Crypto Exchanges have come a long way since 2009. The market has seen the rise and fall of the fair share of crypto exchanges over the years. This evolution of the exchanges has led to the birth of some of the most technologically advanced exchanges that operate 24X7 across the year whilst handling billions worth of assets on their platform.
If you are just entering the world of crypto trading and investment, navigating through the exchanges might seem a little overwhelming amongst all the options one can choose from. To help you out, in this article we will be comparing two of the top crypto exchanges you can choose from, Binance and FTX. Both of these exchanges are not more than 5 years old, but they were able to capture the market with their innovative products and features.
Currency and Products Offered
When looking at the types of product both the exchanges have to offer we can say that both have quite a lot of similarities based on their general offering. Where we see the major difference is that Binance is more focused on the spot market and have a wider offering of currencies there, whereas for FTX the major focus is on the derivatives market. Both the exchanges also have products that are unique to them such as Binance has Binance Earn, Crypto Loans, P2P market, etc. While FTX has volatility and prediction markets. Also, we see that both these exchanges are venturing into the NFT market and just released their NFT marketplace.
User Friendliness
Both these exchanges have a very clean and user-friendly web and app interface. It might be a little hard for a complete novice to understand the interface but in case of a trader with some experience will easily navigate through the exchange. However, here we believe Binance has an upper hand due to its rich resource library called Binance Academy. Binance Academy not only helps users understand how the exchange works but also help users understand how the crypto market works and the latest trends in the market.
Fee Structure
Both the exchanges charge very low fees on their spot trade market and the fees keep getting lower as the volume increases, however, here FTX takes the win as it charges 0.02% as maker fee and 0.07% as taker fee at tier 1 accounts. This is significantly lower than what Binance charges, i.e. 0.1% maker and taker fee. Matter of fact even after using native currency BNB for the trading user will have to pay 0.075% as a fee, which is still higher than what FTX is charging. Therefore, in this category, FTX is a winner.
Security
Security is one of the biggest factors to decide which exchange to choose and we can gladly say that both the exchanges do well in this category. Both the exchanges use 2FA and keep the account funds and data safe. Both the exchanges insure their funds by putting a certain amount of fee away as an insurance fund. However, we see that FTX also do 3rd party transaction audits via Chainalysis and have never been hacked unlike Binance therefore we slightly favour FTX here.
What is FTX?
FTX is a centralised cryptocurrency derivatives exchange that was founded in May 2019 by Sam Bankman-Fried (currently the CEO) and Gary Wang (currently the CTO). Originally it had its headquarters in Hong Kong, but in September 2021 its headquarter moved to the Bahamas. Over its 2 years of existence, the exchange has been able to rise to the level of top tier exchanges with a strong userbase and high daily trading volumes. As of 2022, the FTX has more than a million registered users and an average daily trading volume of billions of dollars.
FTX is largely focused on the derivative and prediction market offering a plethora of futures, options, and volatility products. It has more than 290 listed crypto assets on its platform trading daily. In 2020 the exchange gained a lot of attention for issuing President 2020 futures contracts such as TRUMP-2020 and others which allowed traders to speculate on the outcome of the U.S. presidential election.
Futures
FTX have a lot to offer in this field with one of the highest number of crypto asset products compared to any other product segment in the exchange. The exchange has more than 80 cryptocurrencies in its futures segment which is quite a lot when compared with other top exchanges. The unique thing about FTX’s futures is that it offers many lesser-known currencies in its futures market. This allows traders to have more options to gain exposure in these low market cap coins. Another feature of this segment is that it offers very high leverage to its customers. These futures contracts are divided into three types; maturity, perpetual and index.
Security and Insurance
Like any other top tier exchange, FTX puts a lot of emphasis on its security protocols. It has placed all the necessary protocols at various levels to protect its customers’ funds from hackers. Some of these protocols include:
- password strength and 2FA requirement;
- 2FA for withdrawals & withdrawal password;
- withdrawal lock after 2FA removal or password change;
- tracking and notifying users of any suspicious activity;
- subaccount functions (allowing others to access account with limited permission);
- whitelisting IP’s;
- whitelisting wallet addresses.
What is Binance
Binance is the world’s largest cryptocurrency exchange in terms of traded volume. It was founded in 2017 by Changpeng Zhao (a.k.a CZ), a developer who previously worked in creating high-frequency trading software. Binance was initially based in China but later moved its headquarter out of China as the government increased its restriction on cryptocurrencies, as now there is no fixed headquarters for Binance.
Since its launch Binance has been rapidly growing. It was able to be one of the top three exchanges in less than 150 days of its launch. This unprecedented growth is the result of multiple factors; some of them including a successful ICO, superior infrastructure that was able to handle high volumes, a huge offering of cryptocurrencies for clients, and the launch of BNB token. Due to these factors and more Binance was able to become the top cryptocurrency exchange based on traded volume and still holds that position.
Security and Insurance
Binance, being the biggest exchange pays special attention to its security and the safety of funds. It offers a number of security safeguards for the safety of its users’ funds. Some of these safeguards include 2FA login and fund transfer, wallet and device management, restricted sub-account creation and email/mobile notification to alert the user of any malicious practice.
In May 2019 Binance was a victim of a malicious attack where it lost $40 million worth of funds, however, due to its fund insurance it was able to navigate through the critical time with ease. This fund is called Secure Asset Fund for Users (SAFU) that Binance introduced in 2018. The SAFU function acts as insurance. The reserve SAFU pot is funded by taking 10% of all trading fees that Binance generates. As the transaction volume increases on Binance so will the value of the fund making the exchange safer as it grows.
Bottom Line Both FTX and Binance are highly ranked exchanges with top tier technology working round the clock to provide a safe and best user experience. They have a lot of similarities and at the same time, both are unique in their offerings as well. Both exchanges have a huge userbase and are continuously growing and evolving since their inception. Based on our four deciding criteria we see FTX as a better exchange. However, we believe that the decision to choose the best exchange is also dependent on what style of trading or investing you do, in case you like to trade low market cap coins or want to buy and hold coins and earn passive income then Binance is a better choice. If you are more of an active trader and would like to get exposure in not only crypto but also volatility and other stock assets then FTX is a better choice for you. Therefore, the final decision is always up to the user.
