without VC money or the backing of big banks, thanks to the ICO boom. Throughout 2017 ICOs were incredibly popular and tens of billions of dollars were getting raised by hundreds of projects.
Ultimately a vast majority of those projects would turn out to be worthless, however, a few have stood the test of time. Cardano’s ADA, Chainlink’s LINK and Binance’s BNB have all thrived and investors who bought the tokens in 2017 are doing quite well.
CZ and Yi He raised $15 million from their ICO, selling 100 million BNB tokens. According to the terms of the sale, 35% of the money would go towards building the exchange, 50% to marketing and a further 15% set aside as an emergency fund.
Binance was officially launched in July of 2014, just months before the peak of the 2017 bull market. As a brand new exchange Binance had to do something different if they were going to draw users away from more established platforms like Coinbase and Kraken. Binance’s solution was to do what the other exchanges couldn’t: list hundreds of tokens and undercut the competition’s trading fees. This approach quickly attracted attention and within six months Binance had picked up three million users.
When it comes to trading, whether it’s corn futures or crypto, liquidity begets liquidity. Traders follow the money, so when trading volumes go up it can create a positive feedback loop of growth. That’s exactly what happened to Binance, and it’s why the exchange was able to cement itself as one of crypto’s most important platforms just one year after its launch.
How Binance has Grown its Reach
Under CZ’s leadership, Binance has focused relentlessly on growth and expanding its range of services. In April of 2020 Binance bought CoinMarketCap, which now ranks as the 101st most popular website on the internet in terms of engagement.
According to CZ, “CoinMarketCap has more users than any other product in the crypto space. Even though their money generation mechanism is not as strong as Binance, they do have the users – it’s a very valuable platform.”
Just about anyone in the world could use Binance when it first launched. However, as regulatory pressure increased it became apparent that Binance would no longer be able to continue serving all of its users. To address part of that concern, the exchange launched the Binance.us subsidiary for American traders and investors.
Next Generation Technologies
Decentralized exchanges (DEXes) are going to be one of the biggest competitors to centralized platforms like Binance and Coinbase. Rather than fight the future, under CZ’s guidance Binance has embraced this new technology. Binance was the first major centralized exchange to launch its own decentralized platform. The Binance DEX is a non-custodial exchange that hosts dozens of assets that trade against the BNB token. Here’s how CZ describes it:
“Binance DEX is a decentralized exchange developed on top of Binance Chain, with low latency, high throughput, low fees and UX similar to current centralized exchanges. Oh, and you hold your keys or funds yourself. No need to deposit your funds at an exchange. The purpose of Binance Chain and DEX is to create an alternative marketplace for issuing and trading digital assets, and grow the blockchain token economy.”
The Limitations of Decentralized Exchanges
Creating a new technology that could disrupt your core business is a bold move, but as a crypto user CZ believes in technology. However, he is also careful to point out the limitations of a DEX and why some customers may prefer the centralized experience.
According to CZ, “Today the majority of users still choose a centralized exchange because it’s much easier to deal with an email and password and have customer support than saying do a backup of your own keys and if you lose it you’re screwed. I do think if we can make the secure backup easier and usable, I think DEX is going to be the future.”
CZ has also Tweeted, “Let's support decentralized futures exchanges. The future!” Which is a statement one wouldn’t expect to hear from the CEO of a centralized exchange. One of the reasons that CZ has so much influence is that he comes across as someone who is interested in what’s best for the cryptocurrency ecosystem as a whole, not just what’s best for Binance.
BSC: Binance Smart Chain
The Binance Smart Chain (BSC) is another key part of Binance’s growth plan. The blockchain is based on the Ethereum virtual machine (EVM) and currently has $21 billion of value locked. Just like Ethereum or Cardano, BSC hosts smart contracts and has its own set of dApps, the most popular of which is PancakeSwap. BSC has experienced explosive growth in the last year as thousands of people have left Ethereum due to the high fees.
How CZ’s Influence has Shaped the Cryptocurrency Industry
Under CZ’s leadership, Binance has become arguably the most innovative cryptocurrency exchange in the industry. Often a feature is introduced on Binance, and then other exchanges copy it six months later. Binance pioneered the idea of an exchange token with BNB, and only later did other exchanges like Kucoin and Huobi introduce their own tokens.
Binance was also the first exchange to take altcoins seriously, rather than just focusing on the big projects like BTC, ETH, LCT, BCH, etc. Binance listed dozens and eventually hundreds of tokens, which forced other exchanges like Coinbase to expand their trading pairs as well.
In addition, Binance pioneered the idea of an exchange launchpad. The Binance launchpad is a program that gives crypto teams access to the guidance and funding that they need to develop and launch their projects. Once a project is finished the token is automatically listed on Binance.
With an eye toward the future, here’s CZ describing what he believes to be blockchain’s most important feature. “I believe strongly that fundraising on the blockchain is a killer app, and one that will reshape the future of entrepreneurial growth path, the blockchain landscape, and economies around the world. It is such a powerful tool that if used badly, will hurt people. But if used properly, can be tremendously beneficial for us.”
Who will take gold in the Exodus Top 10 Most Influential People in Crypto?
CZ is at the number two spot, which means there’s just one person left in our Exodus top 10 most influential people in crypto series.
Stay tuned till next week to find out who’s going to be top of the crypto heap.
Top 10 Most Influential People in Crypto; the countdown:
10) Vinny Lingham
9) Kathleen Breitman
8) Gavin Wood
7) Elizabeth Stark
6) Andre Cronje
5) Michael Saylor
4) Brian Armstrong
3) Charles Hoskinson
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.