Getting to Know Binance from Scratch: The First Lesson for Beginners Entering the Crypto World

In November 2022, when the FTX exchange collapsed, 32-year-old programmer Li Ming found his account balance of $120,000 instantly reduced to zero. At the same time, his colleague Wang Fang, who insisted on using Binance, not only kept her assets intact but also earned three times her investment through Binance Launchpad.

This is another segment of our fictional story, but the principles and elements mentioned are still real. These two stories reveal the harshest survival rule in the cryptocurrency world: choosing an exchange is a matter of life and death.

If we compare the crypto world to a vast financial jungle, exchanges are the transportation hubs and distribution centers within that jungle. Here, hundreds of billions of dollars flow daily, serving as the entry point for ordinary people into the crypto world, as well as the birthplace of countless scams and get-rich-quick myths. Imagine walking into a bank with your hard-earned savings, only to find that this bank has no deposit insurance, no regulatory license, and even the staff behind the counter might run off with the money at any moment—this is the reality for the vast majority of cryptocurrency exchanges.

Choosing an Exchange is Important

In the crypto world, there may be hundreds or even thousands of exchanges, with the largest being Binance.

Binance's status is akin to a "central bank + stock exchange" in the crypto world. It not only provides trading services for mainstream cryptocurrencies like Bitcoin and Ethereum but also offers complex functions such as lending, wealth management, NFT trading, and even metaverse land auctions. However, Binance's rise was not accidental: when it was founded in 2017, founder Zhao Changpeng (CZ) launched the industry-first SAFU risk protection fund with the slogan "user asset safety first," promising to deposit 10% of trading fees into an independent cold wallet for user compensation in extreme situations. This "transparent operation" strategy made Binance a rare safe haven for retail investors amid the collapse of competitors like FTX and Celsius.

The world of exchanges is roughly like this: Binance stands alone at the T1 level, with about 10 others in the T2 tier, while the rest can be classified as "shady" exchanges. Since you need to deposit your assets into an exchange, it's safer to choose at least a T2 exchange, and definitely avoid shady exchanges, as your assets will not be secure there.

But with so many exchanges, how do we distinguish which ones are shady? It's simple: just remember the names of some reliable exchanges and avoid using any others you haven't heard of. For beginners, understanding the tier classification of exchanges is crucial.

The first tier is dominated by Binance (Binance in English). The second tier includes names like Coinbase, OKX, Bybit, Bitget, and Gate, which are like "five-star hotels" in the crypto world—asset reserves are publicly verifiable, liquidity is ample, and they hold regulatory licenses from multiple countries. Coinbase, as a publicly listed company in the U.S., has its financial reports rigorously audited; OKX has an advantage in contract trading due to its localized operations in the Chinese-speaking market. There are also some like Kraken and Mexc, which are like "budget chain hotels"—smaller in scale but each has its specialties and are still relatively reliable.

What we really need to be wary of are the third type of "shady exchanges." These platforms are usually registered in regions with loose regulations, such as Seychelles or Malta, and attract users with promises of "high commissions" and "hundredfold returns." The JPEX scam case that shocked Hong Kong in 2023 is a typical example: this exchange promised a 200% annual return and ultimately absconded with $420 million of user assets. Identifying such platforms is actually traceable—if an exchange's homepage is filled with flashy ads like "zero fees" and "trade to win a BMW," primarily promoting on domestic social media, and the tokens listed all have animal names or are meme-based, then you are just one deposit away from losing everything.

This point is crucial: truly reliable exchanges generally do not advertise in domestic media because most users are crypto novices, while more knowledgeable users are usually on foreign networks. The reason they don't promote on foreign networks but target novices is obvious.

About Binance Launchpad

When it comes to Binance, we must understand "Binance Launchpad." Within Binance's ecosystem, the "Launchpad" function is one of the most attractive wealth-generating machines. The so-called Launchpad is akin to new stock subscriptions in traditional stock markets, except here the "new stocks" are tokens issued by blockchain projects. Binance offers retail investors the opportunity to acquire early project shares at a very low cost through exclusive TGE and Launchpool models. The token for Binance exchange is BNB, and users only need to hold BNB and perform simple operations to participate in each Launchpad event to earn certain returns.

This Launchpad activity is Binance's way of attracting users; Launchpool generally requires staking for about seven days, while exclusive TGE only requires staking for two hours. Launchpad is not an activity that can make people rich quickly; typical returns are around 1-7%. However, due to the almost nonexistent risk and the short staking period, it is highly favored by users. After all, it only takes two hours to a few days, while putting money in a bank for a fixed term wouldn't yield this much in a year, making it quite attractive.

However, novices should be cautious of any promises of returns that defy common sense. The returns from Binance Launchpad are indeed relatively decent, but the frequency is about once a week during bull markets and may not occur for a month during bear markets; this is already the highest yield from the largest and most authoritative exchange in the crypto market.

So when you see other exchanges advertising "earn 1% daily on USDT deposits" or "trade to win a Tesla," remember that these gimmicks often hide traps for capital harvesting. Additionally, continuously enhance your understanding. From studying the release mechanisms in token economic models (such as being wary of team tokens unlocking and selling after six months) to tracking industry reports from Binance Research, only by establishing your own analytical framework can you avoid becoming a victim of market fluctuations.

(Risk Warning: The crypto market is extremely risky; do not invest funds you cannot afford to lose.)