How does exchanges work?

[MakeADollarAMillion]

Hi everyone,
We are three university students aiming to research about how exchanges such as Binance work. Since Binance has got a complex system, we were wondering if any of the members in this forum are informed about how did this project started, how does it work and based on the intense fluctuation of the cryptocurrency market how does Binance avoid losses and makes a profit?

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[mindrust]

What do you wonder exactly?

It is mostly about the money. Probably multiple tens of millions of dollars. Maybe even a lot more. To create a business as big as binance you need to have enormous amounts of FIAT before you start.
You need to have connections too. Mostly political but also need to know some decent coders&lawyers I imagine.
I remember kucoin and binance probably made their first appearances in the space about at the same time, though kucoin stayed much smaller and binance grew a lot bigger over the years.

Starting an exchange is more or less like starting a bank business. You need money and connections to make that money work...

, how does it work and based on the intense fluctuation of the cryptocurrency market how does Binance avoid losses and makes a profit?

Why would binance lose any money at all? All binance does to bring sellers and buyers together and make money (fees) from their trades.

[Ailmand]

how does it work and based on the intense fluctuation of the cryptocurrency market how does Binance avoid losses and makes a profit?

They make profit by coin listing and transaction fees. Since Binance has a high daily trading volume and trusted by most traders it takes almost thousands of dollars for them to get listed on their platform. Of course, as one of the leading platform they do have some criteria to make sure they are not supporting shit coins. With the massive daily trade, imagine how much fees they collect daily.

[Bitinity]

, how does it work and based on the intense fluctuation of the cryptocurrency market how does Binance avoid losses and makes a profit?

Why would binance lose any money at all? All binance does to bring sellers and buyers together and make money (fees) from their trades.

I believe there are some cases that makes an exchange lose some money such as getting hacked, or probably due to some unknown bugs on the sites that may makes users get money that they do not deserved.
Of course I believe that a big exchange like binance has their best team to make a system and security to avoid what I've mentioned above but the chance of an exchange to lose money does exist.

[Adriano2010]

There is a lot of programming behind of any exchange and this hel user to deposit, withdraw and exchange to credit deposit and also to get coins they withdraw, and also when people trade exchange get money from fees, and to build a high exchange a lot of money are needed and need to find a good team to build it.

[sunsilk]

You have these questions. First is this,

about how exchanges such as Binance work.

In what manner you would want to see on how Binance work?

about how did this project started

I've been looking for their thread around 2017 as their start but this is all that I've found.

Binance Exchange - Let us grow together. Please provide us your feedback.

how does Binance avoid losses and makes a profit?

Binance won't avoid lose, they don't trade but they gather fees from their traders.

[jak3]

as of most exchanges, the theory is the same, they live on the demand and supply which is created and manipulated in the market. so binance also works on the same points but whatever profit they make every year or month (after a specific time), they buy bnb coins from 10% - 20% of their profit and burn them. and because of this reason, the market faces less supply of the binance coins and so does the demand and price get increased. and that's why most people are in binance exchange.

[okala]

Binance as we all know was established in 2017 and since then binance have been growing with it centralized mode of exchange operations it have listed several coins on the platform and also have they own binance chain which services they binance coin. Binance go through lots of process before listen any coin to avoid bringing shit coin inboard, and since binance is a centralized exchange it deal on p2p market system where even if the market crash binance will not lose.

[posi]

Hi everyone,
We are three university students aiming to research about how exchanges such as Binance work. Since Binance has got a complex system, we were wondering if any of the members in this forum are informed about how did this project started, how does it work and based on the intense fluctuation of the cryptocurrency market how does Binance avoid losses and makes a profit?

Binance exchange started in 2017 and it just like other crypto exchange site which launched an ICO to attract fund to run their project but the reason why Binance gain the heart of many crypto  traders was because of it fast transaction processing with low trading fees.

[xvids]

Hi everyone,
We are three university students aiming to research about how exchanges such as Binance work. Since Binance has got a complex system, we were wondering if any of the members in this forum are informed about how did this project started, how does it work and based on the intense fluctuation of the cryptocurrency market how does Binance avoid losses and makes a profit?

How could they loss if they are just acting as an escrow.
Exchange platform are just acting as an escrow to those who wants to buy or sell their crypto.
They are making profit by the trading fee just imagine how much fee they are making from a single day.

[rijaljun]

I don't know exactly how they can operate in a crypto space which known has high fluctuation. There are to option to pay salary. They can pay their team with a fix amount of fiat money that is converted from trading fees, or they pay  in fixed amount of their native token (no matter how much their native token price).

Well, about how they started this. Binance has conducted a tokensale on June 2017 and raised about 15 Million USD. That's not a small fund anyway and since then they become the number one exchange in this crypto space, beated Bittrex.

[2double0]

They make money by listing new coins as they charge a handsome amount in BTC for the same, and in BNB (their own coin) through the way of transaction fees as well as the part they hold for development. Latest way for them to make money is by launching new projects there which we call IEO (Initial Exchange Offering).

[BossMacko]

Exchange doesnt lose profit. Users are paying percent of there listing of new coins, withdrawal, trades and all those percent are going to the exchange itself. They are just paying for tax, staff, website hosting and maintenance. Exchange that are well known are getting surely getting profits.

[Genemind]

Exchanges function in multiple ways which allow every individual to complete transactions like trading and investing. They offer different services where you will be able to gain a good profit through buying and selling coins. It's a demand and supply cycle that makes the process run continuously.

[traderethereum]

I am not sure we know how they can make a profit, and I don't think that Binance will tell us how they can do that thing because it's related to their company secret.
Maybe you can find by yourselves from reading all the information you got from the search engine.
Besides that, we don't know how long they build the system so it could give them a profit in for a long time.

[Kemarit]

Hi everyone,
We are three university students aiming to research about how exchanges such as Binance work. Since Binance has got a complex system, we were wondering if any of the members in this forum are informed about how did this project started, how does it work and based on the intense fluctuation of the cryptocurrency market how does Binance avoid losses and makes a profit?

Here is a good read from reddit: (https://www.reddit.com/r/Antshares/comments/6jny7g/all_about_wwwbinancecom_info_in_english_as/). I even saw CZ replying on that post.  . Anyways, just like any other business, I'm sure they have huge capital to begin with to hire the best programmers and then most probably CZ was always awake and on top of every release testing of his application. They charge a fee for every trading transactions you do so obviously they are making billions of profit as of 2019. (https://www.newsbtc.com/2018/11/10/how-has-binance-been-more-successful-than-coinbase-within-a-year/).

[shinratensei_]

Hi everyone,
We are three university students aiming to research about how exchanges such as Binance work. Since Binance has got a complex system, we were wondering if any of the members in this forum are informed about how did this project started, how does it work and based on the intense fluctuation of the cryptocurrency market how does Binance avoid losses and makes a profit?

Here is a good read from reddit: (https://www.reddit.com/r/Antshares/comments/6jny7g/all_about_wwwbinancecom_info_in_english_as/). I even saw CZ replying on that post.  . Anyways, just like any other business, I'm sure they have huge capital to begin with to hire the best programmers and then most probably CZ was always awake and on top of every release testing of his application. They charge a fee for every trading transactions you do so obviously they are making billions of profit as of 2019. (https://www.newsbtc.com/2018/11/10/how-has-binance-been-more-successful-than-coinbase-within-a-year/).

it looks like they were not having capital to do that when it was started and you can search the binance ico that has already ended at first july of 2017. Binance exchange site has used ico to get the funds and they had not used their own money. Binance started to hire more and more programmers after it was getting a big result in profit six months after ico.
https://www.ccn.com/binance-from-ico-to-the-worlds-largest-cryptocurrency-exchange-in-six-months

The revenue from the fees is nothing compared with revenue that comes from the listing a coin. I heard even an ico paid 5 millions dollar for listing on binance.

[Harith65]

there are two types of exchanges in the crypto currency world, those are centralized and decentralized. these tow platforms act different kind of behavior. in centralized there are centered authority which handling transaction. for an example we send our assets for them they sell it for someone with our price and buyer send money for them and they send money for us. that is centralized decentralized is no handlers and we can directly make a deal with buyers. these tow ways add some transaction fee. 

[Yakamoto]

Hi everyone,
We are three university students aiming to research about how exchanges such as Binance work. Since Binance has got a complex system, we were wondering if any of the members in this forum are informed about how did this project started, how does it work and based on the intense fluctuation of the cryptocurrency market how does Binance avoid losses and makes a profit?

Exchanges really aren't that hard to understand; their ability to make a profit lies entirely on their popularity and trust from the community, essentially.

The exchange exists as a middle man who collects deposits from users (depositing Bitcoin into the exchange) and allows for them to trade what essentially amounts to tokens on the exchange's respective crypto markets. Once users purchase and withdraw their crypto, the exchange sends some of the deposits they hold to the user's wallet.

To avoid losses, the exchange charges a transaction fee for every trade made on their platform, which pays for their various expenses like servers, internet, and the like. This is also how they make a profit, usually, along with whatever other revenues they generate from options being placed on their platform. They're not affected by the volatility of the market, and in fact benefit from it in most cases, because traders may be emotionally inclined to buy or sell their coins based on the market shifting. This results in an increase in the volume of transactions and, in turn, generates more $ for the exchange because of their transaction fees.

The most difficult portion of running an exchange is security. Everything else is just maintaining your infrastructure and minimizing downtime.

[nur rochid]

Hi everyone,
We are three university students aiming to research about how exchanges such as Binance work. Since Binance has got a complex system, we were wondering if any of the members in this forum are informed about how did this project started, how does it work and based on the intense fluctuation of the cryptocurrency market how does Binance avoid losses and makes a profit?

Here is a good read from reddit: (https://www.reddit.com/r/Antshares/comments/6jny7g/all_about_wwwbinancecom_info_in_english_as/). I even saw CZ replying on that post.  . Anyways, just like any other business, I'm sure they have huge capital to begin with to hire the best programmers and then most probably CZ was always awake and on top of every release testing of his application. They charge a fee for every trading transactions you do so obviously they are making billions of profit as of 2019. (https://www.newsbtc.com/2018/11/10/how-has-binance-been-more-successful-than-coinbase-within-a-year/).

it looks like they were not having capital to do that when it was started and you can search the binance ico that has already ended at first july of 2017. Binance exchange site has used ico to get the funds and they had not used their own money. Binance started to hire more and more programmers after it was getting a big result in profit six months after ico.
https://www.ccn.com/binance-from-ico-to-the-worlds-largest-cryptocurrency-exchange-in-six-months

The revenue from the fees is nothing compared with revenue that comes from the listing a coin. I heard even an ico paid 5 millions dollar for listing on binance.

with the increasing number of ico who register in the exchange, of course this will further increase the price of exchange coins themselves. so that more and more traders will stop and give life in the exchange