Last Updated on June 1, 2021 by Haven Direct
Anyone involved in cryptocurrencies has likely heard the name Binance already. It’s the leading global cryptocurrency exchange, plus as you’ll soon learn a whole lot more besides. Since its inception in 2017 it has been led by its founder Changpeng Zhao, and has continued to feature low trading fees, and the innovation that has made it so popular in the crypto community.
In the short time Binance has been around it has launch a mountain of new features, and it also enjoys a vibrant and active community of traders. From adding support for fiat currencies to launching its own Binance Chain and Binance Coin, the exchange is always looking for new ways to bring value to its clients. It’s even talked about morphing into a decentralized autonomous organization (DAO) in the future, which would leave its governance to the traders who use it.
As the largest volume cryptocurrency exchange Binance is capable of handling a massive number of trades without seeing a slowdown in its transaction times, however it is also known for some common issues, such as unexpected maintenance and the occasional security vulnerability. Despite these things it remains one of the top cryptocurrency exchanges.
Table of Contents
Binance Key Features
Led by the charismatic Changpeng Zhao (or simply CZ), Binance has been running for nearly four years as of the writing of this review. In that short time it has established itself as a dominant force in the universe of cryptocurrencies and cryptocurrency trading. Thanks to its innovation there’s little you can’t do at Binance in connection with crypto trading, investing, or savings.
Below is a listing of the many features you can find at Binance. The list may not be exhaustive, and I’ll only cover some of these in more detail in the following review, but I thought it important for you to know about as many Binance features as possible. If there’s anything you’d like to know more about that hasn’t been covered in the review feel free to leave a comment at the end of the review.
- Trade over 280 cryptocurrencies on Binance. Binance has one of the largest selections of quality altcoins available to trade. In addition, there are almost 1,000 pairs available to trade.
- Binance Fiat Gateway. The Binance Fiat Gateway was an excellent addition, allowing users to purchase over two dozen popular cryptocurrencies with over 40 fiat currencies using bank cards and other methods. It also supports selling crypto for fiat.
- Low trading fees. The trading fees at Binance are some of the lowest you’ll find.
- Multi-platform support. Binance can be accessed through its web-based platform, via desktop clients for Windows and macOS machines, or through its mobile apps for Android and iOS. There’s also a Binance API available.
- Binance Futures with 125x leverage and margin trading with up to 3x leverage. Supercharge your trading with the available leverage offered by Binance.
- Around the clock customer support. Customer support is often lacking at cryptocurrency exchanges, but Binance has a dedicated help center, where you can reach out to the support team anytime. There’s also a wealth of written information that includes beginner guides and explanations of all sorts of exchange functions.
- Binance Launchpad. The Binance Launchpad was created as an alternative initial listing venue to the ICO model. All of the clients at Binance can take part in the IEOs on Launchpad, and they have become some of the most anticipated and profitable coin launches in the crypto industry.
- Binance Finance. Binance Finance gives crypto holders other ways to earn from their coins, such as crypto lending and staking, along with other methods for earning a passive income from crypto holdings.
As you can see Binance has involved itself in all aspects of the crypto ecosystem. It’s innovation has made it one of the most used cryptocurrency platforms, and the work of developers and community members at Binance ensures that the platform is continually improving. It has become an excellent place for beginning cryptocurrency traders and for experienced cryptocurrency enthusiasts.
Note: Binance.com does not allow registration from USA. However, if you are from USA Binance has created an alternative platform at Binance.us and you can use this for trading.
Now let’s get on to the review.
Binance Background and History
With less than four years of history Binance remains quite new, yet it is likely the best known global cryptocurrency exchange. It was created with the goal of providing traders with a cryptocurrency trading interface that is fast, simple, robust, and intuitive. Many would agree that it has succeeded.
Binance was launched in July 2017 by its founders Changpeng Zhao and Yi He in China. Both the founders previously worked for the OKCoin exchange, and Changpeng was a member of the Blockchain.com wallet team since 2013.
Binance may have been destined for greatness. Besides creating one of the most successful cryptocurrency exchanges they also started out with one of the most successful ICOs in the cryptoverse. In July 2017, from the 1st to the 20th, the exchange raised $15 million in an ICO for its newly minted ERC-20 Binance Coin (BNB) tokens. The selling price for those tokens was $0.115 each. As of March 2021 the BNB token (which has been migrated to the native Binance Chain) is worth $238.84 and is the fourth largest altcoin by market cap.
Given the success of the ICO it might come as no surprise that the exchange itself has been just as successful. Ever since its launch it has been one of the largest global exchanges in terms of trading volume. It achieved this in just six months from its launch, which is quite an impressive feat. And nearly four years later it remains at the top thanks to its low fees, ease of use, robust ability to handle massive transaction volumes, and its global approach to its business (the platform is available in over two dozen languages).
Binance doesn’t release user figures, but based on various interviews given by CZ there are now over 15 million Binance users. In addition, the exchange settles roughly $4 billion a day, with the busiest days seeing over $20 billion in trading volume. In addition it has also created a huge suite of related products which include the following:
- Binance Academy –An open-access learning hub for blockchain and crypto education resources.
- Binance Card –A crypto payment card that can be used as a payment option for everyday purchases just like a regular bank card.
- Binance Chain and Binance Coin (BNB) –Community-driven blockchain ecosystem with its own native token (BNB) and decentralized exchange (DEX).
- Binance Charity –A not-for-profit foundation dedicated to advancing blockchain philanthropy and sustainable global development.
- Binance Cloud –Enterprise cryptocurrency exchange solutions for cryptocurrency ventures.
- Binance Crypto Loans –A feature allowing its users to take out crypto loans secured by your cryptocurrency assets.
- Binance DEX –Binance’s decentralized exchange built on the Binance Chain.
- Binance Fiat Gateway –A fiat gateway that lets you purchase cryptocurrencies using various fiat currencies (currently supports nearly 40 fiat currencies.)
- Binance Futures –Binance’s crypto-derivative platform that lets you trade futures with up to 125x leverage.
- Binance Info –An open-source crypto encyclopedia.
- Binance Jersey –A European fiat-to-crypto cryptocurrency exchange that facilitates bitcoin (BTC), ethereum (ETH), litecoin (LTC), binance coin (BNB), and bitcoin cash (BCH) trades for euros (EUR) and pound sterlings (GBP).
- Binance JEX –Binance’s cryptocurrency futures and options trading platform.
- Binance Labs –Binance’s infrastructure impact fund and initiative to empower blockchain projects.
- Binance Launchpad –Binance’s crypto crowdfunding platform for launching initial exchange offerings (IEOs). Binance innovation made Launchpad the first crowdfunding platform for IEO’s in the industry.
- Binance OTC – Over-the-counter trading desk for whales and other large-volume traders.
- include Ark, EOS, ARPA, TROY, Lisk, LOOM, Tezos, KAVA, THETA, and more.
- Binance P2P trading –A peer-to-peer crypto trading platform like LocalBitcoins or LocalCryptos that supports payments via WeChat, AliPay, Bank Transfers, and QIWI.
- Binance Research –Institutional-grade research platform conducting analysis for investors in the crypto space.
- Binance Savings –Ability to employ your crypto assets by lending them out to earn interest. You can withdraw your funds anytime.
- Binance Staking –Binance staking feature lets you stake certain cryptocurrencies and reap up to 16% annual yield. Supported cryptocurrencies.
- Binance US and other localized versions of Binance exchange –Regulated versions of Binance exchange dedicated to certain markets based on their specific legal and regulatory requirements.
- Binance USD (BUSD) and Binance GBP stablecoin –Binance’s regulated stablecoins, released in partnership with Paxos Trust Company.
- Trust Wallet –An official, secure, and decentralized wallet of Binance. Over 5 million users.
Many of the features were developed by Binance, but they have also made a large number of acquisitions to help bootstrap their growth. Some of the largest were the acquisition of WazirX, India’s largest crypto exchange, DappReview, a Chinese dApp analytics platform, and Coinmarketcap, the cryptocurrency market data aggregator.
Future plans include morphing the Binance exchange into a decentralized autonomous organization that will be governed by the community.
Even though Binance was founded in China, it didn’t stay there for very long. Just a couple months after its founding it moved its headquarters from China to Japan to avoid upcoming regulatory changes banning cryptocurrencies in China. A year later in 2018 Binance opened offices in Taiwan and announced it was moving to the island of Malta, where cryptocurrency exchanges are more welcomed.
Even though the headquarters for Binance are located in Malta, it is incorporated in the Seychelles and Cayman Islands.
In addition, there are a number of other offices located all around the globe including those in California (United States), London (United Kingdom), Paris (France), Berlin (Germany), Moscow (Russia), Istanbul (Turkey), Singapore, New Delhi (India), Kampala (Uganda), Manila (Philippines), Ho Chi Minh (Vietnam), Jersey, and several other locations across Asia. In total, the Binance team operates from over 40 countries.
Supported Countries and Verification
Besides having offices in over 40 different countries around the world, the exchange and other business units operate in over 180 countries around the world. There are very few countries it doesn’t operate in, and those are the countries that are on economic sanctions lists, or on the “Denied Persons List” of the U.S. Commerce Department.
While U.S. citizens are blocked from using the primary exchange at Binance.com, they do have access to a secondary platform at Binance.us. There are several other jurisdictions with localized versions of the Binance platform which include Binance Jersey, Binance Singapore, and Binance Uganda.
Any verification procedures or requirements are based on the jurisdiction of the trader. First time customers will go through the typical Know-your-Customer (KYC) verification process which requires the new client to submit the following documents:
- Government ID document (passport, ID or driver’s license)
- Residential address document (utility bill)
The verification process is nothing to worry about. It is quite straight-forward and typically is completed quickly. Of course it is possible that delays can occur during very busy times for the Binance staff. Patience may be necessary in some cases. Also, if you’ve ever taken a selfie while holding your ID and another piece of paper you know how tricky it can be to get an accurate shot, so don’t be surprised if you get a request for a re-do on your selfie.
If you choose not to verify your profile you can still make withdrawals, but will be limited to 2 BTC per day. Those who verify their profile can withdraw up to 100 BTC per day. Yes, it really is a huge difference. And those who are unverified may find that the security algorithms at Binance get triggered for mandatory ID verification when trying to withdraw for the first time.
Is it Safe?
With the need for ID verification it’s normal to wonder if Binance is a safe exchange. As one of the largest exchanges in the world Binance has taken the time, effort, and money to harden their security.
As of March 2021 they have artificial intelligence risk control solutions that are state of the art and use both identity and facial recognition. In addition they also use big data analytics and cyber forensic investigations to monitor each transaction taking place on the exchange. All of this helps to identify any suspicious or irregular activity occurring on the exchange.
Thanks to all this security it’s been some time since any hacking attempts at Binance have been successful. In fact, the last successful hack at Binance was in May 2019 when hackers were able to use an attack that relied on phishing, breaking the 2-FA, and accessing a Binance hot wallet. Roughly 7,000 BTC worth $40 million at the time were taken, but you can be sure that Binance learned a lot from the hack. And they also made sure to reimburse any lost funds to their clients.
They were able to do so because in July 2018 they opened a Secure Asset Fund for Users (SAFU). 10% of all the trading revenue generated gets deposited to this account, and it is used to cover any losses from hacking attempts.
All in all, Binance is a secure exchange, but security is not its hallmark. Even so, it has seemingly taken the time and effort to fix any security holes, and as of March 2021 is likely one of the safest exchanges out there.
Tying into the safety concerns at Binance are obviously questions regarding the regulatory status of the exchange. Traders feel much safer when there’s some third-party regulation ensuring a safe trading environment and no bad behavior on the part of the exchange. And when cryptocurrencies are concerned we know that most exchanges operate without any regulation.
In the case of Binance the question of regulation is a murky one. For years there’s been the idea that Binance is licensed and regulated in the jurisdiction of Malta. However in February 2020 the Malta Financial Services Authority (MFSA) released a statement that said Binance is not regulated in Malta by the MFSA.
Once that was clear it was also clear that the parent company Binance is not regulated by any specific regulatory agency, nor are they licensed in any jurisdiction. However, some of the subsidiaries of the parent company are regulated by the specific country in which they operate. For example, in the U.S. Binance.us is registered with the Financial Crimes Enforcement Network (FinCEN). It is also licensed to operate in most (not all) U.S. states.
Binance UK is operated by Binance Markets Limited, and is regulated by the UK Financial Conduct Authority.
Binance Singapore has applied for a license with the Monetary Authority of Singapore after being granted a six-month exemption from the January 2020 passage of the Payment Services Act. It is unclear if that license has been granted, or how the process might be going.
So, while Binance does claim to work in compliance with local laws, in few cases are they actually licensed or regulated. That said, as far as we can tell Binance does actually work in compliance with the local laws of all the jurisdictions where they operate.
One of the most popular features of Binance that have attracted so many traders is the wide variety of coins they support. There are currently (March 2021) nearly 300 coins supported, and nearly 1,000 trading pairs. So, not only can you trade BTC and other cryptocurrencies against the USD, you can also trade it against the Euro, the British Pound, Tether, and BNB.
There are also a good number of tokens offered on the Binance platform, and the IEOs from Launchpad make it to the Binance exchange immediately following their release. Binance is also pretty quick to add new coins immediately following their initial offering on other platforms. That means traders can often buy newly issued tokens at low prices and make easy profits.
Purchasing cryptocurrencies on Binance is limited to certain jurisdictions, but the number of countries allowing this is growing. Binance has two platforms that can be used for fiat purchases (and sales) – Binance Jersey for the EU and UK, and the Binance Fiat-to-Crypto Gateway for a number of other countries around the world.
Users who have access to buy cryptocurrencies through Binance will see the “Buy Crypto” link at the top of their account page when logged in. Clicking it will take you to the fiat-to-crypto service page.
Users of Binance Jersey are also able to convert crypto to fiat and withdraw fiat currencies directly. For more detailed information regarding Binance’s fiat support visit this page.
Fees (and how to reduce them)
Binance charges no fees at all for deposits, but the same can’t be said for actual trades and for withdrawals. Even so, the fees at Binance remain some of the lowest in the crypto industry, plus there are ways to make them even lower still.
On each trade you make with Binance there’s a 0.1% fee. That’s actually one of the cheapest fees you’ll find at a crypto exchange. As an example, at Coinbase Pro you’ll be charged 0.5% per trade, and Bittrex has a 0.2% trading fee.
One exchange that does match Binance’s fee is KuCoin, while another popular exchange, HitBTC charges 0.1% for market makers, but 0.2% for market takers. Other exchanges such as Kraken and Poloniex are also more expensive, with 0.15-0.16% maker fees and 0.25-0.26% taker fees.
To sweeten things even more, it’s possible to get a significant discount (up to 25%) on your trading fees if you use Binance Coin (BNB) to pay the fees. You can get another significant discount (up to 25%) for referring your friends to Binance. That means you can cut the already low 0.1% trading fee to an 0.05% trading fee. That’s really very little.
Binance futures continues the theme of low fess with a 0.02% maker fee and a 0.04% taker fee. Those are the highest fees you will pay, but they can be lowered even further.
Another key factor to look at when evaluating Binance’s fees is futures funding rate and margin position daily interest rate. These tend to change based on market conditions, and there are no fixed rates, but you can check them at Binance’s website here and here.
Then there are the withdrawal fees to consider. With withdrawals, Binance offers remarkably good value for money. Note that fees do vary from cryptocurrency to cryptocurrency, but that’s hardly unusual. A small sample of the fees for some of the more popular coins is shown below:
As you can see, Binance lets its users withdraw either regular or BEP2 versions of their assets. BEP2 withdrawals are based on Binance Chain and use not an actual crypto asset, but a pegged BEP2 version of it.
To give some perspective on these fees, Kraken and Bittrex each charge a 0.0005 BTC withdrawal fee, while Bitfinex and HitBTC charge 0.0004 BTC and 0.001 BTC respectively.
There are also fees to consider if you’re using the Binance Fiat gateway, and these aren’t inconsequential. While you can buy over two dozen cryptocurrencies with over 40 different fiat currencies through the Binance Fiat Gateway, the fees you pay are going to vary based on the payment method used, and on the floating exchange rate charged by whichever payment processor is used.
As a rough guide, these fiat-to-crypto gateway fees range from 1% to 7% depending on the payment method and processor. Note that bank card transactions tend to be the most expensive.
Overall you’ll find that Binance has some of the lowest fees in the undustry, which is quite refreshing, and is probably another reason why they were able to become so popular and grow so quickly. After all, who wants to pay more in fees when they don’t have to? Certainly not me.
Registration and KYC
You are required to create an account to use the Binance exchange, but the process is pretty simple and straight-forward. Also, there is no requirement to verify a level 1 account, which allows for withdrawals of as much as 2 BTC daily.
If you expect to withdraw more than that you will need to verify your identity in accordance with Know Your Customer rules. That requires uploading a government issued photo ID and proof of residence, but it allows for withdrawals of up to 100 BTC daily.
The approval process typically takes less than 24 hours, but can take longer if the support team at Binance is extremely busy for any reason. It’s also possible to increase limits beyond 100 BTC per day, but you’ll need to contact Binance support directly to arrange for this.
Because approvals can be delayed at times be sure to plan appropriately if you are going to deposit and trade large sums at Binance.
Once any registration and KYC requirements are taken care of you can go ahead and make a deposit to fund your account and begin trading. Binance will accept a large number of digital currencies as deposits, but it is usually best to stick with their big four – BTC, ETH, USDT, or BNB.
Deposits / Withdrawals (Fiat & Crypto)
Because the Binance exchange only accepts cryptocurrency all the deposits and withdrawals from the exchange involve the movement of your funds between the internal Binance wallet and your own external crypto wallets.
Funding an account at Binance is as easy as logging into your account, and clicking through the “Funds” > “Deposits / Withdrawals” link at the top of the site. You can then search for the currency you are planning to deposit and when you click the “Deposit” button you’ll be given the appropriate wallet address.
Once you have the internal wallet address you can begin transferring cryptocurrency onto the platform to trade with. Note that network fees and transfer times will depend on which cryptocurrency you’re sending since each blockchain does have different block times and different network costs.
Once you’ve transferred some coins and Binance has received them you can go right ahead and begin trading any of the nearly 1,000 cryptocurrency pairs offered on the exchange.
As fast as deposits are, withdrawals are just as fast. In this case you’ll once again visit the “Funds” link in your account, and then go to “Withdrawal”. This is where you’ll be able to choose the coin you are withdrawing, fill in the amount you’d like to withdraw, and then provide the external wallet address that the funds should be delivered to. Click the “Withdrawal” button and then all you need to do is wait for the transaction to be verified on the blockchain to show up in your wallet.
Crypto withdrawals are a speedy process on Binance. To withdraw your crypto holdings, hover over the “Funds” dropdown menu, click the “Deposits” option, for example, and then type in the desired cryptocurrency to receive a Binance wallet address into which they can deposit it.
Binance Fiat-to-Crypto Gateway
Binance fiat-to-crypto gateway currently lets you buy Bitcoin and other cryptocurrencies via a bank card using 65 traditional currencies. In many cases you can also sell your cryptocurrencies to withdraw the fiat currency of your choice. Here are the supported fiat currencies:
|Buy Only||Buy and Sell|
|United States Dollar (USD)||Euro (EUR)|
|United Arab Emirates Dirham (AED)||British Pound (GBP)|
|Bulgarian Lev (BGN)||Australian Dollar (AUD)|
|Swiss Franc (CHF)||Chinese Yuan (CNY)|
|Czech Koruna (CZK)||Canadian Dollar (CAD)|
|Danish Krone (DKK)||Argentine Peso (ARS)|
|Croatian Kuna (HRK)||Brazilian Real (BRL)|
|Hungarian Forint (HUF)||Colombian Peso (COP)|
|Indonesian Rupiah (IDR)||Hong Kong Dollar (HKD)|
|Israeli New Shekel (ILS)||Indian Rupee (INR)|
|Japanese Yen (JPY)||Kenyan Shilling (KES)|
|South Korean Won (KRW)||Kazakhstani Tenge (KZT)|
|Norwegian Krone (NOK)||Mexican Peso (MXN)|
|New Zealand Dollar (NZD)||Malaysian Ringgit (MYR)|
|Poland Zloty (PLN)||Nigerian Naira (NGN)|
|Romanian Lei (RON)||Peruvian Sol (PEN)|
|Swedish Kronar (SEK)||Russian Ruble (RUB)|
|Thai Baht (THB)||Turkish Lira (TRY)|
|Taiwan Dollar (TWD)||Ukrainian Hryvnia (UAH)|
|Azerbaijani Manat (AZN)||Vietnamese Dong (VND)|
|Icelandic Kronur (ISK)||South African Rand (ZAR)|
|Costa Rican Colon (CRC)||Sovereign Bolivar (VES)|
|Dominican Peso (DOP)||Ghanian Cedi (GHS)|
|Moldovan Leu (MDL)||Bolivian Boliviano (BOB)|
|Namibian Dollar (NAD)||Chilean Peso (CLP)|
|Qatar Riyal (QAR)||Egyptian Pound (EGP)|
|Uzbekistani Sum (UZS)||Georgian Lari (GEL)|
|Lebanese Pound (LBP)|
|Moroccan Dirham (MAD)|
|Sri Lankan Rupee (LKR)|
|Philippine Peso (PHP)|
|Pakistan Rupees (PKR)|
|Paraguayan Guarani (PYG)|
|Panamanian Balboa (PAB)|
|Saudi Riyal (SAR)|
|Singapore Dollar (SGD)|
|Uganda Shilling (UGX)|
|Uruguay Peso (UYU)|
With the currencies listed above you can purchase any of the following 31 cryptocurrencies: Bitcoin (BTC), Binance Coin (BNB), Binance USD (BUSD), Ethereum (ETH), Ripple (XRP), Cardano (ADA), Bitcoin Cash (BCH), Basic Attention Token (BAT), BitTorrent (BTT), Compound (COMP), Cosmos (ATOM), Chiliz (CHZ), Chainlink (LINK), Coti (COTI), Dash (DASH), Doge (DOGE), EOS (EOS), Fio Protocol (FIO), Hedera Hashgraph (HBAR), Litecoin (LTC), Maker (MKR), NANO (NANO), PancakeSwap (CAKE), Polkadot (DOT), Polygon (MATIC), Paxos Standard (PAX), Qtum (QTUM), Stellar Lumens (XLM) Tether (USDT), VeChain (VET), and Zilliqa (ZIL).
The Binance Fiat Gateway was made possible through the growing number of third-party partnerships that Binance is involved in. A few of the partners that have made it possible for Binance to offer the Fiat Gateway include Simplex, Paxos, SEPA, and TrustToken.
Note that payment options differ based on the jurisdiction you are resident in, and because Binance is constantly making new partnerships their offerings change over time. Even if a particular payment provider isn’t supported in your jurisdiction now, it could be in the future.
Customers who wish to trade in the supported fiat currencies will need to carry out the necessary KYC procedures by uploading their government issued ID documents such as passport and driving license.
Wei Zhou, Binance’s CFO released this statement at the launch of the Binance Fiat Gateway in July 2020:
We are pleased to introduce this new fiat gateway through Etana Custody. The integration helps make access to digital assets more effortless for people across the European, Asian, North American and Oceanian markets. At Binance, we are committed to furthering global digital assets adoption by launching multiple fiat-to-digital assets gateways. Binance’s fiat gateways covers over 170 countries and regions in the world and we are continuing to add more to make crypto more available across the globe.
Binance Trading Platform
One of the features of Binance is the simple and intuitive trading platform they’ve created. It is very easy to determine the steps needed for trading, and there is a wide variety of cryptocurrencies and pairs to choose from. Besides simply trading BTC or ETH pairs it is also possible to trade in USDT, BUSD, XRP, and TRX pairs. Plus European traders can access a small variety of EUR, GBP, and TRY pairs on the most popular cryptocurrencies.
The platform makes several trading options available and users can choose which one to use based on how much effort they are putting into the trade.
The most basic trading interface is the “Convert” platform. Here the trader simply chooses the cryptocurrency input and the desired output currency and makes the trade. There are no charts, or order books, or fees.
This is an over-the-counter market. There is a spread between buying and selling prices, but this is pretty tight for most popular pairs that have good trading volume. In addition to the 48 cryptocurrencies available in the Convert platform there are also five fiat currencies to choose from – EUR, GBP, BRL, TRY, and AUD.
The “Classic” trading platform is the original charting and volume display. It gives traders a good deal more information about the activity in the pair they are planning on trading. It also gives full access to all of the cryptocurrencies and trading pairs available on Binance. New traders could be overwhelmed when they first access this platform, but once they use it a few times it becomes easy to see what information is being presented, and how to use the platform most efficiently.
There’s also an “Advanced” charting option, but to be honest we actually find this to be cleaner and less cluttered than the Classic interface. It features the Order Book, which can be a valuable tool for experienced traders. There are also a wide variety of technical analysis tools and indicators that can be applied to the trading charts.
There’s also a “Margin” choice under the Trade link, which simply filters the trading pairs to those with margin available. Without this filter on you can still see pairs that allow margin displayed with a small 3x, 5x, or 10x icon behind the trading pair. Note that cryptocurrencies are already extremely volatile assets capable of making double digit percentage moves on a daily basis. Adding margin can certainly increase your returns dramatically, but it can also increase your losses just as dramatically.
Finally there is a link to the Binance peer-to-peer trading platform, where you are able to make deals directly with other users to exchange cryptocurrencies and pay using your bank account or a number of online e-wallet services. There are nearly 200 different payment options to choose from when using Binance P2P.
Not content with spot and over the counter trading? Then Binance has derivatives for you. The Binance futures markets allows traders to access cryptocurrencies in an extremely sophisticated manner. Traders can choose from perpetual contracts that never expire on dozens of coins and tokens.
Launched in August 2020 the futures trading platform is enjoying increased popularity because it allows for leverage of up to 125x on the futures contracts. These contracts come in two varieties – USDT-M futures and COIN-M futures.
USDT-margined futures are similar to traditional standard futures, margined and settled with a fiat currency, for delivery of a commodity or asset such as gold. COIN-margined futures are margined and settled with the asset instead (i.e. Bitcoin or altcoin), and are designed after “inverse” contracts which are counterintuitive in traditional finance.
Known as ‘Binance Perpetual Futures Contracts’, these operate in a similar nature to conventional futures. However, the key difference is that the contracts never expire. As a result, the trade will remain in play indefinitely until you:
- Close it manually
- Your stop-loss or take-profit order is triggered
- You are liquidated (more on this below)
Obviously the top draw for these derivatives is the leverage that’s made available. If you aren’t familiar with leverage, it is a function that allows you to enter larger positions than you could otherwise given your available funds. The 125x leverage offered by Binance is huge when you consider that in Europe and the UK leverage on cryptocurrency CFDs is capped a 1:2 for retail traders.
However, the derivative products offered by Binance fall outside of these restrictions, not least because you are trading digital contracts that in theory – do not exist. As a result, Binance allows you to trade with leverage of up to 1:125 on Bitcoin and other altcoin futures.
For those who are unfamiliar with how leverage works in practice here’s an example trade that will illustrate how dramatically the rewards and risks can add up.
Binance Leveraged Trade Example
Note that when actually trading at Binance everything will be priced in the respective base currency (e.g. Bitcoin), but for this example I am using USD to show the reality of the risks more clearly and concretely.
Let’s assume you have an account at Binance and there is $1,000 in the account that you are willing to risk on leveraged futures trading. You believe that Bitcoin is currently oversold and will soon rise, so you go long on the BTC/USDT futures contract using the full 125x leverage available to you.
To be clear from the start, your $1,000 trade using 125x leverage means the value of your trade is $125,000 and both your gains and losses will reflect this value.
- If BTC/USDT increases by 10% you would have made $100 by trading your $1,000 stake normally.
- However, since you are using 125x leverage on the trade your profit with a 10% gain in BTC/USDT would be $12,500 since the price change is multiplied by 125x.
That’s really an amazing trade that would take your account balance from $1,000 to $13,500. However imagine if BTC/USDT declined by 10% instead.
- Ordinarily, at a stake of $1,000, a 10% reduction in the value of BTC/USDT would result in a loss of $100.
- However you are using 125x leverage so just like the winning trade you’ll see your losses magnified by 125x. That means this trade will cause you a loss of $12,500.
Of course you could only lose that much if you actually had that much money available in your margin account. Otherwise the position would have been closed as soon as the futures contract moved 0.8% against you ($8 x 125) unless you deposited more money in your account to cover any potential additional losses.
Derivative trading is a sophisticated and advanced trading technique. While the notion of multiplying your gains by 125x may sound very attractive, it is balanced by the risk of potentially losing everything in your account if a trade goes against you.
Binance Leveraged Tokens
Binance Leveraged Tokens are a type of derivative product that give you leveraged exposure to the underlying asset. Like other tokens, leveraged tokens can be traded on the spot market. Each leveraged token represents a basket of perpetual contract positions. The price of a leveraged token moves along with price changes in the perpetual contract market, and the leverage level moves up and down accordingly.
Unlike margin trading, leveraged tokens allow you to gain exposure to leveraged positions without having to put up any collateral, maintain a maintenance margin level, or worry about the risk of liquidation.
However, even though you don’t have to worry about the risk of liquidation, there are still risks associated with leveraged token positions, such as the effects of price movements in the perpetual contracts market, premiums, and funding rates.
Binance Downloadable Apps
Besides trading on the web-based app you can also download a mobile version of the app for either Android or iOS operating systems. There are a number of benefits to using the mobile version of Binance, along with a few disadvantages:
- Convenient when away from your computer;
- Instantly access altcoin markets anywhere, anytime;
- Fast trading and analysis.
- Limited charting and analysis tools;
- Not good for large trades or deep market analysis.
Basically the mobile apps are meant for smaller trades, or for monitoring open positions when you have to be away from your computer. The app really isn’t powerful enough to do the detailed analysis necessary prior to opening a trade. The app could also be useful for scalping trades if you’re an experienced trader.
In addition to the mobile app there are also desktop versions of the Binance platform available for Windows, macOS, and Linux. This downloadable app gives you all the power of Binance trading in a standalone app.
Binance Coin (BNB)
Another notable feature of Binance is their own cryptocurrency, the Binance Coin, or BNB. It has made early investors very rich as it was sold for just $0.115 at the ICO for the coin in July 2017. Obviously the exchange was just newly launched at the time and no one knew how popular it could become. As of March 2021 the BNB tokens are the fifth largest cryptocurrency by market cap and they are valued at $224.66. That is an incredible return.
The primary function of the BNB token is not speculation (although many use it for that). Instead it is meant to be used to pay for and reduce trading fees. It will also feature heavily in future plans to create a Binance DAO, where it will be used in the governance of the DAO.
Binance supports the value of BNB by buying and burning BNB tokens on a quarterly basis. The latest burn (the 14th such) was done January 18, 2021 and there were 3.6 million BNB tokens burned, taking out about $165.8 million in tokens from circulation. The prior quarter saw 2,253,888 BNB, equivalent to $68 million burned. By burning tokens Binance decreases the supply and makes the remaining tokens more valuable.
As part of the latest BNB burn Binance CEO Changpeng commented that the burn rate of BNB will be accelerated.
Over the last three and a half years, we have burned about 13% of the promised amount, with a total USD equivalent value (nominal) of $426,304,000. Even though this is an impressive amount for a three-year-old startup, at that rate, it would take roughly 27 years to finish the burn. So, we thought it’s time we speed it up a bit. Exactly how much faster? We are not 100% sure. The current accelerated burn would put the trajectory to be around 5-8 years to finish the 100 million BNB. But a number of factors could change the accelerated part in the future, including BNB price fluctuations, overall market conditions, and more.
Binance Smart Chain
In September 2020 Binance launched their own low-fee, high performance blockchain that’s compatible with the Ethereum Virtual machine. The solution is just one more innovation in blockchain technology and this one is meant to solve the issues in decentralized finance, such as slow transactions and expensive gas fees. With the Binance Smart Chain developers are free to focus on innovating rather than worrying about the gas costs of their dApps.
Even though BSC has only been live for half a year at the time of writing it is growing at an astounding pace. The latest communication from Binance shares that BSC already features over 60 projects, and the average gas cost is just $0.035 per transaction (as of this writing Ethereum gas prices are over $20 per transaction). The number of unique addresses is reaching 60 million and the average daily transaction total is nearing 2.5 million.
Binance has been focused on the growth and innovation around liquidity pool and AMM recently, and there have been a number of innovations built on BSC that take advantage of this. One of the most notable of these is PancakeSwap, a Uniswap clone that gives users some innovative new ways to yield farm and create other income streams.
Binance Finance Products
In addition to providing trading and exchange services Binance has also expanded to offer decentralized finance products. These include staking, savings, farming, and other financial services tied to the Binance ecosystem and/or the Binance Smart Chain blockchain.
Binance Earn is similar to savings on the blockchain, and there is no relationship between this product and trading. Instead it includes savings products that fall under flexible ARY, fixed APY, and high-risk products. Basically these products pay out an interest rate similar to savings account, or the dividends you might receive from owning certain stocks.
The Flexible Terms accounts have interest rates that can change over time. There are 58 assets that can be deposited (as of March 2021) and interest rates range from 0.1% up to 6%.
The flexible savings also includes the Binance Launchpool, where you can stake BNB tokens to earn some of the newest tokens that have been launched on the Binance Launchpad.
Finally there is the BNB Vault. BNB Vault is a BNB yield aggregator. Depositing BNB means participating in Launchpool, Savings, Defi staking and other projects and at the same time gaining rewards.
There are also higher rates available on three stablecoins (USDT, BUSD, and USDC), but it is required to lock them up for a period of time. These locked tokens earn a set rate over the period of time they are locked.
In addition to these there are also 41 PoS staking coins that can be locked for a set period to earn a set, fixed interest rate. Also there are 178 “Activity” products, which are similar to farming pools and offer much higher interest rates.
Finally, Binance offers the chance to stake Ethereum 2.0 tokens as a tokenized Ethereum product called BETH. This will remain locked until Ethereum 2.0 is actually launched, which could be for as long as 2 years. Binance is advertising rewards of up to 20% APY, but the actual reward will depend on the amount of Ethereum 2.0 staked.
High Risk Products
The main high-risk product being offered is DeFi staking, which is a form of providing financial services to users through smart contracts. Existing DeFi projects aim to provide higher annualized earnings for specific currencies.
Also offered is the Dual Investment Pools. Binance Dual Investment lets you deposit a cryptocurrency and earn yield based on two assets. You commit your crypto holdings, lock in a yield, but earn more if the value of your committed holdings increases. It’s basically a way for you to have more control over your risk.
Finally, users can provide liquidity to pools and earn based on the liquidity being provided. While this seems like it should be risk free it is actually high risk. This is known as Impermanent Loss.
Adding liquidity into a liquid pool and becoming a liquidity provider is not risk-free. When the market price of tokens fluctuates greatly, the staking income may be lower than the income of ordinary holding of the tokens, and losses may even occur.
Other Financial Services
- Binance Pool – Supplies mining services, with an emphasis on Proof of Work and Proof of Stake. Basically it uses auto switching to move mining power to the highest value chain at any time.
- Binance Visa Card – With the Binance Visa Card, you can convert and spend your favorite cryptocurrencies at more than 60 million merchants worldwide. Just transfer crypto from your spot wallet to your card wallet, and you’re ready to go. EUR, BNB, BTC, BUSD, ETH, and SXP are all supported and the card is available in most EU countries.
- Crypto Loans – Clients can apply for loans using their crypto assets as collateral, with loan terms from 7 to 90 days. Initial LTV is 55%.
- Liquid Swap – A liquidity pool that traders can either contribute to or use to swap two tokens/fiat assets. Adding liquidity into a liquid pool and becoming a liquidity provider is not risk-free.
The Binance Launchpad is the platform used to launch new tokens. It’s goal is to provide a wider audience for new projects, while also providing the cryptocurrency community with the due diligence to vet these projects prior to launching the tokens.
Binance Launchpad was one of the first crowdfunding token sale platforms, having launched itself back in December 2017. It has had many successful token launches, and is considered to be the most reliable platform for profitable initial offerings. The platform also uses the native BNB token as a way to participate in the Initial Exchange Offerings.
Token Offerings on Binance Launchpad
Binance continues to attract a significant number of users specifically so that they can participate in the new token launches. Those who wish to take part in any token sales do need to complete the KYC verification process as all token sales are carried out in compliance with local jurisdictions.
By visiting the Binance Launchpad website users can see what new projects are coming up, and what the terms of the token sale will be.
Initial Token Offerings on Binance Launchpad use a lottery system for subscribing to the token sale.
The Lottery System
The lottery system used on Binance Launchpad uses the BNB balance of each users account in the 20 days leading up to the sale to determine how many lottery tickets can be purchased, with a maximum of 5 tickets per account.
Binance takes a snapshot of each eligible account on each of the 20 days prior to the token sale. The snapshots provide Binance with the BNB token count, so that they can determine which level the account falls under. If the balance drops into a lower threshold at any time during the 20 days that’s where the lottery eligibility also falls on the lottery date.
Before the actual lottery date, users are given a 24 hour period to select how many lottery tickets they wish to enter, with the maximum number based upon their BNB holdings over the previous 20 days.
The user is required to pay for any winning lottery ticket they hold at the end of the lottery and the appropriate amount of BNB is deducted from the winning ticket’s account as soon as the ticket is determined to be a winning ticket.
Binance announces the maximum number of potential lottery ticket winners, and the allocation amount corresponding to each winning ticket in advance.
Binance has one of the most comprehensive and detailed FAQ bases of any exchange or cryptocurrency project we’ve come across. You can find the answer to most questions in this database, although it might take some searching. In addition you can submit a support request to the support team through the link at the FAQ database.
Binance also has an online chat function that can be accessed here or directly through the trading platform.
One thing that Binance does not provide is telephone support. This can make Binance seem less responsive, but in looking around most cryptocurrency exchanges fail to provide telephone support. Even the more mainstream CFD exchange platforms rarely provide telephone support any longer.
The customer support at Binance is acknowledged to be quite good, and very responsive. That said, during peak periods there are delays experienced by many users in receiving support. Still, the Binance support team is acknowledged as one of the better support experiences with the cryptocurrency industry.
Promotions & Competitions
Binance is quite well-known for its promotions and competitions, which have become very popular among the Binance community. It’s no surprise that these competitions increase the stickiness of the exchange, and encourage increased trading. It’s a method of gamification that we’ve seen work well in many industries.
Anyone interested in seeing what the latest promotions are can do so at the Binance Latest Activity Announcements. Here are the three open competitions when I visited:
- Binance Futures Launches Mondays & Tuesdays Bounty Promo
- SAND Trading Competition – $50,000 in SAND and Limited-Edition NFTs to Be Won!
- Binance Futures Spring Tournament – Over $1,600,000 to Be Won!
As you can see there is ample chance to win just by using Binance as your exchange of choice. New promotions and competitions are launched constantly, and on any given week you’ll have a chance to participate in a fun competition and win some valuable prizes.
Areas for Improvement
Honestly, with so many products and innovations it is difficult to make many complaints about Binance. They are involved in nearly every aspect of the cryptocurrency ecosystem, and any of the products they release are generally accepted to be user-friendly and well constructed.
If we had to choose some areas for improvement we would have to note that customer support is always an area that could use improvement. Anytime a customer has to wait more than several minutes for a response is room for improvement. In the same vein it would be good to see telephone support added.
One further area for improvement would have to be security. While Binance has certainly been quite secure, in the cryptocurrency space there is always room for improved security measures. The good news is that Binance also takes security very seriously and they are always working on improving the security and safety of their clients and the funds on their platform.
Finally, it would be great to see Binance finally transition to a DAO as it claims to be planning. In its current form the exchange is pretending to be decentralized, but is really a centralized exchange.
There’s so few downsides to Binance and so many features that recommend it that it’s easy to say you should be trading with them. You’ll get the lowest fees in the industry, and one of the widest selections of coins to choose from in your trading.
Plus you can explore the rest of the Binance ecosystem, which includes pretty much everything in the universe of blockchain and cryptocurrencies. In fact, it might be fair to say that if it’s blockchain related and Binance doesn’t already have it, there’s a very good chance they are working on it.
Most recently we saw this with the release of the Binance Smart Chain, which is a perfect addition to the DeFi ecosystem. It’s faster than Ethereum, it’s cheaper than Ethereum, and it has support for the Ethereum Virtual Machine.
And if you look into the BSC block explorer you’ll see that it’s growing massively. Average daily transactions have gone from under 500,000 on January 1, 2021 to roughly 2.5 million in March 2021. Plus the number of active addresses has gone from 2 million to nearly 60 million in the same time.
With the addition of fiat currency exchange in many countries around the world, and the DeFi farming and saving, plus a crypto debit card, a community that’s actively involved in the growth and improvement of the platform, and the many other innovations from the exchange it’s safe to say that Binance will be a leader in the blockchain universe for some time to come.
Featured Image via Binance