Binance’s Zero-Fee Trading Adventure Unraveled: A Closer Look

• Binance’s zero-fee trading expansion led to a surge in trade volumes with the introduction of BTC zero-fee trading in July 2022.
• Despite gaining market dominance, Binance faced potential revenue challenges, as revealed by Kaiko data.
• Binance’s market share reached an all-time high of around 70% until the zero fee trading ended in March 2023.

Over the past year, Binance, one of the leading cryptocurrency exchanges, implemented a significant expansion of its zero-fee trading promotions, covering 13 BTC pairs. The move resulted in an immediate boost in trade volumes, with the introduction of BTC zero-fee trading in July 2022 leading to all-time high trading activity, according to Kaiko’s recent report.

However, data from the smart data research platform Kaiko suggests that while these promotions aided Binance in gaining market dominance, they also came with potential revenue challenges. Zero-fee trading volumes experienced a decline, indicating possible revenue implications during this period.

Despite this, Binance’s market share witnessed a noteworthy increase, reaching an all-time high of around 70% relative to its major competitors. The exchange consistently maintained monthly volumes above $300 billion throughout 2022, contributing to its market share growth as mentioned in the Kaiko report.

Data from Kaiko shows that at the peak of its zero-fee promotions in September 2022, an impressive 85% of the total weekly trade volume comprised zero-fee trades. This trend persisted until the promotion’s conclusion in March 2023.

Following that, Binance adopted a more selective approach to zero-fee trading, primarily focusing on TUSD (a stablecoin used as a substitute for BUSD after Paxos faced issuance disruptions). BTC-TUSD emerged as the highest-volume pair across all exchanges, witnessing over $10 billion in weekly trading volume.

Although Binance successfully achieved its goal of increasing market share through these promotions, the overall slump in crypto trading activity over the past year may have limited the intended impact on fee-generating trading activity, according to Kaiko.

In other Binance news, the exchange is set to expand its presence in Japan with a listing of 34 tokens, including its native token, BNB. The report was initially shared on the local media platform Coinpost.