The leading decentralized exchange from the crypto space Binance has recently announced the launch of a crypto Margin Trading platform in its blog. The exchange is on the path to become the largest exchange of the crypto space as it has been introducing multiple opportunities for institutional and retail investors to enter into the crypto space by easing down the investment options for them, with Margin Trading being the latest one. The announcement was enough to garner the attention of a large number of investors who opened accounts for the Margin Trading on the same day the announcement was made. The detailed statistics were stated in a tweet by the CEO of the exchange, CZ, which is as follows:
Margin Trading is a pretty common concept of financial markets where an individual is given the opportunity to purchase assets more than they can afford. This way, higher returns can be guaranteed as the initial amount is somewhat elevated. The extra amount is borrowed from the broker which in this case is the one and only Binance. Nevertheless, the principle is that a basic amount is to be deposited on which the broker lends the trader a multiple of the basic amount which is decided according to the regulations. In simple terms, this is a loan from the broker which is to be paid back with interest depending on the returns one has received. Binance is calling this platform as Binance 2.0 which is most probably an upgraded version of the said. It also permits the transfer of funds from its Margin Trading wallet to exchange’s wallet, without any transaction fee. By enhancing gains through a borrowing process, Binance is now opening crypto to more retail and institutional investors by attacking their interests of extra gains. The CEO of Binance, CZ (Changpeng Zhao), stated as below:
The only downside to this kind of trading is that it is subjected to high-level market risks where even if an individual loses money, they are supposed to return the specified borrowed amount to the broker. Yi He, the co-founder of Binance, addressed the problem of high-level risk in the blog, stating:
The exchange has also announced that these open doors for many more tokens to come which would be pegged to the biggest and most prominent Cryptocurrencies. The platform ensured that its tokens will always maintain 1:1 peg with the currencies and would enhance features using the native blockchain of Binance platform. With all these advancements, it can be safely said that Binance would very soon reach the top because of its contribution towards the latest crypto adoption.
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