The past few weeks have been filled with uncertainties in the crypto market because of the liquidation of FTX and its effect on other projects. Users, having seen the weaknesses of several exchanges and projects, are worried about trust and confidence.
While it seems as though the industry has lost that trust and confidence, several platforms remain formidable and can be trusted. Binance is one, and here’s why.
To use the Binance App effectively, KYC is a must. It protects users from malicious individuals who can be tracked at any time. This provides a confidence boost for any user at any time because they know they are dealing with real users that can be identified, especially for P2P activities.
There are very few exchanges that can stand the number of licenses Binance has acquired around the world. From France, Spain, and Dubai to Ahu Dhabi, Kazakhstan, and Bahrain, Binance has received positive acceptance by the government.
Being regulated means that the exchange is working with the laws of the nations where it is situated to serve the people transparently. Thus, users are assured of the backing of their government as well as the support of Binance if anything goes wrong.
Apart from the regulations, Binance also supports its users with good and simple educational materials to make it easier to onboard users.
Strong native token
In the last one year, BNB has been amongst the top ten cryptocurrencies according to marketcap. BNB can be traded on more than 34 exchanges today while hundreds of projects are running on its technology, Binance Smart Chain. The presence of these projects on the BNB Chain shows to an extent, the level of confidence the teams behind the projects have in BNB.
BNB is the native token of Binance, which was created in June 2017 from an ICO done before the launch of the Binance exchange. After two years, BNB, which was initially on Ethereum was migrated to the Binance Chain. The Binance team initiated a burning mechanism to drive the total supply of BNB while hopefully seeing the price go up using the laws of supply and demand.
During an interview with CZ, he mentioned that most of his crypto assets are in BNB. This shows that the co-founder believes in BNB.
Debt seems to be a regular part of today’s global business. Currencies are also said to be built on debt. However, it’s hard to believe that Binance, which aided about $7.7 trillion crypto exchange volume in 2021, neither has debt nor money from investors.
CZ, the CEO of the company, made this known during an AMA Session on Twitter , where he addressed a lot of issues related to Binance, FTX, and the crypto industry. “We don’t have debts. We don’t owe anyone. We don’t have loans,” CZ said during the live session.
This means that the likelihood of having an organization or individual come up to claim ownership of Binance based on debts and loans is close to zero. Thus, the funds of users are safer than on platforms where there are debts.
Insurance fund of $1 billion
Binance is one of the few exchanges openly declaring it has an emergency fund (SAFU) that can salvage the platform if there is any collapse. In the wake of the recent volatility in the market affecting BNB and bitcoin, the exchange added over $700 million to make it worth $1 billion.
Secure Asset Fund for Users (SAFU) is an emergency insurance fund created by Binance in July 2018 to protect its users. According to Binance, it started by committing “a percentage of trading fees in order to grow it to a sizable level to safeguard users.”
The fund comprises BNB, BUSD, and BTC and can be accessed here. Regarding the funds’ update, CZ explained that it’s the responsibility of Binance to protect it by creating the best products and a backup plan “from any unforeseen issues. By providing the SAFU fund, we can give users some peace of mind.”
Nothing proves this more than the gesture by the exchange to be the first CEX to make its proof of reserve public. There are no records of any other CEX that has taken such a step to show how transparent they are, and there are no records that Binance was not coaxed to do so by government bodies.
Crypto appears complex to the new user but making known your balance and reserve means a lot to any potential user. Apart from instigating the proof of reserve for Binance, the team also inspired other crypto platforms to do the same. Now, Vitalik of Ethereum has shown interest in creating a protocol to manage proof of reserve for the crypto industry.
Other proof that Binance is truly safe is that they don’t use users’ funds for trading or investing, they are concerned about the entire crypto industry, they share and communicate with the crypto more than any other platform with online and offline events, and the top team members are not hidden, especially CZ.