Binance is the largest exchange by volume of trading in cryptocurrency and its derivatives. But trading in cryptocurrencies is not everything – the site gathers almost all possible tools and services for working with digital currencies, virtual values, decentralized finance.
Let’s take a look at the Binance exchange, what offers it provides and how convenient it is in terms of trading.
- About the exchange
- Working on Binance
- Binance Fees
- Registration and verification
- How safe the Exchange is
- Regulation of Binance
- Advantages and Disadvantages
- For whom is Binance intended for?
About the exchange
Thanks to its large trading volumes, it can conduct the largest deals. The site is run by Changpen Zhao, one of the most famous people in the cryptocurrency industry.
Binance appeared in 2017, it was created by people from the team of OKCoin, another cryptocurrency exchange. Its story began with an ICO, which attracted $15 million to create the site. Startup capital was obtained by selling the Binance Coin (BNB) cryptocurrency. The currency was initially built on the Ethereum blockchain, later switching to its own.
It took six months to become an industry leader. The platform has attracted users with low fees, a user-friendly interface, and a focus on residents not only from the U.S. and Europe, but also from other, less popular countries.
Initially, Binance did not work with traditional money, the account could be deposited only in cryptocurrency.
Working on Binance
Binance is designed for the widest public: the exchange provides a simple trading interface, a great number of funding facilities, and educational materials. There are quite original features like a special design theme for people with colorblindness.
Trading on Binance is possible in many ways: through the official website, the exchange’s own desktop app, third-party clients, and a mobile app.
The main one is the “Classic” trading with a chart, a table of financial quotes, buy and sell buttons, selection of order type.
For a simple cryptocurrency exchange, there is a simplified function “Conversion”, which works without fees providing a simple choice of cryptocurrencies.
According to the trading platform, you can see that the exchange is focused on maximum ease of operation. The developers have tried to make as many functions as possible pass “in one click” or with a minimum number of steps.
Binance has a huge selection of cryptocurrency futures. Trading volumes exceed spot transaction volumes. Good liquidity is available for almost all futures, which makes trading convenient. The contracts are divided into 2 types: USDT-M (calculated in stablecoin USDT) and Coin-M (calculated in Bitcoin or altcoins).
Binance is not just an exchange but an entire ecosystem for working with cryptocurrency. It consists of dozens of services, which make life easier for cryptocurrency users or allow them to make profit.
The feature allows users to conduct cryptocurrency and fiat money transactions with each other. It does not require placing orders in the trading section of the exchange. Binance charges zero fees, and fiat money is debited directly from a bank card or e-wallet linked to the exchange.
Users can both post ads for the desired exchange direction as well as choose from existing ones. In the P2P exchange section, a special chat for counterparties is implemented.
The feature allows you to invest cryptocurrency for passive income. It is accrued daily, in some cases, the income can exceed 80% per annum. More than 100 cryptocurrencies are available for staking, which can be invested for a short period of time (10 days and more).
Non-fungible tokens (NFT) have been traded on Binance since 2021. They are supposed to unite artists enthusiastic about cryptocurrency. There are several types of products: events (sales of NFTs from famous artists), marketplace (to create and sell own NFTs), Mystery Box (promotional NFTs dropped from “boxes”).
You can buy tokens from celebrities, art galleries, and game projects on the platform.
The academy hosts educational materials on all aspects of the cryptocurrency industry. The exchange has launched the “Learn and Earn”: users are rewarded for taking tests after reading the training materials. The training is available in the form of texts and videos.
Users can get a loan secured by cryptocurrencies. It can be borrowed for a period of 7 to 180 days. Interest is charged every hour. The loans received can be used for staking or futures trading. The feature allows you to earn when the interest on the loan is lower than the interest on the staking.
This feature is available to all registered and verified users.
On Binance Launchpad, new projects get funding through the sale of their tokens. The exchange conducts a careful selection of start-ups so that users won’t stumble upon scammers. Exchange customers can buy the first tokens of the projects at good prices to come on the market.
The site operates an over-the-counter cryptocurrency market. Users on it can communicate directly and conduct transactions bypassing the exchange. Suitable only for those who work with large volumes of cryptocurrency.
Binance Decentralized Exchange
Binance has its own decentralized version. An open-source exchange that does not store users’ cryptocurrency, it is built on the Binance Chain blockchain and is a fork of the Cosmos network (ATOM).
Binance Smart Chain
Binance has its own decentralized network, Binance Smart Chain. It hosts decentralized applications and services. It is compatible with the Ethereum Virtual Machine (EVM) and has good speed and low transaction fees.
The well-known decentralized exchanges PancakeSwap, SushiSwap, 1inch operate on this network.
These are the main, but not all components of the Binance ecosystem. The exchange is constantly adding new features and services.
The exchange is known for some of the lowest trading fees in the industry. They vary depending on the type of asset traded. On the spot market, commissions start at 0.1% for a taker (the one who executes someone else’s order) and a maker (the one who places the order himself). On the futures market, the commissions are lower – 0.04% for the taker and 0.02% for the maker.
Users receive discounts on all fees, and as a result, fees can be reduced to almost zero. To do this, you need to keep Binance Coin (BNB) or Binance USD (BUSD) cryptocurrency in your wallet.
Additionally, withdrawal fees are charged. They depend heavily on the country and the specific withdrawal method. You can see them when making a withdrawal from your balance.
Registration and verification
Registration process is as simple as possible. You can use your phone or your Google/Apple account to create an account. Binance itself will guide a user through all the stages of registration.
Once an account is created, it is advisable to verify it with documents. Verified users get access to the full functionality of Binance. Verification may be required at the first withdrawal of money from the balance of the exchange.
In order to confirm the data, you will have to send a photo or a scan of the passport and a selfie with it. Usually it takes about half an hour to verify the data, but at the moments of high load, it may last for several hours.
How safe the Exchange is
Binance has implemented all modern approaches to security. It uses artificial intelligence, big data analysis. The exchange automatically verifies all transactions, both for deposit/withdrawal and within the platform.
In 2019, there was a single case of its hacking. At the time, users lost about $40 million kept in Bitcoin. Hackers interfered in its two-factor authentication system. The losses were recovered, and the exchange’s management claims to have learned important lessons and fine-tuned its security system.
After that, the company created the SAFU fund, to which it directs a portion of the profits. The losses of customers from the security problems should be compensated from this fund in the future.
Binance is considered to be the exchange with good security, you can trade on it without fear. The main risk for the user’s money now lies on the user himself. For example, in a previous article we looked at how Binance wallets are hacked using logs.
Regulation of Binance
As of today, it is unknown which authority regulates the work of Binance. For many years, the cryptocurrency community was convinced that the site is subject to the legislation of Malta. But regulators of the island denied this information, saying that they have no control over its activities.
It is unknown even where the site is located. It was created in China, but after a few months has moved to Japan. The exchange also worked there for a short time and announced its move to Malta. At the same time, the trading platform is registered on the Seychelles Islands. The head of the exchange said that it does not work anywhere specific, but exists in a decentralized form.
But there are no impudent violations of the law from the exchange. It has separate platforms for customers from the US, the UK, and Singapore. In some countries, it bans access to the futures market at the request of local regulators.
Advantages and Disadvantages
Binance, in contrast to other exchanges, has a number of advantages:
- Large trading volumes, as a consequence – high liquidity
- Wide functionality in all ways of using cryptocurrency
- Large selection of cryptocurrencies
- Convenient trading interface
- Work with local currencies
- Unknown where the exchange is located and what regulator it is subject to
For whom is Binance intended for?
Thanks to a wide range of services, the exchange is suitable for any purpose of any cryptocurrency user. For beginners, it will be easy to understand the work, get acquainted with the exchange and learn about cryptocurrencies. For experienced users, there are low fees, high liquidity and advanced features.