Binance Review: What Makes It Such a Great Exchange?
If you have any tangency with the crypto world you have most likely heard of Binance. Binance is a cryptocurrency exchange which was established in 2017 in Hong Kong. The platform has become very popular in its two years of existence due to the diversity and features of its trading options.
Beijie Technology, the company of CEO and founder Changpeng Zhao of Binance.com, launched the exchange after it raised $15 million in one of the most successful ICOs of its time.
As China started cracking down on various aspects of the crypto industry, the company relocated its main office to Malta, an island country that has friendlier crypto regulations.
In our review for today, we’ll be looking into the factors that make Binance the popular crypto trading platform that it is today.
What Makes Binance Such a Great Exchange?
Binance’s platform features two interface options for its traders: basic and advanced.
The basic version is oriented more toward beginner traders, the dashboard displays graphs and charts for trading pairs, order books, and the trading history. The advanced mode comes with a more technical and detailed analysis of crypto prices over a longer time spread.
The Basic interface was designed to ensure smooth navigation, with information conveniently placed for quick access; prices on the left, buy and sell boxes and the trade history on the right, and graphs in the middle.
The Advanced interface comes in a dark theme with more detailed trading charts, featuring the latest trade prices on the right.
Wide Range of Cryptocurrencies
Binance is known for having one of the most diverse and expansive crypto listings on the market. Traders have access to more than 100 coins and tokens, with pairings to Bitcoin, BNB (Binance Coin), Ethereum, XRP and USD-backed stable coins (USDT, PAX, USDC, TUSD, USDS).
The exchange supports popular cryptos such as Bitcoin, Bitcoin Cash, Dash, EOS, Ethereum, Ethereum Classic, IOTA, Litecoin, Monero, and Neo, in addition to many other altcoins and exotic tokens.
The exchange applies an average fee of 0.1% for each transaction, which is below the market average of 0.2%-0.25%.
Deposits incur no costs, aside from the obvious blockchain fees. The withdrawal fees are usually linked to the blockchain transaction fees, and constant updates are applied to ensure the price is fair.
Transactions have quick processing times, even when you are trading in large volumes. Compared to most top exchanges on the market, Binance has some of the lowest latencies to date.
If you use BNB, the native token of the Binance ecosystem, in making a trade, you will get a 25% discount on your trade fee. Also, when you hold BNB in your account, the trading fees will be deducted by default from your BNB balance.
Binance applies limits only to withdrawals, with non-verified users having a withdrawing limit of 2 BTC every 24 hours. Accounts that have been verified have a withdraw limit of up to 100 BTC per day.
The verification process is quick and easy, and it requires filling out a basic Know Your Customer (KYC) form with your personal information (full name, country, gender), and proof of identity (selfie with your ID) among other documents.
Since 2018, the exchange has had the largest volumes in the crypto world. With high volumes, traders are able to quickly transact at market price without affecting the asset’s value. This is why the platform has a low spread, as high volumes are correlated to this aspect.
In terms of security, Binance platform implements an ISO/ICO_27001:2013 architecture and CCSS security protocols. The exchange also supports 2FA, a feature which must be enabled in order for an account to be verified.
The 7000 BTC Hack
On May the 7th, Binance lost 7,000 BTC from their hot wallet in a compl
ex hacking attack that involved a combination of phishing, viruses and other malware.
This calculated attack enabled the hackers to get their hand on a large number of 2FA codes and API keys. The hack targeted Binance’s “hot wallet,” which held just 2 percent of its total bitcoin funds for trading liquidity. The rest of the crypto funds are presumed to be held in cold wallets.
The 7000 BTC transaction managed to not be detected by the existing security system, and that is why Binance could not stop the transfer when it was executed. After the transactions were made, the alarms went off and all withdrawals were immediately halted.
Fortunately, the loss was covered by funds from SAFU. SAFU, or Secure Asset Fund for Users, is Binance’s fund which was founded in July last year, where 10% of trading fees are allocated. The SAFU fund was created in order to provide some insurance to user holdings to lessen any damages a hack might bring.
Changpeng Zhao has been transparent in addressing the community’s concerns over the hack and held the following day a live Ask-Me-Anything session on Twitter.
He gave details regarding the nature of the attack and how it happened, and that the exchange will strengthen its security.
The CEO also tweeted that the exchange was considering going through a blockchain re-org but it eventually decided against it.
While this approach would minimize the damage, it was met with heavy criticism from the community. As such, Binance did not go through with this as it would damage the decentralization and credibility of bitcoin and cause a rift between the network and community.
The exchange has always been transparent when it came to its security breaches and have been very proactive in their approach. In a previous hack from 2018, they offered a substantial bounty of $250,000 for anyone that caught the hackers.
The 2018 hack involved fake Binance sites where users unknowingly put in their sign-in credentials and 2FA details. The automated system stopped the hackers from tacking any funds.
Their swift action and transparency have earned the trust and respect of the community.
Users have reported that Binance’s support service has been responsive and professional, being prompt when it came to offering aid to their customer’s problems. The exchange can be reached via support tickets by completing an online form available on the website, with the responses sent back through email.
Many traders have had a positive experience with the exchange, both in terms of trading and support.
A customer service bot chat is also available on the platform, but several responses to common questions are automated.
The only problem reported was regarding 2FA/SMS confirmations. But this is more of a technical issue, and the accounts that have used Authy instead of Google Authenticator did not report such problems.
User feedback and community reputation
When it comes to giving user feedback, Binance has had a very responsive attitude. Recently, Binance users complained about high withdrawal fees, and the exchange changed its fees to be significantly lower for many cryptos.
Even though the exchange does not have such a strict verification process and operates in a country with laxer regulation, Binance has the reputation of being a reliable and trustworthy exchange.
But this trust did not come overnight; it was earned the hard way. Due to its popularity, it obviously handles a large amount of crypto funds at any given time, and thus it is the target of many hackers.
However, in spite of the attacks it sustained so far, it managed to survive and rebound after losses that would have normally left most exchanges crippled.
The exchange and its CEO have an active presence on various media platforms (especially on Twitter), doing their best to keep users informed regarding their activity and developments. All in all, Binance has been praised for its direct communication with its community.
Changpeng Zhao, probably the only man in the crypto industry that is known by two letters, (as his Twitter handle is CZ_Binance), has always been very active in the Twitter community, holding many AMA sessions to address company matters (or just quipping in with some funny retweets).
CZ’s love for freedom and crypto is what connects people from the Binance user base, and this unity is shown each time the exchange goes through a rough patch.
Why It’s Great for Traders
After over three years of trading experience on 5+ exchanges, you know what you want and don’t want from an exchange.
One example of how price spikes can get you liquidated from your position is the Poloniex exchange case. Back in May 26, its bitcoin margin lending pool lost 1800 BTC, approx. $13.5 million at current market prices, because the Clams (CLAM) market rapidly crashed.
The Clams (CLAM) market dropped by nearly 77 percent in value in just 45 minutes on Poloniex, which resulted in a series of mass liquidations. Even though the liquidation system was implemented to cut losses so that the lender can be repaid, the crash happened so fast that the system was not able to properly function.
In the aftermath, 16.202 percent of the entire margin lending pool was erased and 0.4 percent of the entire Poloniex user base was affected. The lenders that lost funds from the pool have not yet been repaid.
Margin Trading to Be Added Soon
The exchange recently posted a subtle hint that it will soon be implementing margin-trading options. Binance CEO Changpeng Zhao revealed that the margin trading feature is still in beta testing phase. No other specifics where given, with a Binance representative stating that margin trading will be added “soon” on the exchange.
The implementation of the margin trading feature is the newest of Binance’s stream of developments. Not long ago it launched its own decentralized exchange platform called Binance DEX, established a fiat-to-crypto exchange in Singapore and revealed a new Australian platform where users can make BTC purchases with cash.
The addition of so many features and services are part of Binance’s desire for expansion.
US Trading Platform and User Bans
At the beginning of June, Binance announced that it will be banning users from the US and 28 other countries from accessing its decentralized exchange portal, and will stop serving US-based customers altogether in the following months.
However, the exchange has plans of launching a separate platform dedicated exclusively to U.S. trading called Binance.us.
According to the documentation released by the exchange, the US platform will be developed in collaboration with BAM Trading Services, an organization that was recently approved by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
Binance’s decision to go through with the U.S. ban most likely stems from the country’s regulatory framework which is rather convoluted when it comes to crypto maters.
By blocking certain users from accessing its trading services or certain tokens that might conflict with the country’s regulation, this will enable Binance to maintain its tendency to self-regulate itself.
Binance’s popularity is not unfounded; the exchange has a wide selection of coins, low trading fees, high volume, and is always dedicated to its customers. They have always handled any hacks or issues in an exemplary fashion, with efficiency and transparency, something which is rare in the crypto exchange industry.