Binance, one of the world’s largest cryptocurrency exchanges, has introduced a Self-Transaction Prevention (STP) functionality designed to prevent unintentional self-trades and reduce trading fees for its users. The STP feature was officially announced in January 2023 and is set to be fully implemented for all spot and margin trading users on October 26, 2023.
Binance’s STP functionality: A solution to unintentional self-trades
Cryptocurrency trading can be complex, especially for professional traders who rely on automated trading strategies. Unintentional self-trading, where an API user or a group of related users inadvertently trade with themselves, can result in unnecessary fees and market inefficiencies. Binance’s STP functionality addresses this issue by preventing orders that would lead to self-trades from executing.
The STP functionality primarily targets application programming interface (API) traders who use specific programs to automate their trading activities. These traders often require a robust system to ensure that their trading strategies execute smoothly without encountering accidental self-trades.
Upon the full integration of the STP feature on October 26, 2023, Binance will make the “expire maker” STP mode the default setting for all trading pairs and orders on its spot and margin trading platforms. This default setting will provide added protection against self-trading for all users and help reduce the risk of unintentional trading activity.
How Binance’s STP functionality works
With the STP feature in place, users will have the ability to monitor and track orders that have expired due to the STP function. This information will be easily accessible through the Binance official website, the Binance App, and the Binance Desktop App via the transaction history page.
By offering transparency and user-friendly access to STP-related data, Binance aims to empower traders with the information they need to understand the impact of the STP feature on their trading activities.
Binance recognizes that unintentional self-trading can occur in a competitive marketplace, especially when orders from separate trading units of the same firm, utilizing the same unique UID (User ID), and employing unrelated trading strategies, happen to intersect. The STP functionality acts as a safeguard, preventing these unintentional trades and protecting users from incurring unnecessary fees.
While unintentional self-trading transactions are addressed through the STP feature, Binance remains committed to upholding market integrity by prohibiting intentional self-trades. When self-trading is carried out intentionally to manipulate market activity, it can be considered a form of market manipulation.
Binance’s market surveillance team actively monitors market activity to identify intentional self-trading and other forms of market manipulation. The exchange has robust tools and mechanisms in place to track intentional self-trading and investigate any offenders.
Prior to the full rollout of the STP feature for spot and margin trading, Binance had already integrated this functionality for USD-margined futures on API in August 2023. Importantly, the STP function is optional, meaning that it only takes effect when users choose to enable it. This flexibility allows traders to tailor their trading experience to their specific needs while still benefiting from the protections that STP offers.
