DEFINITION of Binance Exchange
BREAKING DOWN Binance Exchange
Primarily known for crypto-to-crypto trading - that is, trading between two cryptocurrency pairs - Binance exchange has gained immense popularity in recent times owing to its low transaction fees, high liquidity, and additional discounts if users pay in the native BNB cryptocurrency tokens. (See also, Binance Coin (BNB) Definition.)
The Name Binance is Based on a Combiantion of Binary and Finance
Binance is based in Tokyo, Japan. Its exchange services were launched in the year 2017. It takes its name from the selective combination derived from the words “Binary Finance,” representing the emerging digital financial system. 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 45 coins, including popular ones like Bitcoin, Ethereum, Litecoin and its own native BNB tokens, and the list continues to grow.
Like a standard exchange, it offers services around trading, listing, fundraising and de-listing/withdrawal of cryptocurrencies. Cryptocurrency enthusiasts willing to launch their own tokens can use Binance for raising funds through initial coin offerings (ICO). Binance is used by a large number of traders and participants for exchanging various cryptocurrencies, and for investments in the same.
To start trading, users have to complete the necessary KYC requirements. Upon successful trading account creation, users can add cryptocurrency funds to the public wallet address provided by Binance to start trading.
Binance currently 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.
There is no fee charged for cryptocurrency/fund deposits, though withdrawals come with a transaction fee that varies depending upon the cryptocurrency.
In addition to exchange specific services, Binance also offers other tools, platform and services for supporting the overall blockchain ecosystem.
Binance has a blockchain technology incubator called Binance Labs, which focuses on nurturing the promising pre-ICO stage projects. It helps deserving cryptocurrency project teams by providing necessary funding for development, advisory resources, and a launch pad for any necessary listing and fundraising exercises.
Binance also offers a site called LaunchPad for hosting new and emerging blockchain projects. One can also create APIs - application programming interfaces.
It launched its own Binance Coin (BNB) cryptocurrency through the initial coin offering (ICO) in July 2017. BNB has gained popularity and actively trades with a market cap of around $1.4 billion as of early April 2018. It is set to become the native currency of the decentralized Binance exchange. (See also, Coinbase: What Is It and How Do You Use It?)