FTX vs Binance: Who Will Win the Heavyweight Battle of Crypto Exchanges in 2022?

FTX vs Binance:

In this article, we will analyze each exchange in further detail, but first we would like to outline our findings by comparing FTX and Binance.

Binance is by and large the largest cryptocurrency exchange in the world. They have millions of users worldwide and offer a great set of products suitable for almost any cryptocurrency investor. On the other hand, FTX, which is rapidly catching up, is the fastest growing exchange in the world. In less than a year, they never took a spot in the top five cryptocurrency exchanges, to quickly overtaking KuCoin and Kraken, and now occupying the third spot. Also, thanks to the FTX US platform, they quickly took market share away from Coinbase.

This is thanks in part to the large amount of venture capital backing FTX, which has allowed them to aggressively expand and market themselves while developing and launching new innovative products and increasing the platform’s visibility. FTX and Binance are also aggressively expanding their global presence, with both exchanges receiving regulatory approval to open offices in Dubai and Bahrain by 2022. This is an important step as the licenses granted by Dubai to these exchanges allow them to operate to global standards and to the satisfaction of major regulators such as the Financial Action Task Force.

Sam Bankman Fried, CEO of FTX, once said:

“This approval for FTX is a continuation of our mission to be at the forefront of licensing and regulation globally. We plan to continue to play a leadership role in countries that provide robust regulatory frameworks to advance the digital asset industry while running The highest standards of security, risk and investor protection.”

Both Binance and FTX are respected for doing the right thing, not just for themselves, but to advance the entire cryptocurrency industry. Binance has been very active in working with global regulators to help establish cryptocurrency regulatory frameworks and policies. Notably, Binance joined the blockchain lobbying group Blockchain Association, along with other major exchanges, to help the US meet crypto fair regulatory standards, and joined similar groups in the UK and Germany.

FTX vs Binance: Currencies and Products Offered

Looking at the types of products offered by Binance and FTX, we can say that in terms of overall products, there are quite a few similarities between the two. The main difference we see is that Binance is more focused on the spot market, where it offers a wider range of currencies, while FTX’s main focus is on the derivatives market.

Binance and FTX also have their own unique products, such as Binance has Binance Earn, crypto loans, P2P markets, etc., while FTX has volatility and prediction markets. FTX has also added FTX Stocks, which allow U.S. customers to trade stocks and ETFs. This makes it the first native cryptocurrency exchange to offer stocks within its platform.

Additionally, we see that both exchanges are entering the NFT marketplace and have just released their NFT marketplace. Binance was the first major exchange to launch an NFT marketplace, which immediately garnered popular interest and volume. NFTs on Binance are backed by the BSC or Ethereum network, while FTX’s NFT marketplace is backed by the Solana network.

Binance has a very popular crypto debit card, while FTX’s crypto card is only available to US residents through the FTX US platform. Binance also offers more services in its Earn section, supporting ways for users to earn passive income, while FTX is more focused on professional trading products.

FTX vs Binance: User friendliness

Both exchanges have a very clean and user-friendly web and app interface. Understanding the interface can be a bit difficult for newbies, but for traders with some experience, they will navigate the exchange easily. But here, we think Binance has the upper hand with its rich “Binance Academy” repository. Binance Academy not only helps users understand how the exchange works, but also helps users understand how the crypto market works and the latest trends in the market.

Both FTX and Binance have features suitable for the highest level of traders, neither exchange is completely “beginner friendly” nor do they intend to. Both platforms have trading areas suitable for advanced trading, and new users may feel overwhelmed at first. Both platforms offer a wealth of features, but new users can get lost in the browsing process, so it will take some getting used to.

Still, within a few hours, you should be able to use dropdown menus and navigation and be able to navigate like a pro. For users who are just looking for a really simple and safe place to buy cryptocurrencies without frequent transactions, I would recommend very simple, beginner friendly and easy to use platforms like OKcoin.

FTX vs Binance: Fees

Both exchanges charge very low fees on their spot trading markets, and they get lower as volumes increase. Here, however, FTX wins by charging 0.02% entry fee and 0.07% taker fee on Tier 1 accounts. This is significantly lower than Binance’s 0.1% entry and taker fee. In fact, even when paying transaction fees in the native currency BNB, users still pay a 0.075% fee, which is still higher than what FTX charges. So, in this category, FTX is the winner.

FTX vs Binance: Security

Security is one of the biggest factors in deciding which exchange to choose, and we can happily say that both exchanges do a good job in this regard. Both exchanges use 2FA and keep account funds and data safe. Both exchanges insure their funds by charging a fee as an insurance fund. However, we see that FTX also conducts third-party transaction audits through Chainalysis and has never been hacked like Binance, so we are slightly leaning towards FTX here.

FTX is one of the few exchanges that can boast that it has never been hacked. Both exchanges follow the highest industry security standards and most funds are held in cold storage. Both platforms employ 24-hour monitoring and analysis, and users’ funds are secured by reserves held by the two companies in their treasuries to prevent hacking.

Customers of both exchanges also have the option to enable a variety of additional security features such as whitelisted addresses and 2FA. We’ll cover the specific security features of each platform later in the article.

FTX overview

What is FTX cryptocurrency exchange

FTX is a centralized cryptocurrency derivatives exchange founded in May 2019 by Sam Bankman-Fried (current CEO) and Gary Wang (current CTO). The company was originally headquartered in Hong Kong but moved to the Bahamas in September 2021. In its more than two years of existence, the exchange has risen to the level of a top exchange with a strong user base and high daily trading volume. As of 2022, FTX has more than 1 million registered users and an average daily transaction volume of billions of dollars.

FTX vs Binance: Who Will Win the Heavyweight Battle of Crypto Exchanges in 2022?

Focusing primarily on derivatives and prediction markets, FTX offers a wide range of futures, options and volatility products. More than 290 listed crypto assets are traded on its platform every day. In 2020, the exchange gained a lot of attention for issuing “TRUMP-2020,” allowing traders to speculate on the outcome of the U.S. presidential election.

FTX is designed to meet the needs of retail and institutional traders, with a range of products and services for more professional traders. FTX also recently acquired Blockfolio, an app-based portfolio tracking service, for $150 million. The move is aimed at increasing the exchange’s global retail client base.

currency offered

While FTX is more focused on its derivatives market, its spot market offers more than 170 cryptocurrency pairs. These 170+ crypto assets are paired with 6 base currencies: BTC, USDT, BRZ, TRYB, USD and EUR. The exchange does cover most of the top crypto assets, but still lacks some large cryptocurrencies like Monero, Tezos, and Vechain in the spot market.

As far as fiat is concerned, FTX facilitates the deposit and withdrawal of many fiat currencies, which allows more users from different geographic locations to buy and sell cryptocurrencies on FTX. These fiat currencies include USD, EUR, GBP, AUD, HKD, SGD, ZAR, CAD, CHF and BRL, with TRY added soon.

The FTX token (aka FTT), the native utility token of the FTX exchange, is widely used in the FTX ecosystem. FTT is an Ethereum (ERC-20) based utility token that is listed on many cryptocurrency exchanges such as Binance, Huobi, Bitfinex, etc. This native token has multiple uses, including discounts on transaction fees. FTT can be used to create leveraged tokens and can also be staked to verify transactions. Other benefits include increased airdrop rewards, bonus votes, and IEO tickets.

product

FTX offers some unique products that can be traded in the crypto market, some of which are mentioned below.

FTX vs Binance: Who Will Win the Heavyweight Battle of Crypto Exchanges in 2022?

futures

FTX offers the largest number of crypto-asset products in this space compared to any other product segment on the exchange. The exchange has more than 80 cryptocurrencies in its futures section, which is quite a lot compared to other top exchanges. What makes FTX futures unique is that it offers many lesser-known currencies on the futures market. This gives traders more options to gain exposure to these low-cap coins. Another feature of this segment is that it offers clients very high leverage. These futures contracts fall into three categories: expiry, perpetual, and index.

stock

This is one of the most unique offerings FTX has to offer, as it allows traders and investors to gain exposure to some of the most popular stocks like Tesla, Apple, and Facebook without geographic restrictions. This product allows traders and investors to diversify their portfolios.

Leveraged tokens

Leveraged tokens are ERC-20 tokens that mimic the movement of the underlying token, but have a predefined leverage level. For example, if Bitcoin goes up 1% then BULL/USD 3x Long BTC Token will go up 3%, if Bitcoin goes down 1% then it will move 3% in the negative direction. There are 3 types of leveraged tokens: BULL, BEAR and HEDGE. These tokens automatically rebalance themselves, that is, the token reinvests profits and sells some positions in case of losses to reduce its leverage.

prediction market

This market operates like a betting market, where speculators bet on the possible outcomes of different global events. One example is the 2020 US presidential election, where one can place bets on Trump’s re-election.

BVOL

BVOL tokens are ERC-20 tokens that attempt to track implied volatility in the crypto market. BVOL token gains exposure to implied cryptocurrency volatility through the FTX MOVE contract and the BTC-PERP contract. There are two types of BVOL tokens: BVOL and iBVOL. BVOL tries to track the daily return of 1x the implied volatility of long BTC; iBVOL tries to track the daily return of 1x the implied volatility of short BTC.

Account Types and Fees

FTX has 3 levels of accounts, each with different features and limitations. These 3 levels are differentiated according to different KYC requirements. Unverified accounts can withdraw up to $9,000 per day, while Level 2 account holders can withdraw unlimited cryptocurrency funds, and Level 3 account holders can withdraw unlimited fiat currency through the OTC desk.

The exchange also charges different levels of transaction fees based on users’ 30-day trading volume, as shown in the image below:

FTX vs Binance: Who Will Win the Heavyweight Battle of Crypto Exchanges in 2022?

Safety and Insurance

Like other top exchanges, FTX takes its security protocols very seriously. It has put all the necessary protocols at every level to protect clients’ funds from hackers. Some of these agreements include:

FTX vs Binance: Who Will Win the Heavyweight Battle of Crypto Exchanges in 2022?

Given the leverage of the leveraged market is as high as 101 times, the exchange maintains an insurance fund to protect its customers should the automatic liquidation engine fail at any given point in time. Traders utilizing 50x to 100x leverage will pay slightly higher trading fees (these fees will be deposited directly into the insurance fund). FTX has set aside about 5% of FTT tokens not owned by FTX as emergency funds.

Building on this, FTX also uses a third-party blockchain forensics firm called Chainalysis to monitor suspicious cryptocurrency transaction alerts in the Chainalysis Know Your transaction (KYT) product, a real-time anti-money laundering product used to monitor cryptocurrency transactions (AML) compliance solutions.

Binance Review

What is Binance Exchange?

Binance is the largest cryptocurrency exchange in the world by trading volume. The company was founded in 2017 by Changpeng Zhao (aka CZ), who develops high-frequency trading software. Binance was originally headquartered in China, but as the government increased restrictions on cryptocurrencies, Binance’s headquarters also moved out of China, and now Binance has no fixed headquarters.

FTX vs Binance: Who Will Win the Heavyweight Battle of Crypto Exchanges in 2022?

Binance has grown rapidly since its inception. It was able to rank among the top three exchanges in less than 150 days of launch. This unprecedented growth is the result of a combination of factors, including a successful ICO, an excellent infrastructure capable of handling large volumes of transactions, a large number of cryptocurrencies available to customers, and the launch of the BNB token. Due to these factors, Binance was able to become the top cryptocurrency exchange based on trading volume and still maintain that position.

Until recently, Binance was a crypto-to-crypto exchange, which meant that traders could not deposit or withdraw any fiat currencies on the exchange. This has changed recently, and the exchange now also offers fiat as part of its currency offering.

currency offered

Binance has the largest number of cryptocurrencies available to customers of any exchange. It currently has over 350 cryptocurrencies in the spot market. This is an advantage Binance has over other exchanges as it offers customers a large selection of currencies. In addition, these currencies have more than 23 base currencies, providing traders and investors with a truly diverse market, providing traders with better arbitrage opportunities and diversification opportunities.

Currently, Binance supports around 60 fiat currencies via credit and debit card deposits or its P2P marketplace. This makes it easy for customers to enter the cryptocurrency market as people can choose their local currency to buy cryptocurrencies without having to worry about converting them to USD or any other international currency.

BNB, Binance’s native cryptocurrency, is a game-changer for the exchange. It was one of the first native exchange tokens to be launched and has had a pivotal impact on the operations of many exchanges. BNB was originally issued as an ERC-20 token, but was later transferred to the Binance Chain network. In the Binance ecosystem, the BNB token has many uses, including reducing transaction fees, staking, BNB vaults, and more.

product

Binance offers a plethora of products to its clients. Binance has been very active in providing users with different types of products to help them seize new market opportunities. Some of these products are mentioned below.

FTX vs Binance: Who Will Win the Heavyweight Battle of Crypto Exchanges in 2022?

futures market

Binance’s futures market can be roughly divided into USD stablecoin market and token market. The main difference between these markets is that the base currency of the former is various USD stablecoins such as USDT and BUSD, while the latter only has USD fiat as its base. These contracts can be further divided into perpetual contracts and quarterly contracts. Currently, Binance has more than 130 cryptocurrencies listed on its futures market.

vanilla options

Binance offers users “European-style” vanilla Bitcoin options contracts. Options are denominated and settled in USDT. It aims to provide users with more options, diversify their portfolios, and manage their market exposure. Users can either buy options for hedging and trading, or buy and sell options as an issuer.

Leveraged tokens

Similar to FTX, Binance also offers leveraged tokens that mimic its base token, but with predefined leverage levels. As mentioned on the Binance academy website, the design of these tokens is inspired by the FTX leveraged token, but Binance offers users up to 4x leveraged tokens.

Binance Earn

Binance has launched an innovative product called “Binance Earn” to users. This includes products that allow users to earn passive income by using assets they intend to hold for the long term. Binance Earn allows users to use products such as staking, opening savings accounts, liquidity mining, BNB vaults, and more. All of these methods also give users the option to invest in a fixed or flexible manner.

Account Types and Fees

Binance accounts are divided into 10 levels. Users can upgrade the VIP level in two ways, one is to achieve a set transaction volume through a margin account or a spot account, and the other is to buy and hold a certain amount of BNB tokens. Additionally, traders will receive an additional 25% discount on transaction fees if they use BNB as the base currency for their transactions. The table below shows how maker-taker fees change as the account level rises.

FTX vs Binance: Who Will Win the Heavyweight Battle of Crypto Exchanges in 2022?

Safety and Insurance

As the world’s largest exchange, Binance pays special attention to its security and security of funds. It provides a series of security measures for the safety of users’ funds. Some of these security measures include 2FA login and fund transfers, wallet and device management, restrictions on creating sub-accounts and email/mobile notifications alerting users to any malicious behavior.

In May 2019, Binance suffered a malicious attack that lost $40 million worth of funds, however, it was able to weather the critical period with ease thanks to its fund insurance. This fund is the Safe User Asset Fund (SAFU) launched by Binance in 2018. The function of SAFU plays the role of insurance. Reserve SAFU is funded by 10% of all transaction fees incurred by Binance. As Binance’s trading volume increases, so does the value of the fund, making the exchange safer as it grows.

Binance or FTX: Conclusion

Both FTX and Binance are top-ranked exchanges with best-in-class technology to provide a secure and optimal user experience 24/7. They have many similarities, and at the same time, their products are all unique.

Both exchanges have large user bases that have continued to grow and develop since their inception. Based on our four decision criteria, we believe FTX is a better exchange. But in our opinion, choosing Binance or FTX also depends on your trading or investment style, if you like to trade low market cap tokens, or wish to buy and hold tokens and earn passive income, then Binance is a better choice .

If you are a more active trader and want to invest not only in cryptocurrencies but also in volatility and other equity assets, then FTX is a better choice for you. So the final decision is always up to the user.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/ftx-vs-binance-who-will-win-the-heavyweight-battle-of-crypto-exchanges-in-2022/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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