Exclusive revelation of the exchange pump new user rules: buy a new user for 50 dollars

null Author: Odaily

Late at night, after finishing a day of crypto trading, you lie exhausted in bed and open Tinder to pair with a stranger for a wonderful date. Suddenly, an advertisement from a crypto exchange appears, stating “Complete your first trade to instantly receive xxx USDT reward.” You can't help but feel disappointed. Unable to sleep, you open a video website to watch an episode of your favorite TV series, but just as the plot reaches its climax, a 15-second ad interrupts you, and it's not from the Macau Grand Lisboa but from another crypto exchange. At this point, you finally can't hold back and curse, “F**k you, crypto!”

Cryptocurrency exchanges are intruding into the daily lives of ordinary people through advertising, and behind this is the growth ambition of CEX.

According to Binance's official disclosure, its global registered users on the platform will exceed 250 million by the end of 2024, representing an approximately 47% increase compared to 2023. Although this achievement is impressive, it also means that for top exchanges, the number of new users provided by the industry is becoming saturated. To acquire new users, it is essential to actively stimulate demand from consumers outside of cryptocurrency and extend customer acquisition efforts into Web2.

Who is quietly advertising to us?

To meet the ambitions of the exchange, it is a lesser-known growth department—Paid ads—that is placing advertisements in our corner of cyber life.

“In the exchange, we are a department parallel to BD, both responsible for user growth, but we engage with users through paid advertising,” said Hamburger (pseudonym), who works in Paid ads at a certain exchange, to Odaily.

The “traditional crypto users” usually interact the most with exchange BDs. They not only connect with B-side projects but also engage deeply with C-side communities, maintaining good relationships with KOLs, website owners, and rebate team leaders. Sometimes, they even play the role of customer service, helping ordinary users with their problems. Some BDs from large exchanges also grow into KOLs, leveraging their personal influence to amplify user growth.

However, as user growth in the industry hits a bottleneck, the role of BD has become increasingly limited. The difficulty of reaching new users is growing, and maintaining existing customer relationships, while differentiating to outmaneuver competitors, has become the daily task of BD.

Thus, when conventional user growth methods approached failure, paid ads became the lifeline for the exchange's user growth.

The goal of paid ads is to acquire qualified traffic or users (installations, registrations, transactions, leads) through paid channels at the lowest/optimal cost, and to convert the advertising effectiveness into measurable business growth.

“We will purchase advertising resources and display positions on media platforms such as the Apple Store, Google, Tiktok, and Facebook, according to the algorithms and audience targeting of the media platforms themselves, bringing some new users to our exchange,” explained Hamburg.

Different growth methods also determine the size of the team. According to Hamburg, although Paid ads and BD are parallel departments, there is a significant difference in numbers. “Take our exchange as an example, there are no more than 20 colleagues globally engaged in Paid ads business.”

Although the number of people is small, it is still completely sufficient. Paid advertising is divided into self-investment and agency investment. Self-investment means that the exchange's Paid ads team collaborates with media platforms, uploads materials, sets up advertisements, monitors performance, and makes real-time adjustments; agency investment means entrusting the advertising work to an agency. This model can meet the needs of a small team but with multiple advertising platforms.

The use of paid ads in the exchange field is not a recent occurrence, but it has only been widely invested in in recent years. According to insiders, Binance began experimenting with paid ads in 2021-2022, but did not start a large-scale investment until 2024, while OKX entered the field even earlier than Binance.

“The annual budget for paid ads at a medium-sized exchange is around 2 million USD, while a large exchange would spend even more,” Hamburg explained to Odaily regarding the budget of exchanges for paid advertising, but due to confidentiality reasons, he declined to disclose the annual budget of his own exchange.

However, regardless, compared to the advertising budgets of Web2 giants, the investment from cryptocurrency exchanges is minimal. According to public data, Google's advertising budget for 2025 is approximately $8.7 billion, while Amazon's advertising budget is $31 billion, and Netflix's advertising expenditure in 2024 will exceed $1.7 billion.

Although there is a gap in profitability, this also indicates that the user growth model for Paid ads is still in the early stages and has not matured for CEX. “In theory, the demand for Paid ads from top exchanges is significant, and as long as the results are good enough, the budget can be limitless,” Hamburg confidently stated.

Ideally, $50 to bring in a new user

According to Hamburg, the advertisements they have launched are indeed effective for new user growth. One of the benefits of Paid ads compared to BD is the ability to clearly calculate ROI (Odaily note: ROI is the return on investment, measuring how much net profit can be generated for every 1 yuan invested), which allows for the evaluation of the effectiveness of advertising on different media platforms. If a platform's user profile is younger and has a higher acceptance of cryptocurrency, then the advertising effectiveness will be better.

“A typical example is the Apple App Store, where advertising performance is better, while the advertising performance for mobile manufacturers is not good,” said Hamburger. “However, taking large media platforms as an example, based on conversion, achieving 50 dollars per new user is already a good situation.”

Although this sounds costly, Hamburger explained that from an ROI perspective, if a budget of 1 million dollars is invested, it can take up to 6 months to correct the ROI.

At the same time, the effectiveness of advertising placement is also related to the materials used. Generally speaking, for new users, advertisements containing benefits, such as first transaction rewards, are used. Additionally, Han Burger stated that advertisements promoting the advantages of cryptocurrencies and the historical investment returns of Bitcoin are also relatively easier to attract external users.

Regulation is still the main obstacle to the development of paid ads in the crypto space.

At the end of 2024, I was taking a taxi in Beijing and passed by the Liaoning Building. A friend beside me pointed at it and said, “If you did advertising placement in Web2 10 years ago and never entered this building, you might as well not have entered the industry at all.” My friend was describing a golden era of advertising placement in Web2, but 10 years later, the spring of advertising placement in Web3 has still not arrived.

“Due to different countries and policy restrictions, some major media platforms are still resisting advertising for Web3,” Hamburg revealed to Odaily. For instance, countries and regions such as the United States, Hong Kong, the United Kingdom, and Canada have explicitly prohibited unqualified exchanges from advertising. Moreover, the advertising policy restrictions vary for different exchange products, where spot trading might be allowed while futures or stablecoin investment products might not be allowed. Some exchanges may use disguised materials to bypass the review, but the risk is very high.

However, there are also countries and regions that are more friendly to crypto advertising, such as South Korea, Vietnam, and Turkey, where regulations are relatively lax and the consumption of advertising is also substantial.

However, on a global scale, regulators remain cautious about the advertising spending of exchanges, which is one of the main reasons why the scale of exchange advertising cannot compare with that of Web2 companies.

The biggest problem with Web3: not enough older users, not enough newcomers.

Despite the current situation, Hamburg remains confident about the future advertising prospects of exchanges. “The biggest problem in Web3 is still the user growth issue,” and Hamburg believes that top-tier exchanges in the entire cryptocurrency industry have both the demand and the responsibility to use Paid ads for user growth.

Under the intertwined uncertainties of regulation, costs, and conversions, Web3 is still in the exploratory phase of acquiring new users through means such as Paid ads. However, as user growth hits a bottleneck, for mature large platforms, it is no longer an option but a necessary move.

The next stage of competition is not only about whose budget is stronger, but also about who understands the users better and who understands growth better. The real contest may have just begun.