Binance Exchange Review: What Puts Binance at the Top?
From attracting Chinese cryptocurrency traders to operating in over 180 countries in roughly three years, Binance’s growth has been phenomenal. The platform has also expanded from a simple to a sophisticated cryptocurrency exchange that caters to spot traders, new projects’ investors, decentralized finance (DeFi) enthusiasts, and miners.
Unfortunately, its early years were not smooth. In this Binance exchange review, we look at the exchange’s transformational path and what makes it different in the virtual currency industry.
But first, a brief background…
Binance is the brainchild of Changpeng Zhao and Yi He. However, Zhao, commonly known as CZ in the crypto circles, maintains the exchange’s face. CZ has a background in programming. In the past, he created trading systems capable of handling high trade volumes. It’s this knowledge and working with like-minded people that Binance has attracted over 15 million global users in approximately three years.
Binance is originally from China. Unfortunately, slightly after being launched in mid-2017. The Chinese cryptocurrency space got disrupted by heightened government involvement through unfavorable crypto regulations. What followed was Binance moving out of China. Currently, the exchange lists Malta as its headquarters. Binance had also set up base in the United States, but the regulatory environment was not favorable, forcing it to leave the market. However, it created a special platform, Binance.US, to cater to its US users.
Binance Exchange Review: Major Products
The exchange has evolved from just offering spot trading functionalities to serving those with a high-risk appetite through derivatives. Below are is a review of Binance’s major products:
Binance Spot Trading
This is the oldest and widely used offering on the exchange. Here, Binance users can securely, and frictionless trade listed coins. Interestingly, when the exchange started, spot trading functionalities were enabled for only crypto to crypto trading. Also, account funding wasn’t available for fiat deposits.
However, the exchange’s transformation has seen it add support for fiat deposits and withdrawals. But, it’s on a case by case basis. Mostly, rules and regulations in a particular jurisdiction determine the availability of the fiat functionality.
Spot traders are offered three interfaces to choose from depending on their knowledge of the game. The first option is for novice traders. It eliminates fear-inducing tools such as charts and presents a clean, simple interface to trade at the market price.
The second is a classic view that presents an outlook of the market to Binance users. It allows traders to juggle between trading pairs. The advanced interface, on the other hand, is majorly for experienced traders. Reason? It has sophisticated charting functions that can be intimidating to new users.
Binance’s spot trading platform has over 180 listed virtual currencies and more than 550 active trading pairs. Additionally, the platform is available in 16 languages.
Recently, the exchange added features similar to those of LocalBitcoins. Here, traders can seamlessly trade with each other on a peer-to-peer (P2P) basis.
After the initial coin offering craze was marred in controversies such as theft of investors’ funds, the crypto community kept their space with ICOs. Notably, the ICO dissatisfaction was fueled mainly by non-vetted teams behind these investment offerings.
Luckily, Binance found a way out; it developed Binance Launchpad, where investors could put their money in a project that the exchange has already vetted. Apart from saving investors the headache of investing in new projects, it also kept new projects from running into regulatory problems of accepting funds from illicit activities such as money laundering. This is because Launchpad is only open to Binance users. Therefore, project investors are vetted by Binance.
The platform propagates what is known as an initial exchange offering (IEO). Basically, an IEO is an improvement of the old ICO. Note that each project on Launchpad includes a short description and key information such as the price, how much will be sold, and the starting time.
Another difference is that unlike ICOs where the token has no guarantee of being listed on an exchange, tokens on Launchpad are guaranteed to be listed on Binance after the IEO.
Binance Exchange Review: Derivatives, Futures, and Margin Trading
After graduating from offering simple spot trading functionalities, it was time to cater to another set of crypto enthusiasts; margin, futures, and generally everyone interested in leveraged trading.
However, this part of Binance land does not include as many trading pairs as with spot trading. As such, the margin trading offering only consists of a select few coins. Mostly, only the most traded and most popular currencies are activated trading.
One advantage of Binance margin trading is that users can apply maximum leverage of 10X. The exchange’s margin traders are offered to either put their entire margin at risk via the cross margin functionality or sacrifice part of their balance in the margin account using the isolated margin property. Observe that margin trading, although with a high-profit margin, carries a higher risk profile. The higher the risk, the higher the profits, and vice versa.
The Binance futures platform, on the other hand, was born in 2019. It supports the leading cryptocurrencies such as Ripple (XRP), Bitcoin Cash (BCH), Litecoin (LTC), Bitcoin (BTC), and Ether (ETH). Instead of a 10X leverage as with margin, Binance futures’ leverage can reach a maximum of 125 times.
Simply put, this allows traders to magnify their profits and losses by 125 times. However, to provide a separation between spot trading, margin, and futures funds, the exchange offers different wallets for different trading activities.
Note that collateral on Binance futures is provided using the leading stablecoin, Tether (USDT). For those without USDT collateral, the exchange, through the “Coin Futures” section, allows them to provide BTC and altcoins as leverage.
To make the platform appealing to inexperienced and experienced traders, it has striking similarities with the Binance spot trading interface but with all the right buttons for futures trading.
The exchange also offers what it calls “Leveraged Tokens” as part of its derivative product. Its users can speculate on a cryptocurrency’s price movement with a minimized liquidation risk. As a side note, the three products, margin, futures, and derivatives, are ideal for those who understand spot trading and the risks involved in leveraged trading and speculative crypto trading.
Binance Decentralized Exchange, Binance DEX
Binance DEX is a decentralized platform built by Binance. The exchange differs from its centralized counterpart in that decentralized players support it. Therefore, it’s more secure and supports P2P trading. In addition, a decentralized platform means it can be queried, thereby increasing transparency. Also, Binance DEX enables users to cater to their own coin’s security and custody.
The decentralized version of Binance is powered by Binance Chain, a blockchain platform developed by Binance. Apart from supporting Binance DEX, Binance Chain also powers the exchange’s token, Binance Coin (BNB). Before migrating to Binance Chain, BNB lived on the Ethereum blockchain, where it followed the platform’s ERC20 token standards.
Due to its decentralized nature, Binance DEX can be accessed and used in many jurisdictions. Unfortunately, the platform does not have a huge number of listed virtual currencies compared to the centralized exchange.
Binance Exchange Review: More Binance Functionalities / Products
Apart from trading and enabling investments into new crypto/blockchain-focused platforms, Binance has evolved to introduce other products or adapt to the current cryptocurrency ecosystem. For example,
- Staking – This is the part of Binance adapting to the broader cryptocurrency ecosystem. With the growth of blockchain platforms powered by the proof of stake (PoS) consensus mechanism, staking has become part of the game. Binance is also in the game by providing users with staking opportunities by eliminating the technical aspects. This allows Binance users to interact with DeFi platforms easily.
- Savings – By offering flexible and fixed savings account types, the exchange enables its users to earn interest on funds that are sitting idle in their account.
- Loans – Binance offers BTC or ETH collateralized loans to its users.
- Mining Pool – Through the Binance Smart Pool, the exchange attracts hashing power from solo miners into a single pool. Increased hash power increases the chances of finding new blocks. Block rewards are then shared among miners.
- Cryptocurrency Visa Card – Using the Binance Visa Card, the exchange’s user can seamlessly spend their crypto in places that only accept legacy fiat-based credit and debit cards.
- DeFi platform – With the explosive growth of DeFi platforms, Binance introduced Binance Liquid Swap (BLS). BLS has some notable resemblance to leading DeFi platforms such as UniSwap. As such, BLS operates as an AMM (automated market maker).
From a humble China-based exchange to a global force, Binance is among the few success stories in the cryptocurrency industry. Interestingly, as we have seen in this Binance exchange review, the platform has achieved so much in about three years.
Also, through additional features such as staking, DeFi support, loans, and a Visa card, the exchange adapts to the evolving cryptocurrency space and makes it easier to spend digital currencies in places where only fiat-based payments are accepted. Binance Launchpad, on the other hand, provides a trusted meeting point between crypto investors and new projects seeking funding.
However, with an ever-changing digital currency ecosystem, Binance may only be preparing the ground for much more superior and sophisticated user-centered products and functionalities.
Interested in trading at the worlds premier crypto exchange? Open an account now and start trading!!