One of the main appeals of using cryptocurrencies as a peer-to-peer form of money is its speed and low fees. However, when third parties like exchanges get involved in transactions, users often become frustrated giving up a piece of their holdings to fees. Binance, the cryptocurrency industry’s biggest exchange by volume has established itself as a leader through a complex but low fee structure. In this guide, we will breakdown Binance’s Fee schedule and compare it to that of comparable exchanges.

First, let’s discuss a bit about the history of Binance.

Binance’s History

Before Binance, CZ had spent the previous years working as a financial software developer designing paramount projects for the likes of Bloomberg and the Tokyo Stock Exchange. After spending his early career upstarting a company called Fusion Systems in 2005, known to be one of the fastest, high-frequency trading systems for brokers, CZ eventually found himself working in the blockchain industry.

In 2017, he launched the company following a $15-milion dollar initial coin offering. Within eight months, Binance became the world’s largest crypto exchange by trading volume with a current daily volume of over $180 million. 

Despite growing into such a large organization so quickly, Binance has done managed to keep industry-low fees. For the record, the exchange became so successful and flushed with cash because of the ridiculously fast user growth, the exchange was able to capture 6 million users in 6 months.

Binance Fees Schedule

There are three main categories of Binance Fees: trading, deposit, and withdrawal. Furthermore, how much you pay within these categories is determined by the amount you trade, which Binance calls your VIP level.

Trading Fees

There are 10 different trading fee levels ranking from VIP 0 which has the highest fees, to VIP 9 which has the lowest fees. The different levels are designated based on a 30-day trade volume of your personal account as well as your BNB coin balance (Binance’s native token). 

Binance Fee Breakdown
Binance’s Fee Breakdown by VIP Level

Binance account holders that trade less than 50 BTC during the previous 30 days will pay maker/taker fees of 0.1%, Binance’s highest fee rate (more about what a maker/taker fee is). As transaction volume increases, so do fees. Binance’s lowest fee rate is 0.02% maker / 0.04% taker. This rate applies to VIP 9 level accounts which require a 30-day trading volume of 15000 BTC or more.

Deposit & Withdrawal Fees

Binance’s fees for deposits and withdrawals different from that of trading. To get funds into or out of the Binance exchange you will be subject to fees.

Fortunately, Binance charges nothing to deposit funds into their platform.

To withdraw from Binance you will pay a fee that depends on the asset being withdrawn. Each coin has a different withdrawal fee and minimum withdrawal amount.

Binance Withdrawal and Deposit feed schedule
The list of assets listed on Binance is very long but here is a shortlist of some of Binance’s withdrawal fees by coin.

How to Reduce Fees

Despite having industry-low fees, there are a few ways you can decrease your fee payments even further on Binance.

The simplest way to decrease your trading fees is to increase your trading volume. As previously discussed, higher trading volumes will qualify you for higher VIP levels which come with lower maker/taker fees.

Another way to reduce your trading fees is to hold Binance’s token, BNB.

Holding BNB allows users to receive a 25% discount on trading fees.

It is also worth noting that Binance has a strong referral program that allows you to earn up to 40% of commissions paid by those you refer.

Compared to Other Exchanges 

How does Binance’s fee schedule stack up against fees from other exchanges?

Compared to Coinbase, Binance fees are lower. Coinbase uses a conversion system and charges a percentage based on the sale. Despite Coinbase’s strong UI/UX, users often complain about the high conversion fees, which range from 1.49% to 3.99%.

Trades on Bittrex are charged a flat rate of 0.25% regardless of the asset or trading pair, thus making Bittrex more expensive than Binance. While Bittrex also does not charge any fees for depositing, there are certain digital assets that are charged a fee when being transferred to another address before being credited to a user’s exchange account. Furthermore, all USD deposits and withdrawals are free on Bittrex.

The only exchange/service that really competes with Binance on fees is ShapeShift who recently announced commission-free trading for users that hold the FOX token.

Wrapping It Up

Cryptocurrencies offer users an incredible way to transact peer to peer with high speeds and low costs but third parties can make the process more expensive. Despite this, Binance offers an extremely reasonable fee structure that can be further reduced through increasing trade volume or holding BNB.

The post Binance Fee Guide (for 2020) appeared first on CoinStats Blog.

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