Binance boss Changpeng ‘CZ’ Zhao has sent a ‘personal’ email to a number of retail investors using his centralized exchange saying all is well on the world’s largest crypto platform guaranteed.
The email was addressed to the community of “Binancians” in an exercise in increasing customer confidence in how funds and wallets are managed on Binance.
Binance bosses said they are making “daily reconciliations of all crypto assets held by Binance on behalf of customers.”
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Mr Zhao added:
Zhao said, “Binance holds all of its clients’ crypto assets in segregated accounts that are identified separately from the accounts used to hold crypto assets belonging to Binance, and that user assets and Binance itself emphasized that it also uses Binance’s own wallet infrastructure to protect its assets.”
Following the implosion of crypto exchange FTX, rival centralized crypto exchanges such as Binance and Coinbase (COIN) are lobbiing their customer communities and media to make a similar fiasco. We are working diligently to allay those concerns. Occurs on the platform.
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The adage “it’s not your key, it’s not your coin” sounds more true than ever.
Both individual and institutional investors have felt firsthand the pain of allowing opaque, offshore, centralized crypto platforms such as FTX to control their funds.
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deposit wallet on binance
According to Binance, the centralized exchange will have deposit wallets with one or more addresses per user per blockchain. Users deposit cryptocurrencies and stablecoins to their deposit addresses.
The Binance system monitors the blockchain and adds its balances to user accounts stored on Binance.com.
Once Binance confirms that these coins are on-chain, they can be traded and spent on the Binance exchange.
Binance exchange allows users to trade high-quality digital assets such as Bitcoin (BTC-USD) and Ethereum (ETH-USD), as well as a lesser dubious salad of altcoins with and without use cases. increase.
read more: Crypto tank after FTX implosion
Blockchain analysts can scan publicly distributed ledgers (DLTs) and monitor the movement of massive amounts of tokens.
An email from a Binance boss explains why users’ coins are “flowed” to different wallets.
He said the platform “regularly ‘sweeps’ those coins into hot or cold wallets. The logic behind why exchanges are purging tokens is to minimize the number of transactions and minimize gas fees, thereby dramatically reducing overall user fees.” .
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He added: “Generally speaking, large deposits are wiped out more quickly, waiting for a few deposits to wipe out a small amount, or waiting for the network’s gas bills to be wiped out. The main reason we remain so competitive is that this method keeps the cost of gas low, which we pass on to our users with the lowest transaction fees in the industry.
“When a user wants to withdraw, our system will transfer funds from the hot wallet and deduct the amount from the account balance. If the hot wallet falls below a certain amount, we will top up from the cold wallet.
“If the sweep causes the hot wallet to become too large, we will move some funds to the cold wallet and process future sweeps directly into the cold wallet, reducing the number of transactions and gas costs.”
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Zhao added that there are certain exceptions when large deposits come in, and the platform may move them directly to cold wallets.
He also said that if a large withdrawal is requested, it may be processed directly from the cold wallet.
A cold wallet stores your digital assets offline and out of reach of computer hackers.
How Binance Profits from User Activity
Zhao explained that commissions are deducted from each trade on the centralized platform and transferred to the Binance.com account owned by the Binance platform.
This is Binance’s revenue, which the company says has been in the black for four months since its founding in 2017.
In connection with the collapse of the FTX exchange, he said its “self-sufficient ecosystem” protected Binance’s customers from being exposed to the type of contagion risk seen with implosion of other industry players. rice field.
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