How does exchanges work?

[kumala_abi]

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

listing coins fee depend on exchanges reputation.if they have huge daily volume trading and good security ofcours many projects and traders interested.moreover if they have feature community voting that used exchanges token.

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[alyssa85]

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

listing coins fee depend on exchanges reputation.if they have huge daily volume trading and good security ofcours many projects and traders interested.moreover if they have feature community voting that used exchanges token.

Don't forget that decentralised exchanges exist too - the so-called Dex's.

For example, Open Ledger:

https://dex.openledger.io/

You don't need to pay a fee to list on a dex. The real question for researchers is why users prefer the centralised exchanges instead of the dex's. Is it because the centralised exchanges advertise and the dex's don't?

[incomefromcoins]

mostly all exchangers earn profits through fees if we check Binance last few year profits the profit percentage is huge

[joshy23]

Exchange works when there's people who uses the platform,both traders and developers are bound to work together and exchange as the middle executer of any transactions that the two sides agree, exchange always got cut from transactions that's been created so the more the popular the exchange from the traders the more it will continuously gained profits.

[MakeMoneyBtc]

I don't think there is any member here that knows more about Binance than you could find yourself on the internet. You should start working harder and dig dipper into the history of this company and I'm sure at some point you will surely find its origin and their comments when the company was created. You could also try to contact a member of Binance team and ask them directly for some information regarding their history even though I doubt you'll get anything.

[waynechong1995]

Binance are centralised exchange, I believe their source code is not anywhere on the public repository, of course profits are from fees and coin listing but both are based on a strong cryptocurrency trading engine, you can catch a glimpse on how these engine works by checking out DEX

[crwth]

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.

The listing there, as I have heard, is around 50 BTC. That's freaking a lot. Knowing how to get in there is like volume heaven for altcoins especially the go-to for traders. A lot of them are actually going to be exposed to many traders looking for investments or something.

[mikelsmith2020]

I'm not sure about this but I think this list will answered how they earn through their exchange:

> Coin listing - If the project meet all the requirements required from their platform they will ask the project for a listing fee.
> Withdrawals/transactions - I think every coin listed their, if you withdraw it they will take some fees from it
> BNB coin - They have their own coin that supports their platform

So far here are what I've think on how the exchange earned from their own platform.

[GregH37]

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?

LOL, where you talked about them losing money got me laughing. These don't lose any money, they make a lot of money everyday, whether the trade you placed is a win or lose, they are making the money. These are platforms are for trading and they don't do it for free, you pay trade fees, and that's the money that goes to them.

Imagine how many traders are on Binance, and then check how much they charge as  trading fees and how many times people trade in their platform a day, then you will know these people are making millions of dollars everyday. So they are rich. As for how to start an exchange, not everyone can start up and run an exchange, if you don't have the money and the right connections, then you can't do it.

[rizkyhiw]

Perhaps the main problem for them (exchange) is the network where they are very careful every time hackers attack the system to take their money, hackers are the most worried and maybe the system they manage gets a big problem for everyone, the advantage is very much for get for Binance because Binance is a large exchange and accommodates many investors by obtaining fees from the registration of coins and the costs of any transaction, the way it works is just how to exchange other coins and can be used to trade or invest.

[jrrsparkles]

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 doesn't fix prices for the trading pairs,only the traders who want to buy and sell register their desired price so eeryone just follow it based on their required profits.Buildig such trading platform is not such a complex one but their security system is one thing need to be considered.If they are very weak then hackers will find a way easier and steal all the money from the exchanges.

[alyssa85]

Binance are centralised exchange, I believe their source code is not anywhere on the public repository, of course profits are from fees and coin listing but both are based on a strong cryptocurrency trading engine, you can catch a glimpse on how these engine works by checking out DEX

Binance is also subject to a lot of risk. They've got hacked again:

https://www.bloomberg.com/news/articles/2019-05-08/crypto-exchange-giant-binance-reports-a-hack-of-7-000-bitcoin

Binance, one of the world’s largest cryptocurrency exchanges, said hackers withdrew 7,000 Bitcoins worth about $40 million via a single transaction in a “large scale security breach,” the latest in a long line of thefts in the digital currency space.

The hackers used a “variety of techniques” including phishing and viruses to obtain a large amount of user data, Binance said in a post on its website. There may be additional accounts that have been affected but not yet identified, Binance said. The largest digital tokens including Bitcoin slid about 3 percent after the disclosure, then recovered most of the drop.

This is the biggest problem with centralised exchanges - they have a centralised source of vulnerability.

[Kelvinid]

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.

The listing there, as I have heard, is around 50 BTC. That's freaking a lot. Knowing how to get in there is like volume heaven for altcoins especially the go-to for traders. A lot of them are actually going to be exposed to many traders looking for investments or something.

This the reason why a lot of coins never have chances to be listed in Binance, fees are just crazy just to have a place in there.
This is how Binance plays and still to be considered one of the best exchanges in crypto because of its volume and we can find good coins inside.

[Harlot]

Theybare just the same to other traditional financial markets we already have like the stock amrket and the forex market. They are counted as only the brokers of the platform we are using and their jobs is to posts the buy and sell orders as well as match them for a fee. Even KYC is now a requirement for crypto exchange ever since the government has taken part with the industry. The only different thing I see is how cryptobexchanges put up their altcoins available as compared to stocks in the stock market. Compared to the stock market the ICO of an altcoin doesn't need to happen in that exchange as it can be made available in their platform even after the ICO has happened.

[cabalism13]

Three University students and doesn't know how exchange works? Silly. Even a kid can know it, let me ask you, where did you came from?

From the word itself. Exchange. Does it really bother you? That it has a different process? Oh yeah, online. It is a different way, yeah. Silly me.

Exchange doesn't work differently. It is still a matter of values that depends on the market. Thats all. Or you mean how the platforms works through blockchain? Or some other question. But if its the first one, don't be lazy fella.

[crwth]

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.

The listing there, as I have heard, is around 50 BTC. That's freaking a lot. Knowing how to get in there is like volume heaven for altcoins especially the go-to for traders. A lot of them are actually going to be exposed to many traders looking for investments or something.

This the reason why a lot of coins never have chances to be listed in Binance, fees are just crazy just to have a place in there.
This is how Binance plays and still to be considered one of the best exchanges in crypto because of its volume and we can find good coins inside.

I don't know whether or not some coins get free listing because of a great project but being in it would surely increase volumes. I don't think it's just that, having your coin there already says a lot, it could probably mean that you are serious with your coin or something. Not just a pump and dump coin.

[doomistake]

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?

You can google it actually, if I'm not wrong, because if you're going to ask for the details, then I guess it is too confidential for you to know. But creating a trading platform is a very expensive one, since you'll hire a team to make the exchange platform, who will make the maintenance, who will manage the funds, and so on. You can't make one on your own, because that would be too much for you too handle, especially if it is a big exchange platform.

And exchange platform doesn't care about the fluctuations of cryptocurrencies, either way, they are making money out of it.

[Kakmakr]

They work like any other "Money" exchange, where people buy/sell different currencies and they pay fees per transaction for the service that the exchange offer them. The general trading fee is 0.1% <Trading fees are determined based on trading volume over a 30-day period.>

They also charge a large fee for Alt coin developers to list their coins on their platform to be traded by registered members of that exchange. 

Some exchanges even charge fees to list ICOs that are verified by these exchanges on their platform to protect people with all the KYC/AML requirements that are needed to buy/sell tokens on these exchanges.   

[monalia]

Binance team started their career on the crypto platform as the ICO project two years before and now because of their hard work and increasing of the community pushing them forward to grow other than small exchanges.
When you want to be that much successful team you need to take care of the development of the site and product before the crowdfunding done due to current market condition.

[yusupjatigumilar]

Actually exchange works very simply, they only provide a place for traders to trade, they benefit from the market activities of traders such as selling, buying or withdrawing assets they have, just like the way foreign exchange or stock market works but in exchange of crypto currencies such as bianance of commodities traded are crypto currencies such as bitcoin and others.