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What is Binance Exchange?
The Binance exchange is an exchange founded in 2017 with a strong focus on altcoin trading. Binance has quickly grown to become of the most popular cryptocurrency exchanges, offering trading in more than 500 cryptocurrencies and virtual tokens (but only about one-tenth of that amount of names for U.S.-based customers) including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Dogecoin (DOGE), and its own token Binance Coin (BNB).
Binance is an online 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.
The exchange also has supporting programs that help traders make investment decisions.
Binance has its own blockchain-based token, Binance Coin (BNB).
Understanding the Binance Exchange
Primarily known for crypto-to-crypto trading—that is, trading between two cryptocurrency pairs and not national currencies like dollars or yen—The 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. Its exchange services were launched in 2017.
The name "Binance" is based on a combination of the words 'bitcoin' and 'finance'. 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.
Binance is limited for U.S. customers, with fewer names available to trade. Furthermore, 22 U.S. states, including New York, are not yet supported by Binance US as of 2021.
Trading on Binance
Like other crypto exchanges, Binance 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:
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 do come with a transaction fee that varies depending upon the cryptocurrency and amount.
As of 2021, Binance only allows for U.S. Dollar deposits by global users via SWIFT, but it does allow you to directly purchase a select number of cryptocurrencies with a credit or debit card. Deposits using 12 other fiat currencies are allowed, including the Euro.
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.
Binance Coin (BNB)
Binance Coin (BNB) is the platform's internal token that is used to facilitate crypto trading on the Binance exchange. The coin was launched during an initial coin offering (ICO) in July 2017. Binance offered 10%, or 20 million, BNB tokens to angel investors, 40%, or 80 million, tokens to the founding team, and the remaining 50%, or 100 million, to the various participants through the ICO process. Almost half the funds raised during the ICO process were intended to be used for Binance branding and marketing, while around one-third were used to build the Binance platform and perform necessary upgrades to the Binance ecosystem.
Binance Coin runs on the Ethereum blockchain with ERC 20 standard, and has a cap of 200 million BNB tokens. As of Q1 2021, one BNB is worth around $650 and is the third most valuable blockchain-based token by market cap, at roughly $3.6 billion.
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