Binance Labs

Binance Labs was the venture capital and incubation arm of Binance, the cryptocurrency exchange. Founded in 2018, it invested in early-stage blockchain, crypto and Web3 projects, ran incubation programmes for founders and supported projects building on BNB Chain. It became one of the most active investors in the crypto industry, backing hundreds of companies and protocols across exchanges, infrastructure, decentralized finance and gaming.

In January 2025, Binance Labs was renamed YZi Labs, a name drawn from those of Binance co-founders Yi He and Changpeng Zhao. The change reflected its separation from the Binance exchange and a widened remit that, according to its announcements, includes artificial intelligence and biotechnology as well as crypto. Binance Labs is often mentioned alongside other exchange-linked funds, as such funds can combine investment, listing and ecosystem interests in ways that raise questions about conflicts.

Picture a large shopping centre that also runs a fund to back new shops. It gives promising shopkeepers money, advice and introductions in return for a share of their business, and many of those shops end up opening in the same centre. The centre benefits twice: from its share of the shops' profits and from the crowds they bring.

Binance Labs worked in a similar way for crypto. It funded new projects, helped them grow and often encouraged them to build on Binance's own blockchain. Successful projects could bring users and activity to the Binance ecosystem. Like any venture capital fund, it expected most bets to fail and a few to succeed spectacularly.

Binance was founded in 2017 and grew quickly into the world's largest crypto exchange by trading volume. Binance Labs was launched in 2018, initially focused on incubating early teams through a programme in which selected founders received funding, mentoring and access to Binance's network. The fund widened into seed and later-stage investing and launched an accelerator called Most Valuable Builder with BNB Chain. Its portfolio came to include projects such as Polygon and 1inch, and in April 2022 it led a $150 million funding round for Sky Mavis, the developer of Axie Infinity, after the hack of the Ronin bridge. The 2025 rebrand to YZi Labs followed a period of regulatory pressure on Binance, including its November 2023 settlement with US authorities, under which Changpeng Zhao stepped down as Binance's chief executive.

The fund used several channels:

• Incubation. Cohort-based programmes gave early teams capital, mentoring and help with product, token design and fundraising.
• Direct investment. It took equity stakes, token allocations or both, often through a SAFE or token warrants.
• Ecosystem funds. Dedicated pools supported projects building on BNB Chain.
• Strategic deals. Larger rounds backed established companies and infrastructure providers.

Tokens of some portfolio projects were later sold to the public through Binance Launchpad or listed on the Binance exchange, which created a pathway from incubation to trading. Investors in early rounds typically face token unlock schedules that release their holdings over time.

Over its life the fund spread its bets across most parts of the crypto industry. Investments ranged from base-layer networks and layer 2 scaling projects to decentralized exchanges, lending protocols, wallets, data and oracle providers, and gaming studios. In bear markets it continued to invest, presenting itself as a long-term backer, and in boom periods it competed with other large crypto funds for allocations in popular rounds. Public announcements typically gave the name of the project and, sometimes, the size of the round, but rarely the valuation or terms, so outsiders could not easily judge the fund's returns. After the rebrand, YZi Labs said it would continue to support crypto founders while adding new areas.

Binance Labs helped build demand for BNB and BNB Chain by funding applications that run on it, a strategy similar to other exchange or foundation ecosystem funds. This gave portfolio projects visibility and potential access to millions of exchange users. It also created an overlap of roles, since the same group could invest in a project, help design its tokenomics, promote its token sale and decide on exchange listings. Binance stated that its listing teams operated independently of the investment arm, but observers continued to watch the relationship closely, especially after YZi Labs became formally separate.

Exchange-linked venture funds face recurring criticism. Critics argue that early investors often receive tokens at very low prices, while retail buyers pay much higher prices after listing, and that large unlocks can weigh on prices. Questions about conflicts of interest arise when an exchange's investment arm backs projects that later list on the same exchange. Some portfolio projects have failed, been hacked or seen their tokens lose most of their value, which is common in early-stage crypto investing. Regulatory actions against Binance in several jurisdictions also cast uncertainty over affiliated businesses. For investors, the involvement of a well-known fund is not evidence that a token is sound; it is one factor alongside the project's product, team, governance and the risks covered in initial exchange offerings.

• YZi Labs