Arcane Research Senior Analyst Explains Why ‘Binance Is the Clear Winner of 2022’

On Friday (30 December 2022), Vetle Lunde, a Senior Analyst at Arcane Research, the research arm of Oslo-based crypto investment firm Arcane Assets AS, highlighted Binance’s impressive list of achievements in 2022.

Lunde wrote:

No matter how you look at it in terms of trading activity, Binance dominates the crypto market. 92% of spot volume 66% of global perp volume 49% of global perp OI 61% of BTC perp/futures volume 30% of BTC perp/futures OI Binance is the clear winner of 2022. 92% of spot volume. After Binance lifted trading fees for its BTC spot pairs this summer, the exchange has completely overtaken the BTC spot volume. We have to go all the way back to Mt. Gox’s heydays to find a period where a single exchange dominated in a similar fashion.

66% of global perp volume. Until November, Binance represented 55% of the trading volume in perps, but following FTX’s collapse, more or less all market share in perp trading was overtaken by Binance, leading to rapid and prevailing growth in market dominance. 49% of global perp OI. Binance represents nearly half of the total open interest across crypto perps. Similar to what we saw in volumes, Binance’s dominance gained the most significant market share following the FTX collapse.

61% of BTC perp and futures volume. Binance dominance is nearly as high within BTC as it is across all crypto perps. Binance’s share of the market has only grown throughout the year, and more or less, the entire market share of FTX fled to Binance in November. 30% of BTC perp and futures OI. Binance dominance in BTC futures and perps is less pronounced than its dominance in the crypto perp market. Nonetheless, Binance has been the market leader throughout the year maintaining a market share of 25-35% of the OI in BTC derivatives.

Additional Binance wins of the year: 1. Taken market share in the stablecoin market 2. BNB vastly outperforms BTC and ETH 3. Been a clear outlier in employment, doubling its employee stack in a year when several competitors have laid off half its workforce or gone bankrupt.

On 29 December 2022, Cointelegraph reported that “German car manufacturer BMW plans to integrate blockchain technology into its daily operations and create a blockchain loyalty program for its customers in Thailand.” Apparently, “the popular carmaker has onboarded blockchain infrastructure firm Coinweb as its decentralized architecture provider and BNB Chain for settling transactions.”

On 28 December 2022, Binance Co-Founder and CEO Changpeng Zhao (aka “CZ”) published a blog post (titled “A Letter From Our CEO: 2022, the Year of Resilience”), in which he said “2022 gave us many more reasons to be optimistic than any other year on record as both the industry and Binance demonstrated remarkable resilience and tenacity.”

CZ went on to say:

One of the key metrics with which our industry measures its success is adoption rates. Amid all challenges of 2022, blockchain adoption never stopped, with individuals and institutions across the globe continuing to jump into the fray…

Perhaps most importantly, in 2022 the crypto industry has made massive strides in yet another domain that is fundamental to both mainstream adoption and user security: regulatory compliance. I am proud to say that Binance has been and will remain at the forefront of this momentum…

The industry, in my view, will be managing the fallout from the FTX implosion for a prolonged period of time. Much work lies ahead to show that the blockchain space is not defined by high-profile bad actors. In terms of market health, every bear market is better than the last, and I expect the industry to recover relatively quickly.

As for Binance’s Key Highlights of 2022, CZ said:

As of the end of 2022, Binance has secured 14 registrations and authorizations in jurisdictions spanning five continents, including Colombia*, Abu Dhabi, Bahrain, Dubai, South Africa, France, Italy, Spain, Poland, Lithuania, Cyprus, Kazakhstan, Australia, and New Zealand. Our compliance team grew from 500 to 750 people in 2022…

Binance rolled out a series of transparency initiatives. We shared details of our hot and cold wallet addresses and introduced a Merkle tree-based proof-of-reserves (PoR) system designed to show that we hold enough funds to back all user assets at a 1:1 ratio…

In 2022, our security and investigations team responded to over 47,000 law enforcement requests in addition to organizing and participating in over 70 anti-cybercrime workshops for global investigators and cybercrime fighters… In 2022, we continued improving our security systems and introducing more rigorous identity verification protocols…

In 2022, a total of 26 million people used Binance Academy to get a better understanding of digital assets. Furthermore, the Academy team brought crypto and Web3 education to 73 universities (25 in North America, 23 in the EU, 20 in MENA and APAC, and 5 in Latin America), reaching more than 5,500 students.

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