Binance DEX: How the Bitcoin exchange secures customer data for itself


The Bitcoin exchange Binance now operates a decentralized trading center for cryptocurrencies. Above all, the Binance DEX (Decentralized EXchange) promises more security for users. The lack of a central point of attack (single point of failure) is intended to protect client funds. But how decentralized is the Binance DEX?


Ever since the last attack on the Bitcoin exchange Binance, the crypto community has once again become aware of the big problem in trading cryptocurrencies. Although cryptocurrencies based on blockchain technology may be safe in theory, an attack is difficult to achieve, especially for large crypto networks. However, the security of the trading venues themselves often leaves much to be desired. In the past, attackers have repeatedly managed to tap customer funds. The solution, according to the usual argumentation: decentralized trading centers, short: DEX. Now that just one of the largest crypto exchanges in the world operates such a decentralized trading platform, raises some questions.

Are there fees on the Binance DEX?

To make it short: yes. Accordingly, users of the Binance DEX are required to pay fees in the following cases, among others:

  • To cancel an order: Equivalent to 0.0005 BNB or 0.0001 BNB
  • Expiration of an Order: Equivalent to 0.0005 BNB or 0.0001 BNB
  • Cancellation of an IOC Order: equivalent of 0.00025 BNB or 0.00005 BNB
  • Listing fees: 2,000 BNB
  • Deposit cryptocurrencies: 0.00125 BNB

The exact amount of fees, however, could vary. This is what the Bitcoin Exchange states:

The fee for trades currently lies between 0.1 percent and 0.04 percent of the respective amount.

In short, the Binance DEX automatically handles collection of fees, but Binance itself does not seem to be involved in the process itself. In addition, the Bitcoin exchange seems to try with their fees to promote the use of the platform’s own token BNB. For example, the fees for using the Binance Coin are up to 5 times cheaper than paying its fees in Bitcoin or other cryptocurrencies.

How to use the decentralized Bitcoin exchange?

The registration for the remote exchange of Binance takes place without registration. So you have to create a decentralized wallet first . Accordingly, as Binance points out in the tutorial , it is also responsible for the whereabouts and safekeeping of its cryptocurrencies. If you have created your wallets, you get them in three different formats delivered to use them to taste. The Wallet comes crypto-standard with a 24-word passphrase to protect your own deposits from theft. Optionally, there is a private key, with which one also gets access to his ID. However, you will not receive your credentials until you have acknowledged the limitations that a DEX entails:


The guidelines of the Binance DEX: What happens to the user data?

In the guidelines , however, the Bitcoin Exchange reserves the right to save certain data. Accordingly, the guidelines on money laundering and anti-terrorism financing state:

In addition, Binance reserves the right to cancel any terms and conditions with customers at any time, "for any reason. even without justification] "to end. Furthermore, the Bitcoin exchange offers no guarantees. The users are thus in case of a loss on their own. Finally, by agreeing to these policies and creating a wallet, Binance will be released from all liability. As soon as you also submit data via the Binance DEX API, the Bitcoin Exchange obtains the rights to use them:

Conclusion: decentralization looks different

Ultimately, Binance manages with its DEX to establish a centralized system under the guise of decentralization. On the one hand, while users are solely responsible for the security of their wallets, on the other hand they have to pay fees with the BNB token. They also leave the rights of use of Binance to their data, which - it is speculated here - stored on central servers.

source translated by @tolgn1907