Established in 2017
Country: Cayman Islands

Binance

24H Volume
$27.21B
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Binance unquestionably one of the top cryptocurrency exchanges in the world. A quick look at it’s daily volume as well as public wallet balances confirms this.

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Overview and History

The crypto world has always been filled with one fraud to the other to the point that it’s almost synonymous. This doesn’t exclude exchanges, for that matter, with several high profile exchanges that turned out to be exit scams, the biggest would probably be Mt. Gox back in 2013. But in the bull market of 2017, one challenger has quickly risen to the top, it’s name is none other than Binance. Binance unquestionably one of the top cryptocurrency exchanges in the world. A quick look at it’s daily volume as well as public wallet balances confirms this. It’s rise to fame has been meteoric, even by Crypto standards. Launched in 2017, Binance has catapulted itself to the top taking down far bigger players along the way. By 2018, it has cemented itself as the king crypto exchange which were held previously by Poloniex and Bittrex.

It’s hard to imagine Binance without its eccentric and outspoken leader and CEO Changpeng Zhao, also known as CZ. You can love him or you can hate him, but one thing’s for sure, you will know about him. Although Binance has been relatively new, CZ has been in the Crypto and trading scene for more than a decade already. He founded Fusion Systems in 2005, which built high-frequency trading systems for brokers. He was part of the pioneering team that built the crypto wallet Blockchain.info. Later on, he joined the OKCoin team as the CTO in 2013 before starting on his own with Binance in 2017.

Currently Binance is based in Malta due to the more crypto friendly regulations there. They started out in China, moved to Japan and eventually settled in Malta.

Binance Ecosystem

What started out as a crypto exchange has evolved over the years into a full ecosystem. Aside from their BNB token use cases which will be discussed below, Binance has released tons of new products into the market. They have products that cater even to other exchanges (e.g. Binance Cloud). For this guide, we will focus on the retail aspect of Binance.

Binance Academy, Info and Research

Binance Academy is the section of the company that is made for new users. It covers a wide array of topics and aims to be an educational resource to help inform people who just got started on crypto. It’s very helpful to have this especially with more and more new people joining the crypto.

Binance Info and Binance Research on the other hand are resources more tailored for more experienced traders and crypto investors. It aims to give readers an overview and summary about different projects. This covers not just tokens that are in Binance but also others since it is a requirement for tokens to have their info displayed here to even be considered to be listed on Binance. They also regularly publish reports about different tokens so it’s a good resource to start at when you’re doing your own research.

Binance Charity Foundation

Binance Charity Foundation is the charity arm of Binance. It has always been the goal of Binance and its founder to have a positive effect on the world not just in the crypto world but on real people through education as well as providing goods. Some may see this as just another marketing scheme, but we have to give it to Binance for spearheading an initiative like this. It’s rare to see a 2 year old company already starting their own charity.

Binance Labs

Binance labs is the venture arm of Binance. They do both incubation programs as well as direct investments in different crypto projects. One can notice that later on that most of these projects get listed on Binance, because why wouldn’t they?

Binance Labs reaches out not just to hotspots of crypto activity, namely America or Asia, but also to the other continents. They have ambassadors for Africa, South America and Europe. Binance is actually rather Some of their more notable graduates include Certik, Republic and Oasis Labs. As of July 2019, they already have 2 cohorts. You can read more about it in the links below.

https://www.binance.com/en/blog/342988062870470656/Binance-Labs-Reveals-13-Startups-in-its-Incubation-Program

https://medium.com/binance-labs/season-1-binance-labs-incubation-program-buidlers-season-1-ec34b601ccd

Binance Launchpad

Binance Launchpad touts itself as a “token launch platform for transformative projects”. It launched the IEO (Initial Exchange Offering) craze of 2019. The predecessor of the IEO is the ICO also known as Initial Coin Offering. An ICO is the first time that a crypto token has been made available for sale to the public. This is akin to an IPO in traditional markets. Before the IEO, projects that did an ICO had to make their own website, their own funding mechanism. But with the advent of the IEO, the crypto exchange handles this for you. Binance raises funds on behalf of the company while listing it for trading shortly right after.

Here is a list of the top performing IEOs of 2019. As you can see, Binance IEOs take 5 of the top 6 positions in terms of ATH ROI. IEOs tend to have a low initial circulating supply as well as a low IEO sale price. Some are even lower than private sales held months before the IEO. This could be the reason why price can pump so much.

This has also caused the price of BNB to skyrocket to an ATH of $39. Since demand for these IEOs have been sky high, Binance got creative and did a lottery to get access to the token sale. The number of your tickets corresponds to the number of BNB you hold.

Trust Wallet

Trust wallet is a mobile crypto wallet that was acquired by Binance and is the official cryptocurrency wallet of Binance. It is also used to integrate with the Binance DEX. It is highly intuitive and user friendly. It is one of our favorite crypto wallets as seen in our How to Buy Bitcoin guide.

Binance Main Exchange

Now to the bread and butter of Binance, the crypto exchange. Binance is one of the truly global exchanges out there. They’ve been very creative as well for those countries that have banned crypto exchanges or that impose regulatory risk. For example, in July 2019, Binance removed access for U.S. citizen due to the growing regulatory risk. Immediately after, Binance launched Binance U.S. or Binance America (BAM), to offer the same world class technology to American users. This subsidiary is fully compliant to US regulations and is lead by Catherine Coley, former Ripple Executive. Although it has less coins than the main exchanges, BAM has been regularly adding new coins to the array. Currently, there are 29 tokens available for Binance.us users. In Europe, Binance has a subsidiary called Binance Jersey which is a regulatory compliant subsidy with ability to deposit and withdraw Euro or British Pounds. And for Africa, Binance has chosen Uganda and launched Binance Uganda.

User Interface

Binance offers both a basic mode and an advanced mode. Basic mode is the simplified and less intimidating user interface while the advanced mode is tailored experienced traders and chartists.

As you can see below, the basic mode gives you all the basic data you will need to make a trade. This includes the japanese candlesticks, the volume bars, some moving averages and the MACD indicator. For buying options, you have the standard limit orders, market orders as well as OCO (One-Cancels-the-Other). OCO allows you to put a limit order and a stop limit order at the same time. When one triggers, the other one is cancelled. It means you either hit your target price or your stop loss. Other features include the day and night mode and order depth view.

The left side of the screen shows the order book, while the right side shows you a search bar to switch to different charts with the trade history of the asset right below it. You can also quickly change timeframes by clicking the “time” header just above the candlestick chart. So whether you’re a scalper that likes to trade 1 minute timeframes or a macro trader that looks at daily or weekly price action, they have it all for you.

Aside from all the features seen in the basic view, the advanced mode allows users to draw on the charts just like other charting softwares. Now you can draw your trendlines and support resistance levels. You can also add all the built-in indicators like the RSI, Bollinger Bands and much more.

Fiat Gateways

It used to be very hard to get your hands on Bitcoin. In the early days, people had to buy through craigslist. Imagine bringing thousands of dollars of cold hard cash just to meet with somebody on Craigslist to buy this internet money called Bitcoin? Nowadays, buying bitcoin can be as easy as shopping on Amazon. You can even use your credit card. Check out our “How to Buy Bitcoin guide here”. Binance has been a leader in this category, accepting over 35 different currencies that span the entire globe. They work with different payment processing partners that accept all kinds of payment methods from credit card, debit cards to bank transfers, with availability depending on the country or region.

Aside from this, Binance has also listed BTC pairs to other fiat currencies on the exchange. Now users can trade Bitcoin to their own currency without going through USD. Currently, this is available for the Russian Ruble, Nigerian Naira and Turkish Lira.

Fees

Compared to other big exchanges, Binance’s fees are one of the best at 0.1% (Maker Fee) and 0.1% Taker Fee. Other exchanges can charge as high as 0.5% for retail traders. There are also multiple ways to lower your fee. If you pay the fees using BNB, Binance’s own token, you get a 25% off. If you had a referral link, you’ll even get a 20% kickback. From 0.1% you get a 40% discount down to 0.06%. And with more volume and BNB balances that you hold, this could go even lower as seen in the table below.

When it comes to deposit fees, it’s all free. But when you withdraw, the fee is taken in the form of the token. If, for example, we want to withdraw Ethereum, the minimum withdrawal amount is 0.02 with a withdrawal fee of 0.003. You can see the full list here.

Margin Trading and Futures

Binance launched their Margin trading platform in July of 2019 which was followed by the Futures platform trading which was launched in September of the same year. Both of these allow users to buy more than their balance allows but with it also carries the risk of possible liquidation. In normal spot trading, your balance will never go to zero unless the underlying asset goes to zero. But with leverage trading, you can get liquidated depending on the leverage you use. Using a 10x leverage, a 10% move in asset can either double your holdings or bring it to zero. As for the difference, in margin trading, you are still buying the underlying asset. You’re borrowing money from Binance using your current asset as a collateral. Futures trading on the other hand is a derivatives platform meaning the futures price is just based on the real trading price but is not the actual movement of the price. In practice, the price difference is miniscule. Margin trading allows up to 5x leverage while the futures platform allows up to 125x leverage.

As for the fees, daily interest fees vary depending on the asset. Some of the most popular assets like Tether, BTC, and ETH have daily interest rates of 0.0375% 0.01% 0.003% respectively. Again, these fees could go lower when you reach a higher VIP status as seen in the fees schedule below.

For futures trading, you can refer to the maker and taker fees table below.

Funding Fees

One major difference of the futures platform is a fee called funding fee. Note that this is added on top of the maker and taker fee. The funding fee essentially works as a mechanism to reach spot price equilibrium. When there are more buyers (long position) than sellers (short position), the funding fee is positive. This means those in a long position will pay the funding fee to short sellers. And if there are more short sellers, the funding fee is negative and short sellers pay those in long. You basically get rewarded for going against the majority. This fee is calculated and deducted every 8 hours. For more details as well as a computation check out this link.

Binance DEX (Decentralized Exchange)

Unlike the main exchange of Binance which is centralized, also called a CEX, the Binance DEX operates without a single entity that operates the exchange. This means users trade directly peer-to-peer. One main difference is that users hold their own funds. They simply connect their wallet and trade from there instead of sending the funds to a centralized exchange before trading.

Another main difference comes in the listing procedure. Instead of a central entity that decides whether or not to list a coin, this responsibility and power is given to Binance Chain validator nodes. After approval, tokens will be minted on the BEP2 standard token. This means projects will have both a BEP2 token as well as an ERC20 token. Some even have a 3rd token when their own mainnet token goes live.

Binance DEX is built on the Binance Chain. It is BNB’s mainnet network. Instead of using the standard erc20 token standard, it uses the BEP2 token standard. Binance chain mainnet launched in late April of 2019. It was created for tokens to experience speed, security and user-friendliness of the DEX platform.

I think the main reason that attracts token issuers is a stronger chance to be part of the prestigious Binance. Since Binance tends to list tokens with high volume on their DEX to their CEX. For a full list of benefits from token issuers, check out this link.

Mobile App

Binance’s mobile app is available both for Android and iOS. As you would expect the user interface is very friendly. It works well and is very responsive. Even their mobile view on the the phone’s browser works well.

Binance Customer Support

You’d expect nothing but world class support from Binance. They offer multiple ways to help users with their issues. The three main ways are through their blog, email support tickets, and also live chat. Their FAQ covers a lot of questions and details extensively. Here is a link https://binance.zendesk.com/hc/en-us From experience, their email support takes half a day to 2 days to get a response from. And for the live chat, it takes less than 10 minutes to connect with a customer service agent. Having great support is paramount especially for those that are new to the space and need help with their problems or navigating around.

Operation Security

As for any financial service or anything that deals with payments and money, security is of paramount importance. Binance has been a leader in creating as well as implementing security features and setting a standard for others.

2FA – This has been a standard form of protection even before Binance came into the scene. This involves using a separate device to log in to your Binance account.

Email verifications – Whenever a user would like to withdraw funds, an email will be sent to their email address for you to confirm if this transaction is legitimate.

Anti-Phishing – This security feature makes sure the emails sent to you requesting withdrawals are really from Binance. You will configure and choose a word that is your anti phishing code. All emails from Binance will include this email. This is an effort to combat email spammers and phishing links.

Hot and Cold Wallets – This is a standard procedure that separates revolving funds (hot wallet) and most user funds (cold wallet). The cold wallet is disconnected from the internet so it is less likely to be hacked. It is akin to banks not having all of their money locked in a giant safe. They only hold what they expect to be transacted that day.

Even with the best security in place, hacks are not inevitable. The latest Binance hack was the $40 million hack last May 2019. They lost around 7,000 bitcoins which comprised 2% of their total assets under management. On the bright side, Binance will be covering the loss through their SAFU Fund.

SAFU Fund

The Secure Asset Fund for Users is an emergency insurance fund started by Binance in July of 2018. 10% of all trading fees received will be moved to this Fund as an insurance fund as a form of protection. This was a very forwarding-thinking move by Binance.

Overall, Binance has some of the best security among the different crypto exchanges. They are also quick to adapt to any new threats and vulnerabilities. Their exchange might be down for a couple of hours but quickly resume operation in a few hours.

Binance Token BNB

The Binance token is arguably one that has a ton of utility. Those that joined the Binance ICO bought the token for 10 cents. At its height of $39, that gives those users an ROI of 390x. The price as of this writing is hovering around $21 so it’s still a pretty solid return.

Binance has created multiple use cases surrounding the BNB Token. The first and probably the most used use case is using the token to pay for fees. Paying the maker and taker fees with BNB grants users an additional 25% discount off their fees. Second, BNB is required for projects to deposit as a form of insurance to list on the Binance DEX. And upon listing, they will have to pay 2000 BNB to create their token and be listed on the Binance DEX. Third, users that hold BNB get additional perks such as the VIP tiering system which gives them even lower fees as seen in the fees schedule above. Holding BNB also entitles users to lottery tickets for IEOs. Binance has also partnered with several companies to accept BNB as a form of payment. No doubt about it, Binance has been consistently expanding BNB’s use case which leads to more adoption. It was very smart of them to leverage the exchange’s prestige as well to increase adoption and cement the token’s value for the years to come.

https://www.binance.com/en/blog/421499824684900408/BNB-use-cases-in-the-Binance-ecosystem-Part-1

Conclusion

Binance has definitely set a very high standard for other exchanges and even crypto projects to follow. It’s rank at the top is unquestionable. What impresses me the most about Binance is their competency for always building. The bear market of 2018 and 2019 was a testament to this. They have been introducing not just more features, or starting new trends (IEOs) but they’ve also been incubating other startups. They have also paved the way on the regulatory side which helps the entire crypto industry as a whole. They have a history of being very agile which the legacy exchanges failed, allowing this young start up to take over the crypto world. Binance will continue to find ways to increase the BNB token’s utility.

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