Intro to Board Trading – Binance vs CROSS exchange
There are limits with trading in Japan when buying and selling crypto assets. This is because there are a limited amount of crypto assets allowed to be traded, which is a barrier to effective asset management. Therefore, overseas exchanges are naturally targeted by Japanese investors. However, there are very few sales office transactions that are commonly found in Japanese exchanges on overseas exchanges, and they become board transactions. If you can become familiar with these board transactions, you can make operation of crypto assets more effective.
Confirmation of the difference between sales office transactions and board transactions
Between sales office and board transactions, the degree of profit is different at first. Both have advantages and disadvantages, but for users with many small-lot transactions, board transactions often offer financial benefits.
First, it is necessary to consider the existence of trading partners as a major premise in trading. If you want to buy crypto assets, the deal cannot be concluded unless you have someone to sell to you. Of course, if you want to sell crypto assets, the deal will not be complete unless there is someone to buy from you. Sales office trading and board trading are different parties with which you trade with.
In sales office trading, the counterpart to which you trade is the exchange. Since the exchange is a for-profit company, the sales office aims to buy crypto assets cheaply and sell them high. This price difference will benefit the exchange and will be a substantial fee to the user. For example, this is an example of a bitFlyer sales office transaction. With 1 BTC, there is a difference of 59,902 Yen!
Next is board trading. With board trading, the person you trade with is someone on the other side of the screen. In most cases, the other party is an individual investor.
This is an example of the board transactions on bitFlyer. Because BTC is offered at 396,360 Yen, you can buy BTC at 396,360 Yen. In addition, since there is the hope for buying at 396,157 Yen, a user can sell BTC if I put out 396,157 yen.
The difference between the price of selling and buying from board trading is 203 Yen. The sales office price is 59,699 Yen higher than the previous sales office transaction!
If you only look at this, the sales office transaction can be regarded as paying through the nose. However, circumstances like this vary. For example, in the case of board trading, there are many cases where the quantity of BTC offered for sale is often small, and there may be cases where all the orders placed by you cannot be executed. For example, if you want to buy 1 BTC, but only 0.3 BTC is for sale, you can only buy 0.3 BTC.
On the other hand, in the case of sales office transactions, in order to complete trading of all quantities basically at the price displayed by the exchange, there are cases where the sales office type is better when trading in large quantities.
Let’s look at the advantages and disadvantages of a sales office and board trading in a table:
|Trade Exchange||・Easy to understand trading screen
・Large orders can be placed.
|・Fees (difference between selling price and buying price) are high|
|Board Trading||・Cheap Trade Fees||・It is difficult to understand the board trading screen (need to get used to it)
・It may not be established if we place a large order
In other words, sales office transactions are for large orders, and exchange transactions are for small orders. In the case of individuals, the amount of money is often not so large, so board trading is advantageous because it can be traded with a minimal fee.
How to look at the board
The board is expressed as ‘Order Book’ in English. The screen is an example of BTC’s USDT transactions on CROSS exchange (BTC / USDT). The largest number displayed in the middle is the latest transaction price.
Parts written in red letters in the upper half are for sale orders. The BTC price in USDT is shown on the left and the quantity for sale on the right. If you want to sell, you can sell by placing a sell order for the price and quantity you desire.
On the other hand, the part written in blue letters in the lower half is a buy order. The BTC price in USDT is shown on the left, and the quantity for buying on the right. If you want to buy, you can buy it by placing a buy order for the price and quantity you desire.
The basic view is this. Although there are differences in the display format for each exchange, the outline is similar.
Now that we have a basic understanding of how things should look, we will select an exchange. We will compare and introduce Binance, which is said to be the world’s best exchange, and CROSS exchange.
The difference between Binance and CROSS exchange
Both Binance and CROSS exchange are foreign exchanges. Both exchanges adopt a form of board transactions that can reduce fees to less than sales offices in Japan, and both provide no sales offices. I made a table of the differences between Binance and CROSS exchange:
|Country of Exchange License||Malta||Azerbaijan|
|Date Established||July 2017||November 2018|
|Japanese Language Support||No||Yes|
|1 Day Trade Volume in Japanese Yen
(As of March 4, 2019)
|71.65 billion Yen||15.95 billion Yen|
|Types of Tradable Crypto Assets
(As of March 4, 2019)
|173 Types||20 Types|
|Settlement Currency||9 Types
BTC, ETH, XRP, USDT, TUSD, PAX, USDC, USDS, BNB
※Substantial full return from trade mining
|Original Token||BNB||XCR, XEX|
|Method of Acquiring Original Token||Buy||Buy,Trade Mine|
|Returning Profits to Original Token Investors||Yes||Yes|
|Profit Return Method||Price Increase Due to BNB Repurchases||Distribute revenue directly|
Compared to CROSS exchange, Binance has an overwhelming history of trade volume due to its long history and many users. Due to the large volume of trading, the total amount of orders per price ranging on the board can be large, and large trading orders can be closed at an advantageous price. You can also buy and sell many types of crypto assets on Binance. There are many types of settlement currencies and there are many trading pairs.
In terms of making large orders in a flexible manner, CROSS exchange is not even close to Binance. Conversely, CROSS exchange places more emphasis on return to investors compared with Binance. On CROSS exchange, based on the idea that the person who contributes to secure the liquidity of the exchange by trading on the platform, a fee is returned to the investor who makes trades with XEX tokens. This is called trade mining.
In particular, the exchange’s revenue is distributed daily to investors holding XEX tokens obtained through trade mining. Whereas Binance makes BNB’s repurchase price rise a substantial return to investors, CROSS exchange provides a direct return to XEX holders. It is said that CROSS exchange is suitable for individuals with many small-lot transactions because it has less volume than Binance and it is difficult to make large-scale transactions. In addition, the fact that it is geared towards Japanese investors is an element that cannot be ignored.
As we have seen so far, simply stating one exchange is better than the other is not possible.