Earlier this week Japanese cryptocurrency exchange Binance had suspended all trading and withdrawals as they underwent system upgrades designed to handle their significant user growth. Upon restored service at Friday 4 am GMT, Binance made a statement that they would be offering a 70% reduction in trading fees for all users until February 4th. This gesture indicates the high quality customer service Binance offers to their customers, which explains their recent rise to popularity.
Binance’s fee structure is relatively fair to users for the most part. Trading fees are normally 0.1% of the coin being purchased. When utilizing the Binance exchange token (BNB) to make trades, fees are reduced by 50% to 0.05%. During the period of reduced fees announced yesterday, trading fees will be fixed at 0.03% per transaction, or 0.015% with BNB.
Most of the complaints regarding the Binance fee system are related to withdrawal fees. While it is free to deposit coins in any supported wallet on Binance, withdrawing coins can cost users as much as $10-30 (the equivalent in the coin being withdrawn). The withdrawal fee varies by coin, but it is generally $5 or more. Some coins are free to withdraw, on the other hand, such as NEO. ERC20 tokens in particular have very high withdrawal fees, which have been met with customer complaints. Binance sometimes reduces the withdrawal fees associated with certain coins, as was the case with the newly listed NANO coin when withdrawal fees were reduced from 1 NANO (about $10) to 0.1 NANO.
An unfortunate consequence of Binance’s trading system is the fact that they do not allow trades of fractional amounts of coins. If a user purchases 1 coin, Binance deducts the 0.1% (or 0.05% with BNB) fee from that coin purchased. The user will be left with 0.99 units of his or her coin, which cannot be sold on Binance. The fractions of coins that are left in many users’ wallets are often referred to as ‘dust’.
While Binance’s trading system and fee structure are not perfect, they offer significant advantages over competitor exchanges and subsequently garner a large number of investors. Although Binance already has significant market share, its customer friendly fee reduction measures will help to retain users for longer and maybe even attract more new users. As traders enjoy the 70% fee reduction, Binance will continue to grow in traffic that can now be supported by their updated system infrastructure.
Images via: Twitter