Understanding the difference between Binance vs Uniswap5 min read

Binance and Uniswap are among the most popular cryptocurrency exchanges that crypto users use. Thanks to the platform’s cutting-edge technology, features and unique offerings, which have made these exchanges stand out from the crowd.

Binance is a popular exchange for digital assets. With hundreds of cryptocurrencies listed and high Liquidity, it is the preferred currency exchange for most traders and investors. On the contrary, Uniswap is the leading Eth-based decentralized exchange (DEX) in revenue and number of users.

But which exchange should you use between Binance and Uniswap? How is Binance different from Uniswap? Let’s find out.

First, let’s look at the key considerations for each platform. 

Trade volume and Liquidity

Uniswap is a decentralized exchange (DEX) based on Ethereum, so it does not offer any liquidity for cryptocurrencies other than Ether and ERC-2O tokens. However, there are tokens such as WBTC, which is fully backed by Bitcoin and track the price of Bitcoin.

Thanks to WBTC, users can easily use and trade Bitcoin on the Ethereum blockchain.

If you want to trade common pairs like ETH/USDT, LINK/ETH, etc., you can find enough Liquidity on Uniswap and Binance.

If the token/pair you plan to trade is not yet famous, first check that you can swap this token and that there is sufficient Liquidity in Uniswap. In most cases, you can use the Uniswap platform to trade tokens that are not on Binance.

Binance is arguably the most liquid cryptocurrency exchange, and Uniswap can be considered its decentralized counterpart. Depending on the token you are trading and your needs, you can use both exchanges for trading.

Digital Assets Accepted

Uniswap, a contract-powered smart DEX, only accepts ERC-20 tokens. This does not mean that users cannot exchange other resources on the platform. The associated tokens, such as WBTC and renBTC, are available on Uniswap. These tokens are ERC-20 representations of Bitcoin.

Uniswap supports enterprise and peer resources that users normally cannot obtain from deposit alternatives due to their unauthorized nature. Because it’s easy to run a trading pair on Uniswap, it’s often the first place to list new Ethereum-based assets. Even when trading pairs are then added to custodian exchanges, such as Coinbase or Binance, Uniswap generally has very competitive Liquidity and rates.

On the other hand, Binance supports a variety of cryptocurrencies based on various blockchains, in addition to the ERC-20 tokens. The exchange also accepts fiat currencies, such as EUR and GBP, a feature that is not available in Uniswap.

Security

Since Binance is a centralized exchange of digital assets, users don’t have to worry about protecting their wallets and assets. As long as they’ve set up 2FA on their Binance account and follow standard security protocols, they’re safe. Also, the Binance Exchange platform has a fund for its users, which is called “SAFU”. SAFUS provides insurance against possible breaches, and this has made users feel safe using Binance.

By using decentralized exchanges like Uniswap, you are solely responsible for the security of your wallet and digital assets. If you trust your computer’s security and use popular and secure wallets, such as MetaMask, you are unlikely to lose your crypto assets or be prone to cyber-attacks.

Uniswap trading does not require users to relinquish control over their trading assets. Users can trade on the platform through Ethereum with the security and convenience of their wallets. While self-custody of digital assets is not a completely risk-free activity, it eliminates the risk of commercial piracy.

If you trade or own large amounts of virtual assets, you can buy a hardware wallet. This will help separate your private keys on a secure chip and keep your account safe. Also, you can connect your Ledger wallet to MetaMask and securely use any decentralized application (dApp), including Uniswap.

Fees

Binance trading is relatively profitable compared to Uniswap. The Uniswap exchange has a fixed rate of 0.30%. Regardless of the trade volume, size, etc., the platform charges a transaction fee of 0.30% when trading on the forum. Meanwhile, Binance is known and loved for its low trading rates, which start at 0.10%. 

Users can simply open an account with a 20% commission discount and/or keep BNB in ​​their wallet to pay fees with BNB.

When trading on Uniswap, users must pay transaction fees for each transaction, as transactions are carried out on the Ethereum blockchain network through smart contracts. Before making a transaction on Uniswap, users need to authorize the smart contract to spend their tokens by pressing the “Approve” button, which will again incur transaction fees.

So, which is better?

Binance which is better

Binance and Uniswap have highly preferred cryptocurrency options due to their unique offerings. Uniswap users should not be allowed to transfer, trade or invest in cash funds. Anyone with an internet connection and an Ethereum wallet can participate for free. Users who value privacy or those who live in countries with restrictive capital controls tends towards Uniswap.

Binance is a big name, and it attracts a large user base with its unique features, such as low trading fees, support for over 180 digital assets, Binance futures, 24/7 customer service, etc.

It is not easy to choose an exchange as a top platform, as the choice depends on the investors and their priorities.

Bottom Line

Uniswap and Binance are two of the most famous crypto exchanges, and each has several cons and pros.

One is decentralized and uses an AMM model, while the other is a centralized exchange that works very differently. Because Binance and Uniswap are very different and serve different needs, they are both suitable for traders, depending on their needs.