With more than $100 Billion of daily trading volume, Binance is known as one of the biggest crypto exchanges in the crypto sphere. There is no doubt that this exchange counts among one of the largest crypto exchanges of all-time.
What makes Binance unique is its fee structure, buying, selling, and trading crypto assets on this exchange is comparatively cheaper than any other exchange on the market. This is one of the primary factors for the platform’s popularity. Low fee structure not only benefits the users, it is also advantageous for the platform itself.
This is a complete guide that demonstrates the trading fee model of Binance for its trading products and services. This complete Binance fee review will help you to get a better idea of what to expect when making trades.
Discounts on Binance: The Biggest Crypto Exchange
Binance was established in 2017 by a Chinese national Changpeng Zhao. The platform had an impressive strategy to promote its native cryptocurrency BNB and offered a 50% discount to its users who choose BNB to pay for trading fees.
Binance was one of the first biggest crypto exchanges to follow a tired based discount on trading fee that is updated every year. In the very first year, the discount rate was 50%, then in the second year 25%, for the third year it was 12.5%, and 6.75% in fourth year. This means that the exchange will continue to offer appealing discounts for its users starting in the fifth year onwards.
There are different aspects that Binance keeps in account when determining trading fee for a user. These factors include:
- prior 30-day trading volume
- BNB holdings
- If the user is a market maker or taker
The tired based system is categorized into 10-level tiers following through VIP-0 to VIP-9. The platform uses prior 30-day trading volume to place users into relevant tire levels. The bigger the size of your trade is, the higher you will rank in the tier levels that also qualifies you to impressive discounts on trading fees. In addition to the trade size, if you have significant BNB holdings your tier level will be higher.
Finally, comes the maker and taker model of Binance, it defines how much a user is supposed to pay in their tier level. Makers are basically the users which make trades to a convenient price point. These traders are known as makers because they bring liquidity to the marketplace. Thus, makers are rewarded with further discounts on trading fees.
On the contrary, takers are the users who place orders, and these orders are filled immediately. These orders take liquidity out of the market; thus, the traders are referred to as takers.
Deposit & Withdrawal Fees
Binance is one of the largest crypto exchanges offers a huge number of deposit and withdrawal gateways. Their accessibility to a specific user relies upon the geological area. Although, when it comes to the lists of supported payment methods there are some important things you should be aware of before trading.
Depositing crypto or any other digital assets is completely free on this biggest crypto exchange. However, the user is charged with networks that charge transaction fees for processing a transfer. Explaining it in simple words, if the user is depositing Bitcoin within a Binance account, then the Bitcoin miners will certainly charge a specific transaction fee for utilizing the network.
Essentially, fiat transfers on Binance will cost you an exchange charge contingent upon the deposit method used. If you make a payment through credit or debit cards then it will cost more. In any case, Binance won’t charge any extra expenses despite the trading fee mentioned above. Moreover, the exchange poses charges on any kind of withdrawals from the exchange wallet.
Futures Trading Rate
Binance also offers users to tap into derivatives markets along with spot trading options. Spot trading includes trades that are settled real-time on the market price (i.e., on the spot). Whereas futures or leverage trading, are the agreements between users to settle or schedule their trade at some specific time and a predetermined price.
This is one of the biggest crypto exchanges that offers Futures contracts that expire either quarterly or never expire. Contracts that are settled for the latter are often known as perpetual Futures. Moreover, users on Binance can avail up to 125X leverage on their collateral.
Concluding it all, Binance comes on the top among biggest crypto exchanges in the market with million-dollar daily trading volume. The primary reason for the popularity of this exchange is that it has a competitive fee structure that makes it stand out from the rest.