What Is the Binance Exchange?
- Binance is an exchange where users can trade cryptocurrencies. They support many of the most commonly traded cryptocurrencies.
- Binance provides a crypto wallet for its traders, where they can store their electronic funds.
- Binance has its own token currency, Binance Coin.
- The exchange also has supporting programs that help traders make investment decisions.
Understanding the Binance Exchange
Primarily known for crypto-to-crypto trading—that is, trading between two cryptocurrency pairs—Binance exchange has gained immense popularity because of its low transaction fees, high liquidity, and additional discounts if users pay in the native BNB cryptocurrency tokens.
The name "Binance" is based on a combination of the words binary and finance. Its exchange services were launched in 2017. It claims high standards of safety and security with multi-tier and multi-clustered architecture and delivers high processing throughput with the capacity to process around 1.4 million orders per second. It supports trading in more than 150 coins, including popular ones like Bitcoin, Ethereum, Litecoin, and its own native BNB tokens, and the list continues to grow.
The name "Binance" is based on a combination of the words binary and finance.
Like a standard exchange, it offers services around the trading, listing, fundraising, and de-listing or withdrawal of cryptocurrencies. Cryptocurrency enthusiasts willing to launch their own tokens can use Binance for raising funds through initial coin offerings (ICOs). Binance is used by a large number of traders and participants for exchanging and investing in various cryptocurrencies.
To start trading, users have to complete the necessary KYC requirements. Upon successful trading account creation, users can add cryptocurrency funds to their public wallet address provided by Binance to start trading.
Binance supports three types of trade orders: limit, market, and stop limit orders. Limit orders are executed only at the limit price set by the trader, market orders are executed immediately at the best available market price, while stop limit orders become valid orders only when the price reaches a specified level.
Binance offers an additional five types of orders for crypto derivatives, specifically on futures contracts. These trade orders include:
- Limit order
- Market order
- Stop limit order
- Stop market order
- Trailing stop order
- Post only order
- Limit TP/SL order
There is no fee charged for cryptocurrency/fund deposits, though withdrawals come with a transaction fee that varies depending upon the cryptocurrency.
Advantages of Binance: Additional Services
In addition to exchange-specific services, Binance also offers other tools, platforms, and services for supporting the overall blockchain ecosystem.
Binance has a blockchain technology incubator called Binance Labs, which focuses on nurturing promising pre-ICO stage projects. It helps deserving cryptocurrency project teams by providing necessary funding for development, advisory resources, and a launchpad for any necessary listing and fundraising exercises.
Binance also offers a site called LaunchPad for hosting new and emerging blockchain projects and API interfaces. As of March 2021, 42 projects have been launched.
It launched its own Binance Coin (BNB) cryptocurrency through an ICO in July 2017. BNB has gained popularity and actively trades with a market cap of around $36.4 billion as of March 2021. It is set to become the native currency of the decentralized Binance exchange.