Blog

Introduction

Binance is one of the top spot for trading ALT coins, BTC, and a general mega hub for crypto related activities. With hundreds of different trading pairs, saving, staking, margin trading, and other features. Binance has become a one stop shop for most people looking to dabble in crypto.

The exchange has so many features that it may take a while to get used to but for those looking to simplify the number of exchanges they’re using, Binance offers nearly all the things you’d want in one place.

UPDATE October 2020:

With the recent turmoil going on with Bitmex, many traders are considering other exchanges. Binance has become an extremely popular option as it offers leveraged trading on BTC and ETH; with the ability to buy long or sell short. Although it offers leverage and trading long/short we’re not of the opinion that it’s a good hang out for MARGIN(different from the futures) trading as their system of borrowing funds is confusing, “scary”, and a little bit annoying. More on this later. Although, you can simply avoid this by using their futures/derivatives platform.

Overview

If you want to “trade the world” you’ll probably head to Binance to trade some ALTs. Binance is the worlds largest cryptocurrency exchange, with millions of registered users.

Binance was founded in 2017 and within a years time rapidly gained “brand name” recognition in the cryptocurrency market as a trustworthy exchange with lots of alt coins available.

Although their recent expansion into saving, staking, derivatives and other crypto assets might be welcomes by some, it might seem overwhelming and a bit overkill for others.

Wallets

Binance used to just offer a spot market for trading ALTs against Bitcoin, but the exchange has evolved far beyond that.

Here is a look what you’ll see if you have a Binance account.

Spot Wallet: As you’d imagine this is where you can trade ALTs for BTC and vice versa, Binance has pretty much every coin you’d be looking to trade, but some newer coins might not be listed on Binance right away.

P2P Wallet: This is a very interesting feature; according to Binance

“In a P2P trade, the user can set up a trade with a preferred price, amount, and payment method to directly deal with the counterparty, exchanging the fiat asset offline and confirming the transaction online. The crypto asset remains in the Binance.com escrow wallet until the seller confirms receipt of the money.”

Binance

This is a great feature to help protect yourself when selling crypto in person or for doing any other in person deals with a crypto currency, which might benefit from the use of an escrow service.

Margin Wallet: This wallet allows you to trade ALTs with leverage, allowing you to greatly increase your profits, but at the risk of a margin call. There is great potential for rewards here, but it’s only advised for seasoned ALT coin traders.

Futures Wallet: Futures are derivative options or “contracts” similar to how the Bitmex exchange works on crypto currencies. I won’t get into how they work, but Binance is one of the many exchanges that offers these products.

Savings Assets: This is where you can gain interest on your crypto coins. This can be very lucrative and enticing. Some coins and saving Assets offer very high interest payments. Banks typically offer less than 1% on your deposited money, but Binance offers interest of up to 8% on some of their savings products.

WazirX Wallet:

Trading and User Experience

Binance has a lot of features. In fact the platform is so extensive it can feel overwhelming to use even for experienced crypto traders and enthusiasts. New comers to Binance would benefit greatly from reading up about what’s on offer and how things work.

Lets’ get into it!

Exchange Features:

• Spot Trading
  • Buy sell or trade ALT coins and major cyptos on the spot market.
• Margin Trading
  • Borrow from the exchange to make bigger trades
• Futures Trading
  • Trade with leverage up to 125x on some assets
  • Perpetual, and quarterly contracts
  • Coin Futures
  • USDT Futures
• Options Trading
  • Trade Calls or Puts
• P2P Trading
  • Bank Transfer and other options
• Buy and sell Crypto with/for fiat (fiat on and off ramp)
  • Buy with credit or debit cards
  • Transfer profits into your bank
• Leveraged Tokens
  • Bigger profits without the risk of liquidation
• Battle
  • Guess what the price will be in 5 minutes and win points
• Finance
  • Earn
  • Pool
  • Loans
  • Liquid Swap

User Interface

If we have a quibble with Binance it would be about the not so user-friendly nature of the exchange. The overwhelming amount of coins, features, and trade options makes using Binance come with somewhat of a learning curve. A few years back, the exchange was simple and easy to use, but since that time they’ve added so many features it’s become a proverbial minefield of features. Although, once you’ve spent enough time using Binance this may not be an issue, we still feel the overall feel and design of the platform could use some improvement.

We emphasis this because many users may never even bother to look at some of the more ‘hidden’ features of the exchange such as staking, options, liquid swaps, etc…

Basic Trade View

Pictured above is the “classic”/ basic trade layout, which is simple enough. It has all the features you’d expect. You can see the order book, price chart, and a place to put in your orders.

At the bottom it will show your trade history, open orders, order history, and funds.

Binance gives you the option to use an “Advanced” view if you so choose, which gives you a bit more customization over how the layout looks.

Advanced View

With the Advanced View, you have the option to drag and drop the chart, order book, and trades to different locations. You can also drag to increase or decrease the size of the different elements.

Furthermore, you have the option to X or delete something entirely off the screen. We prefer the Advanced view as we don’t really want to see the recent trades and prefer to have less clutter on our dashboard when trading.

Market Overview, Zones, and Markets

Recently, Binance has added some nice features which give you a better overview of the market(s) and individual assets. You can easily scroll through, apply filters to screen for assets, and get a sense for what’s going on in the market.

You’ll have a few sections to peruse through: Spot Market, Futures Market, Zones, and Favorites

The zones easily let you sort the market by coin type or function. Defi assets, Proof of Work, Proof of Stake, Storage, and Innovation.

Opinion

Overall the trade platform works well, without significant lag, but for some reason it feels a bit sterile and impersonal. The advanced/ classic interface to us feels ‘cold’ and hard to connect with. It’s hard to put our finger on exactly what it is, but maybe you’ll notice it or maybe you wont, to each his own.

We do like the market overview features and zones. These days it’s easy to get lost and a bit confused in the crypto-sphere. With new projects and coins coming out nearly every week, it’s great to have features that organize assets by category and a dashboard which helps you view the market as a whole.

Margin Trading

Binance offers cross and isolated margin on many spot market coins. Typically they’ll offer you 3x on cross margin and 10x on isolated margin. Our recommendation is to avoid using margin on Binance.

Why don’t we recommend using margin on Binance? In essence the system of borrowing margin is confusing and adds extra risk onto your trades. Instead we recommend you use their futures trading, which offers up to 125x leverage, with much less confusion.

When you borrow funds for margin trading you’ll be assigned an amount of “debt” which you owe Binance. Furthermore the debt will accrue interest. Once you’ve closed your trade, you’ll have to pay back what you’ve borrowed plus the interest. Meaning if you had 0.5 BTC and borrowed another 0.3 you’d have to pay back the borrowed amount plus interest.

Binance does have an automated feature to pay back the funds when you close your trade to make things a bit easier, but keep in mind, you can still be subject to margin calls.

Furthermore, when you do go to pay back the owed amount, there will be some “dust” left behind on all these transactions. One annoying thing about Binance is that all transactions are subject to “dust”.

Dust is a minuscule fraction of a coin which is left behind after a trade, or transaction. The dust usually accounts for cents on the dollar. The annoying thing about paying back interest and debt with the margin function on Binance is that even if you choose to repay 100% you’ll still see some “dust” remaining to be paid. You can pay it all off, but will require you to make a second transaction to pay of the remaining dust.

Another strange feature of Binance is that you have to transfer your funds between all these different “departments”. Meaning, if you want to trade on margin you’ll have to move your assets from your spot wallet into your margin account. If you want to trade futures you’ll have to do the same. Essentially, it’s like having several different wallets/accounts on a single platform.

Futures/ Derivatives Markets

The futures and derivatives markets on Binance are similar to what you’ll find on places like Bitmex, Bybit, and other popular margin exchanges. Unlike the margin trading on Binance, these markets do not use spot assets, but rather are derivatives that track the price of the underlying asset.

There are two types of derivatives markets on Binance, USDT denominated markets, and COIN-Margin assets. You have the option to get your payouts(settlement) in a stable coin, or in a crypto asset like BTC or the underlying asset you’re trading.

Let’s use an example to clarify how this works. Let’s say you’re going to trade a Coin-Margin asset. Let’s say you trade BTC/USD on a Coin Margin contract. Your settlement will be paid out in the underlying cryptocurrency; in this case BTC.

Whereas if you trade USDT contact you’ll be paid out in USDT.

There are a few advantages and disadvantages to each type of contract which we wont fully discuss here, but will provide a brief insight instead.

In bull markets the use of coin based futures contracts can multiply your overall account value, as the cryptos will tend to rise with the bull market, making the value of your profits increase as well. Miners and people looking to hedge their crypto can also short BTC with coin based contracts, allowing them to lock in a USD value, and hedge against market fluctuations.

Trading in USDT is a strategy which might be employed during a bear market, as payouts are more stable and less likely to lose value. They are also a bit easier to understands as profits essentially translate into a dollar value.

Margin up to 125x

Binance allows up to 125x leverage on some assets, although we don’t recommend using leverage this high.

The trade dashboard of the futures/derivatives area is similar to what you see on the rest of the site. They offer perpetual contract, quarterly, and bi-quarterly contracts.

Note- This isn’t totally straightforward, but the numbers next to the “Quarterly” are the expiration dates on the contracts. BTC Quarterly1225 will expire December 25th, and Quarterly0326 will expire March 26th.

You can buy long, sell short and have a all the common options for advanced orders such as:

Adanced Order Options:

• Reduce Only
• Post Only
• Good till cancel
• Immediate or cancel
• Fill or Kill
• Take profit/stop loss orders
• Limit order
• Market order
• Stop Limit/Stop Market/ Trailing stop

Opinion

Binance offers by far the most trading pairs for derivates trading at the moment. With scores of trading-pairs settled in both crypto(coin) and USDT. The platform performs well, has good liquidity, and will be easy enough to get accustomed to for most traders. Nevertheless, we feel the overall feel of the trading dashboard is cluttered and a bit distracting. With a few small improvements the UI and overall experience would be a lot more enjoyable. Lastly, we think that the plethora of trading pairs is a bit of a double edge sword. Profits from margin trading can be significant, and many will disagree with me here, but we feel being more focused and margin trading on major assets only is the most effective way to make use of derivatives trading. It’s easy to spend too much time looking at charts of hundreds of different assets rather than trading. Plus extreme volatility on the ALTs can be somewhat hazardous when it comes to trading with margin.

Leveraged Tokens

Leveraged tokens are a relatively new asset which allows to use leverage without the risk of liquidation. They are a basket of underlying leveraged positions on the spot market. There is no need for posting margin, or the worrying about margin calls or liquidations.

The tokens do have their own uquine set of fees such as:

• Subscription fee –0.1%
• Management fees– 0.01%
• Redemption fee — 0.1%

Fiat On and Off Ramp

Binance offers a host of options to buy and sell cryptos with credit cards, bank transfers and other methods. Furthermore, you can sell your crypto assets and store fiat currencies in your wallet on Binance. They offer loads of different currencies to choose from, everything from major currencies such as USD, EUR, GBP to more exotic currencies such as THB, SGD, MXN, KZT, and many more.

Notes-

There are a few verification processes you’ll need to complete before you can use the Binance fiat/crypto ramp. Essentially you’ll have to verify your identity and provide KYC information in order to be able to perform these types of transactions.

Finance

Binance offers a lot of convenient ways to earn interest, dividends, and generally put your crypto to use, instead of it just sitting on the exchange wallet.

The features we’ll cover in this review are Earn, Loans, and Liquid Swaps

Earn

Offering things like fixed and flexible savings options, Defi Staking, Launch Pools, and Asset Management you should be able to find a way to put your crypto to use, and earn passive income from your holdings.

Flexible Savings

Deposit and earn interest on your assets. Withdrawal your assets at anytime. With over 50 different assets to choose from for flexible saving there are a lot of options. Furthermore the annual interest rates(APY) vary anywhere from 0.25% up to 10% or more.

Fixed Savings

Similar to flexible saving, except there is a fixed amount of time your money will be “locked” or fixed. Fixed term lengths are as follows

• 7 days
• 14 days
• 30 days
• 90 days

As you increase the length of the savings term you’ll get a better APY. Furthermore, there are far less assets to choose from. At the time of writing this article there are only 4 assets to use for “Locked” savings.

90-day terms offer up to 7% interest on assets such as USDT and BUSD.

Locked Staking

Locked staking is “staking” your coins, or holding them in a wallet which supports the operations of a specific block-chain or coin. In return for “staking” your coins you’ll be rewarded with interest, transaction, fees or other methods which provide reward payouts.

At the moment Binance offers about 30 assets for locked staking which offer anywhere from about 2%-31% APY usually on the 90-day fixed term.

DeFi Staking

Similar to locked staking DeFi staking is a way to provide financial services to others through the use of blockchain and smart-contracts.

Why use DeFi Staking?

Easy to use: You don’t need to manage private keys, acquire resources, make trades, or perform other complicated tasks to participate in DeFi Staking. Binance’s one-stop service allows users to obtain generous online rewards without having to keep an on-chain wallet. 2. Funds are safe: Binance selects only the best DeFi projects in the industry and monitors the DeFi system in real-time while it’s running in order to reduce the risks associated with such projects. 3. Higher earnings: DeFi Staking does away with the exorbitant fees that come with trading capital. With the consistent level of risk, users are able to earn the highest possible returns in the best way.

Binance FAQ

Wrap Up

Pros:

• Options to choose exchange layout: from beginner to advanced to pro
• Wide selection of products: leveraged trading, saving features,
• You can stake your coins to earn more, or put them in a savings account for interest
• Widely used, big market, well trusted and good history.
• Can purchase BTC directly on the site with a credit or debit card, many other options are available.

Cons:

• Can be overwhelming for someone new to the cryptosphere
• Binance has a special site for US customers
• Fees could be better
• Collect “dust” upon trading and withdrawing coins, but dust(fractions of coins often worth less than a cent) can be converted into BNB coin, which is a plus

Conclusion:

Overall I highly recommend using Binance. Good liquidity, a huge selection of ALT coins, good security and measures in place to protect customers. The other plethora of products from savings, to staking are also a great addition to an already great place to trade crypto.