The firm revealed that margin trading was on the way in late May, and said that the service would feature up to 20x leverage soon after.
In an announcement Thursday, Binance indicated that leverage (the amount that can be borrowed against a user’s crypto collateral) is just 3x, however.
“Your Margin Wallet balance determines the amount of funds you can borrow, following a fixed rate of 3:1 (3x). So if you have 1 BTC, you can borrow 2 more,” the firm said in a tutorial.
It also set out that to use the service, traders must have passed a know-your-customer ID check and must have two-factor authentication set up as an extra layer of security.
Margin trading is available in pairs including bitcoin (BTC), ethereum (ETH), XRP, Binance coin (BNB), Tron (TRX) and tether (USDT) initially, but can be funded with all supported coins on Binance. Fees are 0.02 percent on all except BNB, which invites 0.01 percent.
“Though the current cryptocurrency market and legacy platforms for margin trading poses greater risks and benefits at the same time, we are confident that its development coupled with more knowledge on proper risk management will help realize greater benefits in the long run,” said Binance co-founder Yi He.
As for the version 2.0 of its platform, the exchange said that, as well as a “newly optimized interface,” it also features an advanced trading engine aimed to improve order matching.
It further allows users to move funds from their margin wallet to their primary Binance wallet with no transaction fees.
Addressing the addition of margin trading, Binance CEO Changpeng “CZ” Zhao said:
“This is another step in providing an inclusive cryptocurrency trading platform catering to the needs of both advanced institutional traders and retail traders under the same roof. We are providing a new tool in the financial services and cryptocurrency markets to help amplify trading results of successful trades.”source link
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