Crypto derivatives trading is the newfound love of many crypto traders, and driving this trend in the market are the newly launched crypto derivatives exchange platforms.
In the last few years, many new crypto derivatives trading platforms have been launched, making it easier for traders to start crypto derivatives trading.
But as a trader, it is important to select the right crypto exchange to succeed in the market. With so many options available in the market, it sometimes becomes difficult to select the right platform.
This article will review two such platforms, Phemex and Binance, and check which one is better to trade derivatives.
Phemex vs. Binance: A Comprehensive Review
Phemex is a Singapore-based crypto-exchange platform that started its service in November 2019. The exchange is founded by 8 former Morgan Stanley executives and specializes in both spot and derivatives trading.
It claims to be the fastest crypto exchange globally, with a transaction processing capacity of 300,000 transactions per second and a latency speed of less than 1 millisecond.
Binance is the world’s leading crypto exchange platform by trading volume and has the widest range of crypto trading products in the derivatives segment. The exchange is known for its stable trading platform, deep liquidity, faster trade execution capability, and higher leverage.
Phemex vs. Binance: Product Offerings and Leverage
Phemex offers trading on only futures contracts, settled in both BTC and USD. It allows futures trading in the following trading pairs:
BTC/USD, ETH/UD, XRP/USD, LINK/USD, XTZ/USD, LTC/USD, UNI/USD, ALGO/USD, DOT/USD, ADA/USD, DOGE/USD, COMP/USD, BCH/USD, AAVE/USD, YFI/USD
It offers leverage of up to 100X on the BTC/USD pair and up to 20X on the remaining trading pairs.
Speaking about Binance, it offers the widest range of crypto derivatives products in the market. It includes:
- USDT-M Futures: These are USDT margined perpetual and quarterly futures contracts. The maximum leverage offered on such a contract is 125X.
- COIN-M Futures: These are perpetual contracts that derive their value from an underlying cryptocurrency. The contracts are margined and settled in Bitcoin and offer a maximum leverage of up to 125X.
- Binance Vanilla Options: These are European-style Option contracts that use USDT as trading and settlement currency. The leverage level depends on the strike price and time to expiry of the option contract.
- Binance Leveraged Tokens: The Binance leveraged tokens (BLVT)are tradable assets that allow you to take leveraged exposure to an underlying asset and be traded on the spot market. The leverage of such contracts ranges between 1.25X to 4X.
Winner: Binance offers a wide range of trading options in derivatives and higher leverage
Phemex vs. Binance Fees
Phemex has a flat-fee rate structure for its futures contract. It charges a taker fee of 0.075% and offers a maker rebate of 0.025%.
The withdrawal fee is 0.0005 BTC per request for Bitcoin withdrawal from wallets.
Binance has a flat-fee rate structure on all types of trades. It follows a tiered-fee structure based on the 30-day trading volume. It is divided into ten levels (VIP-O to VIP-9). For VIP 0, with a cumulative trading volume of less than 250BTC, the maker fee is 0.02%, and the taker fee is 0.04%. For VIP-9, having a cumulative trading volume of more than 750,000 BTC, the maker fee is nil, and the taker fee is 0.017%.
When paying through BNB tokens, Binance offers a discount of 10% on the trading fee.
Winner: Binance has a lower trading fee
Phemex vs. Binance: Account Opening Process
The account opening process on Phemex is quite simple and easy to accomplish. Since it is a non-KYC exchange, you need an email address and a strong password.
You need to confirm your email address’s validity to authenticate the Phemex trading account and start trading.
Binance is a non-KYC exchange and has a simple account opening process, which can be completed within minutes. To trade on the derivatives segment on Binance, you need to register on the Binance Futures platform separately.
You can register using your email-id and password. Post confirmation of your email id, you can start trading on the Binance Future platform.
Winner: Both the exchanges have a simple and easy account opening process
Phemex vs. Binance: Trading Platform
The quality and responsiveness of the trading platform are essential for trading in crypto derivatives products.
Phemex is popular for derivatives trading among professional traders and offers a host of features like advanced order types, advanced charting tools, order book, depth chart, recent trades, etc.
Apart from all these features, Phemex offers a speedy trading environment with the ability to process 300,000 TPS, order execution time of less than 1 millisecond, 30+ integrated liquidity providers, etc.
Binance is known for its stable trading volume and deep-liquidity. The trading platform contains all the basic and advanced functionalities for derivatives trading. Its trading platform can process over 1.4 million TPS and has a latency rate of fewer than 5 milliseconds.
Winner: Both exchanges have a best-in-class trading platform
Phemex vs. Binance: Security Measures
Phemex has a robust security architecture in place to offer a safe and secure trading environment. It includes:
- Uses a Hierarchical Deterministic Cold Wallet System for funds security
- Secures system infrastructure on Amazon Web Services Cloud
- Requires two-factor authentication for user login, withdrawal, password modification
- Trading engine security and disaster recovery system ensures 99.99% system availability
Binance has a strong multi-tiered security architecture for securing exchange infrastructure. It uses two-factor authentication, a combination of hot and cold wallets system, and an insurance fund (SAFU) to cover the losses from unexpected events like hacking or system failure.
Winner: Both platforms have a top-of-the-line security system in place
Phemex vs. Binance: Customer Support
Phemex has an exhaustive library of articles and FAQs listed on its website relating to trading platform usage and commonly encountered issues. Apart from this, there is a 24/7 live chat feature. Phemex also has active Telegram communities.
Binance has a virtual chatbot feature that helps you to solve the commonly faced issues on the platform. Apart from this, you can also raise a support ticket by filling the online form on the website with details of the issue.
Winner: With its live chat functionality, Phemex has the edge over Binance
Binance vs. Phemex: Which is Better?
Each platform has its own set of pros and cons. For instance, Binance is superior in product offering, leverage, trading platform, and ease of access. Similarly, Phemex scores ahead on lower fee structure, trading platform, security, and customer support.
If I segregate both the exchanges based on usability and utility, Binance Futures is suitable derivatives trading platform for professional traders and institutions. Whereas, Phemex is suitable for both beginners and professionals.
The decision to select an exchange platform should be based on your trading preferences, platform availability in your region, and ease of access.
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