30.11.2021

Binance Liquid Swap review, what it is and how to use the service

Decentralized token exchange protocols such as Uniswap are very popular with cryptocurrency traders. One of the main reasons is usability. Just select a token, enter the amount, and you’re done.

Following Uniswap, other automated market maker (AMM) protocols were launched, such as SushiSwap on Ethereum, or PancakeSwap on Binance Smart Chain.

Traders looking to work with decentralized AMM have a variety of options. However, not all crypto investors are comfortable with actively using blockchains, managing various wallets is a tedious process, and Ethereum transaction fees are currently quite high.

For those interested in AMM trading but want as much convenience as possible, Binance cryptocurrency exchange has launched Binance Liquid Swap.

What is Binance Liquid Swap?

Binance Liquid Swap is an Automatic Market Maker (AMM). With the help of this service, clients of the exchange can place free capitals in the general pool of liquidity to receive rent from their invested funds. An additional source of income is commissions from trades made on Binance Liquid Swap.

Registration and balance replenishment

To use this service, you need to create an account on the Binance trading platform. This is not difficult to do. Go to https://binance.com/ and right on the main page, enter your phone number or email address in the appropriate field, and then click ” Register “.

The system will automatically redirect you to your personal account, where you will have to specify a password to enter and click the ” Create an account ” button .

To confirm registration, enter the code from SMS if you use a mobile number, or an email from the exchange to your mailbox, if you register by email, and you can enter your personal account with your username and password. All that remains is to connect two-factor authentication and fund your account.

All sections are transferred through a spot wallet.

There are hundreds of different digital coins traded on the exchange, but Binance Liquid Swap only supports:

  • Bitcoin;
  • Ethereum;
  • LINK;
  • BETH $
  • Binance Coin;
  • USDT;
  • BUSD;
  • USDC;
  • Wrapped Bitcoin;
  • DAI.

And also pairs with fiat currencies: EUR, GBR, AUD. You can fund your account with any of these currencies. If you have another cryptocurrency, you need to exchange it on the trading platform. You can also buy digital coins with fiat using a bank card directly from the exchange interface. It is not necessary to deposit large amounts at once. The Liquid Swap service has a relatively low minimum entry threshold.

The history of financial transactions on this service of the Binance crypto exchange begins in the “Liquidity” section. In order to have something to exchange and withdraw, you need to make a share in the common pool. To do this, you need to select a pair and indicate the amount of the deposit.

Each coin has a minimum and maximum entry threshold. You can deposit one of the assets, or both assets at once. The final amount is determined in accordance with the price at the time of order execution. Make sure that there are enough funds on the deposit to carry out the operation, otherwise the system will reject it.

To complete the transaction, you need to check the box opposite: “ I have read, understand and accept the Binance Liquid Swap Terms of Service ” and click the “ Add ” button .

Liquid Swap user interface

In appearance, this service resembles other platform products, everything is clear and intuitive.

There are 4 tabs available.

  1. Liquidity . Designed for depositing and withdrawing assets with Liquid Swap.
  2. An exchange is an interface for conducting transactions with supported tokens. Compared to the spot market, Liquid Swap has more stable rates and minimal commissions.
  3. My share displays the current total value of your contribution to the liquidity pool and the amount of profit earned. At the bottom there are columns: “ Liquidity history ”, “ Awards received ” and “ Distribution history ”.
  4. History shows the history of trades made on Liquid Swap.

When you log in for the first time, a risk warning window will pop up. You will need to read the information and check the box, thereby confirming that you are familiar with the basic principles of the service and agree to the terms of use.

Stable pool

There are only 6 pairs here. But, working in this section, you are guaranteed to receive a constant percentage of the profits.

Innovation pool

There are twice as many pairs as in the stable pool. Income is calculated at a floating rate; in mixed pairs (cryptocurrency + fiat), commissions for executed transactions are not distributed among liquidity providers.

First trade on Liquid Swap

To buy or sell one of the supported cryptocurrencies in this section:

  1. Enter the exchange.
  2. Select Finance / Liquid Swap.
  3. Open the “Exchange” tab.

Now you need to indicate the direction of the exchange and enter the amount. Cost, commission size and slippage level will be calculated automatically. Please note that the final strike price may vary. After the order is placed, click “Exchange” to place.

How do I check my balance?

So, you have contributed to the liquidity pool and now all that remains is to observe the process. To check the status of your Binance Liquid Swap account. You must first enter the exchange, then go to the liquidity pool and select the ” My share ” tab .

By default, contributions and rewards for participation are displayed in USD. You can collect the accrued interest at any time by clicking the Get All button . The history of the share change and the awards received is available in the same tab.

What are the pros of Liquid Swap?

Binance Liquid Swap uses the same principles as decentralized protocols like Uniswap, with the exception of centralized exchange. This approach makes it easier and cheaper to use the product.

Exchange clients can either swap tokens or provide liquidity to Binance Liquid Swap pools to receive rewards. Of course, making a minimum contribution will not make millions, but without the hassle, you will get an increase in capital. There are low commissions and low slippage, and the rate displayed during the swap is as close as possible to the result of the transaction. In addition, Binance is a reliable and secure cryptocurrency trading platform. It cannot even be called an ordinary exchange. It is a whole ecosystem created to take blockchain technology to the next level.

Conclusion

If you are a crypto trader by vocation and can make money where others fail, then maybe the size of the reward on Binance Liquid Swap will seem average to you.

But you also need to rest, and during this time, invest in a pool of liquidity so that money continues to make money. And for other users, Liquid Swap is a good option for passive earnings. Yes, the contribution will not increase a million times, but on the other hand, you will not go bankrupt. Or you can deposit part of the money into the liquidity pool, and use the other for trading. This way you can diversify your risks.

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