In this article I’ll explore the differences between Binance vs FTX to find out what each offers and which you should be using. I’ll be assessing a number of factors such as markets, liquidity, security, fees.
Binance is regarded primarily as the number one spot exchange although they do have a large derivative markets as well. The platform is built and primarily focused around buying and selling cryptocurrencies to hold in the Binance wallets.
FTX is a derivatives exchange that has the majority of volume on their futures markets. The platform is “built for traders, by traders”. It was born out of Alameda Research, an organisation run by Sam Bankman-Fried, who were the biggest market makers and arbitrage traders in the world between 2018-2021.
Zero fees & taker vs maker explained
FTX currently offers zero fees for market makers. Let’s take a look at the difference between a market maker and a market taker before diving further into the fee structures.
This is an orderbook for Bitcoin on FTX. To purchase Bitcoin traders have the option to place a limit order into this book below the current price. This will go into the orderbook and wont execute until someone is willing to pay that price. Alternatively they can place a market order which will execute instantly at the lowest price someone is willing to sell for.
The prior is a market makers provide liquidity to the exchange, the later is a market taker removing liquidity to get orders executed in the fastest possible time.
Traders will often use both techniques depending on the urgency of order execution.
Fees differ between market makers and market takers.
Binance Market Maker 0.1%
Binance Market Taker 0.1%
FTX Market Maker 0%
FTX Market Taker 0.07%
Binance vs FTX Fees
Note that both exchanges have promotions which provide discounts for holders of their native tokens $BNB and $FTT respectively. There are also VIP levels which provide discounts and rebates for large trading volumes.
Usability and active trading in the UI
As you can see at first glance the user interfaces are quite similar. FTX has a few features that are quite useful for active traders such as the position calculator
As you can see at first glance the user interfaces are quite similar. FTX has a few features that are quite useful for active traders such as the position calculator.
Security considerations when holding funds on exchange
Binance has been the largest cryptocurrency exchange since 2017. Since then they will have had some of the most sophisticated hackers in the world target their funds. Their hot wallets contain tens of millions of dollars of crypto assets and their cold wallets contain billions.
There was one successful attack where $40m in funds was lost. The founder CZ covered these losses from his own funds and users weren’t affected. This should offer peace of mind to users of the platform. Centralised exchanges are always going to be targets and security breaches are going to happen sooner or later. Binance in my opinion handled this one exceptionally well and they are probably stronger because of it.
FTX being a new exchange has a perfect track record as far as I’m aware. They are very proactive in developing new things and my concern would be that there’s not as many security protocols in place. This is largely speculative opinion however and time will tell. How they would handle a security breach is yet to be seen.
I hold funds on both exchanges and trust them to be safe. If you have the option to move funds to a secure offline wallet then this is always a good idea in the long-term.
Conclusion Binance vs FTX | Which is the best crypto exchange?
I think there is no clear winner and it comes down to what you are trying to achieve.
If you just want to buy some Bitcoin and maybe some altcoins to HODL and earn interest on then Binance would be the best option.
If you are looking to trade in crypto markets or want to setup algo trading bots then FTX is the more well suited exchange.
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