Changpeng Zhao, better known as “CZ”, is a visionary, who founded binance with a dream of a decentralized exchange that will facilitate the utopian dream of a financial system in which all people have an opportunity of prosperity and equality of opportunity that Satoshi Nakamoto (The alias of Bitcoin’s creator) had dreamt of one day attaining. Their efforts to help fill the gap of the wealth disparity and increasingly growing economic inequality that we are only now seeing unfold, is quite remarkable and ahead of its time. Despite what you personally think of CZ, and regardless of his unfortunate legal battles in previous years, which forced him to step down as CEO, the mission these visionaries and other brave and brilliant minds started remains noble and intact, and it’s motives have not been compromised, in my own opinion.
Going back to the choice of title for this article, “Using Binance just as an exchange is like owning a Bugatti but only using it to go buy groceries.”, allow me to elaborate. The Binance team’s good and hardworking members have put their heart and souls into creating an all inclusive platform with a vibrant community, and have also provided you with all the tools and resources needed to maximize your chances of success. Let’s dive into some of the many features and tools of Binance, which will cement to any skeptics why they are the industry leader and gold standard in this new digital age of finance.
-Binance Academy:
Before I dive into any technical tools and instruments that can help you, let me start by emphasizing the importance of knowledge. Knowledge is power, and Binance once again delivers and proves why it is the world’s #1 exchange with unparalleled customer loyalty and market share, this resource alone provides enough value added to binance users for them to pledge allegiance to this platform and retain their trust and loyalty in it’s managerial leadership. Every single topic you could ever want to learn about in the fields of cryptocurrencies, finance, FinTech (Financial Technology) , DAOs (Decentralized Autonomous Organizations), DEXs (Decentralized Exchanges), DeFi (Decentralized Finance), AI (Artificial Intelligence), and Web3, among plenty others are all offered for free and broken down clearly and proficiently by experts for your own development. I repeat, knowledge is power, get on Binance Academy now and start consuming all the informative content and take advantage of this free service to keep learning and evolving yourselves.
-AI powered trading bots, you can trade like a pro without extensive knowledge in all the technical aspects. I would not recommend this tool if you have absolutely no clue about any basic financial fundamentals, instead I would recommend Binance Academy as just one of many learning resources available to you for free to first learn the basics. There are many types of bots available on Binance alone, let alone other providers. Binance offers arbitrage bots, grid trading bots (spot and futures), rebalancing bots, and DCA bots just to name a few, a plethora of other options are at your disposal.
-Decentralized crypto loans without any credit score requirements or proof of job security, using nothing but you’re already owned cryptocurrencies as collateral.
-Leveraged trading (futures), if we added leverage through trading long on futures the exchange would effectively allow you to make much bigger trade than what you currently own at the ratio you choose. Please be advised, this type of trading is higher risk due to the chance of being liquidated if the variance between your position’s entry price and market price grows too large, but this risk can be mitigated by sticking to a lower and somewhat more reasonable leverage range of 2x-5x, so many amateur traders lose money due to being over leveraged at crazy multiples like 20x, 50x, 75x, and even 100x and above which I’ve seen too many rookies opting for in hopes of astronomical returns on very tiny investments. That my friends is called GAMBLING and not investing or even trading, learn to recognize the difference between the two. Its much better to make small and consistent returns which over the years compound and grow your capital rather than to try and acquire life changing and unrealistic gains through chasing once in a lifetime trades that almost always end up in bankruptcy or even worse, debt.
-Copy trading, if you are a beginner and find a fellow binance trader who has a good track record and you trust their trading method and strategy, you can opt for copy trading. In this case you will invest a sum into this user’s copy trading profile which will then be deployed at the trader’s discretion. This can be useful for less knowledgeable traders as this way they are leveraging the knowledge of more experienced advanced traders. Nevertheless, do your own research and proceed with extreme caution as nobody knows the future and you are at the mercy of the trader’s decision making. I personally do not ever copy trade nor do I advise advanced traders to do so, you are better off investing your time and money in your own knowledge and skills and developing your trading rules/method and fine tuning your strategical countermeasures and contingencies for various future scenarios.
-Web3 airdops, think of it like seed funding in traditional institutional finance but with a twist. In traditional seed funding, the aim of the startup would be just to acquire funding mainly, and maybe get some structural/financial guidance from experienced investors. However, in a crypto airdrop, the equity being distributed might not only be in efforts of acquiring startup capital but also cryptocurrency projects often use airdrops as part of their token launch strategy in an effort to raise awareness within the crypto community and encourage recipients to use their tokens. Airdrops can also be used to distribute tokens to potential users or investors fairly by ensuring that the initial supply is spread across a large number of people, rather than concentrated in the hands of a few early investors. This distribution model can contribute to a more balanced and decentralized ecosystem.
-Launchpool, involves basically committing your owned crypto towards staking into a liquidity pool that allows for new tokens to be generated, and as a reward for your contribution you receive tokens free of charge as a reward for providing liquidity to the liquidity pool. This can be so rewarding as you will be given newly listed tokens into your wallet (for free) before they are even listed publicly. This process is called “DeFi Yield Farming”. When the IPO/ICO/IEO (initial public/coin/exchange offering) takes place, that will then determine what your free rewards will be worth based on the trading price of the token. This is a cost free method to make a profit, as you did not pay or use any of your staked crypto, you just helped fund the liquidity pool that enabled the token to be generated.
-Launchpad: Binance launchpad is the exchange’s internal platform for IEO’s (Initial Exchange Offering). Similar to an IPO, launchpad helps crypto startups find early buyers for their cryptocurrencies. Before trading on the exchange begins, the startup launches on the launchpad and sets a low starting price for the token.
IMPORTANT NOTICE
For airdrops, launchpool, and launchpad, there is a common success variable which is that you learn how to identify quality projects who have genuine potential for success and acquiring market share in the field they are entering, or in even trickier to gauge cases projects with potential that aim to create a market for an unprecedented product or service. The concept and technology is of course massively important. However, I find that the most vital criteria is the credentials of the team running it, I prefer to invest in a strong team with a good track record of success, proven problem solving skills, and most notably resilient and determined characters, not just a nice idea or new flashy tech. An idea is only just an idea without execution, the team leading the idea is who will or will not be able to execute accordingly.
IMPORTANT NOTICE
Please do your own research always, and don’t take any single individual’s advice as scripture, not even mine. Anyone who does encourage you to listen to them and no one else is either a fraud or a snake oil salesman that is after your hard earned money. Stay tuned for my next article on trading psychology and strategy, for an in depth guide on navigating the financial world as an independent investor.