Centralized Exchanges
Learn how to trade stablecoins on centralized exchanges, understand fees and security considerations.
What is a Centralized Exchange?
A Centralized Exchange (CEX) is a cryptocurrency trading platform operated by a company, where users deposit funds into the exchange for trading. Unlike Decentralized Exchanges (DEX), CEX requires trust in the exchange to manage funds and execute trades.
Core Features
1. Centralized Management
- Operated and managed by companies
- Funds held by exchange
- Requires trust in exchange
2. Regulatory Compliance
- Regulated by regulatory bodies
- Requires KYC/AML
- Relatively compliant
3. Rich Features
- Spot trading
- Derivatives trading
- Fiat on/off-ramp
- Savings services
4. User Experience
- Simple to use
- Friendly interface
- Customer support available
Major Centralized Exchanges
1. Binance
Introduction:
- World's largest cryptocurrency exchange
- Supports multiple stablecoins
- Rich features
Supported Stablecoins:
- USDT, USDC, FDUSD
- Multiple stablecoin trading pairs
Features:
- Best liquidity
- High trading volume
- Low fees
- Rich features
Fees:
- Spot trading: 0.1% (can be reduced to 0.075% with BNB)
- Stablecoin trading: Some zero-fee pairs
Suitable for:
- All users
- Seek low fees
- Need high liquidity
2. Coinbase
Introduction:
- Largest compliant exchange in US
- One of the safest exchanges
- Supports fiat on/off-ramp
Supported Stablecoins:
- USDC (primary)
- USDT
Features:
- Safest and most reliable
- US compliant
- Good user experience
- Has insurance
Fees:
- Coinbase Standard: ~0.5% spread + fixed fees (for small trades)
- Coinbase Advanced Trade: 0.05% - 0.60% (based on trading volume)
- Some stablecoin pairs: 0% fees
- Coinbase One subscription: Zero trading fees for eligible trades
Suitable for:
- US users
- Seek security
- Newbie users
3. Kraken
Introduction:
- US compliant exchange
- Long history
- Safe and reliable
Supported Stablecoins:
- USDC, USDT
- Multiple stablecoins
Features:
- Good security record
- US compliant
- Rich features
- Good customer support
Fees:
- Trading fees: 0.16% - 0.26%
- Medium level
Suitable for:
- US users
- Seek security
- Need customer support
4. OKX
Introduction:
- Globally renowned exchange
- Rich features
- Supports multiple currencies
Supported Stablecoins:
- USDC, USDT
- Multiple stablecoins
Features:
- Rich features
- Good trading depth
- Low fees
- Global support
Fees:
- Trading fees: 0.08% - 0.1%
- Relatively low
Suitable for:
- Global users
- Seek rich features
- Need low fees
5. Bybit
Introduction:
- Primarily derivatives trading
- Rich features
- Good user experience
Supported Stablecoins:
- USDC, USDT
- Multiple stablecoins
Features:
- Strong derivatives features
- Low fees
- Good user experience
- Rich yield products
Fees:
- Spot trading: 0.1%
- Relatively low
Suitable for:
- Derivatives traders
- Seek low fees
- Need yield products
How to Trade on CEX
Preparation
1. Register Account
- Visit exchange website
- Register account
- Complete email verification
2. Complete KYC
- Upload identity documents
- Complete face recognition
- Wait for approval
3. Deposit Funds
- Choose deposit method (fiat or crypto)
- Follow instructions to deposit
- Wait for confirmation
Trading Steps
1. Select Trading Pair
- Enter trading page
- Select stablecoin pair (e.g., USDT/USDC)
- Check current price
2. Place Order
- Choose order type (market/limit)
- Enter trading amount
- Confirm order information
3. Confirm Trade
- Check trade information
- Confirm fees
- Submit order
4. Trade Complete
- Wait for order execution
- Check trade history
- Verify account balance
Trading Fees Explained
1. Trading Fees
Definition:
- Trading fees charged by exchange
- Usually calculated as percentage of trade amount
- May be charged to both buyers and sellers
Common Rates:
- Binance: 0.1% (can be reduced to 0.075% with BNB)
- Coinbase: 0.05% - 0.60% (Advanced Trade), ~0.5% + fixed fees (Standard)
- Kraken: 0.16% - 0.26%
- OKX: 0.08% - 0.1%
- Bybit: 0.1%
Influencing Factors:
- Trading volume (VIP level)
- Holding platform tokens
- Trading pair type
2. Withdrawal Fees
Definition:
- Fees for withdrawing funds from exchange
- Depends on network and currency
- May be high
Common Rates:
- Stablecoin withdrawal: 0-2 USDT/USDC
- Depends on exchange and network (ERC-20, TRC-20, BEP-20, Solana, etc.)
How to Reduce:
- Choose networks with low fees
- Batch withdrawals
- Use internal transfers
3. Fiat On/Off-Ramp Fees
Definition:
- Fees for converting between fiat and crypto
- May include exchange rate spread
- Depends on payment method
Common Rates:
- Bank transfer: 0-1%
- Credit card: 3-5%
- Other methods: Varies
Security Considerations
1. Account Security
Recommendations:
- Use strong passwords
- Enable two-factor authentication (2FA)
- Don't share account information
- Regularly check login records
2. Fund Security
Recommendations:
- Don't store large amounts
- Use cold wallets for storage
- Regularly withdraw funds
- Diversify across multiple exchanges
3. Trading Security
Recommendations:
- Carefully check trade information
- Confirm trading pair is correct
- Don't click suspicious links
- Use official apps
4. Platform Selection
Recommendations:
- Choose reputable, compliant exchanges
- Check platform history
- Verify insurance coverage
- Monitor security announcements
Trading Strategies
1. Spot Trading Strategy
Suitable for:
- Stablecoin swaps
- Portfolio adjustments
- Arbitrage trading
Recommendations:
- Choose pairs with good liquidity
- Pay attention to fees
- Split large orders
2. Arbitrage Strategy
Suitable for:
- Price differences between exchanges
- Price differences between stablecoins
Requirements:
- Fast execution
- Low fees
- Sufficient funds
3. Long-term Holding Strategy
Suitable for:
- Long-term investment
- Asset allocation
Recommendations:
- Choose secure exchanges
- Regularly check accounts
- Consider withdrawing to wallets
Common Questions
Q: Which is better, CEX or DEX?
A: Each has advantages:
- CEX: Simple to use, good liquidity
- DEX: No need to trust, more transparent
- Choose based on needs
Q: Can trading fees be reduced?
A: Yes:
- Increase trading volume (VIP level)
- Hold platform tokens
- Choose exchanges with low fees
Q: How to choose an exchange?
A: Considerations:
- Security
- Fees
- Liquidity
- Features
- User experience
Q: Is it safe to keep funds on exchange?
A: Has certain risks:
- Don't store large amounts
- Choose exchanges with insurance
- Regularly withdraw to wallets
- Diversify investments
Summary
Centralized exchanges provide:
- Simple to Use: Easy operations, newbie-friendly
- Good Liquidity: Good trading depth, small slippage
- Rich Features: Multiple trading and financial services
- Good User Experience: Friendly interface, customer support
When Using CEX:
- Choose reputable, compliant exchanges
- Secure your account properly
- Understand fee structure
- Don't store large amounts
- Regularly withdraw to wallets
Remember: While CEX provides convenience, it also requires trust in the exchange. Choose reliable platforms and manage security properly for safe usage.
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