Binance’s Self-Trade Prevention (STP) is a new spot trading function that allows API users.
Self-trading is the phenomenon in which a user or a group of related users enters into a transaction with themselves.
Deliberate self-closing to create the illusion of trading activity is market manipulation.
Note that intentional self- execution is strictly prohibited in Binance’s terms of use.
But not all self-deals are planned or intentional.
Some users running different strategies at the same time may sometimes accidentally match two of their own orders.
Starting January 26, 2023, Binance API users will be able to use the new spot trade self-fill prevention (STP) feature, which prevents order execution if the order will be self-filled.
The STP function can set the Maker or Taker order to be invalid, or both at the same time, which is specified by the user.
After using the STP function, users can avoid any form of unintentional self-transaction.
It can also ensure that the running trading strategy will not lead to self-dealing, so as to save unnecessary transaction costs.
Binance’s Self-Trade Prevention (STP) is a new spot trading feature that allows API users to set up a safety net to prevent their orders from being matched.
Binance launched a new self-transaction prevention (STP) function to prevent API spot trading users from performing self-transactions.
Without this feature, there could be unintentional self-deals in a highly competitive market.
For example, the same firm, using the same unique UID, issues orders for different trading units in unrelated trading strategies that happen to trade with each other.
Coordinating trading strategies in a fast and competitive market is difficult for traders, so some traditional exchanges and cryptocurrency trading platforms will provide traders with self-dealt prevention functions.
This article covers the basics of self-deals, what Binance is doing to protect the users, how and why unintentional self-deals form, and Binance Self-Deal Prevention (STP) feature that prevents self-deals from forming.
Go to Binance’s Official Website
What is self-dealing?
Self-trading is the phenomenon in which a user or a group of related users enters into a transaction with themselves.
Both parties to the transaction are the same trader, so there is no actual change in the beneficiary of the asset transaction.
This can disrupt the natural process of price discovery, distorting supply and demand data.
It may also distort the asset’s price data and reduce its credibility.
Therefore, according to Binance’s terms of use, deliberate self-dealing is strictly prohibited. Binance closely monitors any form of market manipulation on the platform.
Protect users
Binance’s market surveillance team closely monitors market behavior to identify deliberate self-execution and any other form of market manipulation.
Binance has a full range of tools to investigate violators and track intentional self-dealing behavior.
But it’s also important to realize that not all self-closings are intentional.
For example, a large active trader (including a liquidity provider) running several different strategies at the same time may inadvertently match two of his orders.
The same happens when the same organization operates different trading units with the same unique UID.
The top priority is to protect all Binance users and provide traders with powerful trading tools.
Therefore, the STP function launched by Binance can help traders who have the risk of self-transaction to avoid risks.
Go to Binance’s Official Website
Binance launches self-deal prevention feature for API users
Self-Trade Prevention (STP) Feature Introduction — Release Date: January 26, 2023 — Binance users who trade in the spot market via the API can set STP parameters for orders to prevent any unintentional self-fills.
After enabling this parameter, users can choose to invalidate the Maker (pending order), Taker (taker) order, or both of them to avoid self-execution.
Please note that the STP function is only available for API users and not for users who trade on Binance website, mobile app or desktop app.
The reason for this is that manual operations, whether intentional or unintentional, are extremely difficult.
In fact, self-deals only happen in quick algorithmic trades done by the API.
Only the unexpected self-transaction phenomenon in large-scale API transactions conducted by VIP users may have a significant impact on market data, so the STP function launched is specifically aimed at spot transactions through API.
Users who do not use this feature are not affected.
Importance and Benefits of STP Features
In the process of actual market activities, some users’ strategies may lead to non-accidental self-transaction phenomena.
After these users use the STP function, they can not only maximize their transaction efficiency but also save unnecessary transaction fees.
In addition to cost savings, the STP feature helps them prevent self-transactions and being listed as suspicious in investigations.
Additionally, the launch of this tool maintains the integrity of market data by reducing the number of unintentional self-deals.
After using the STP function, users can use this tool to conduct efficient transactions and avoid any form of unintentional self-transactions.
We strongly recommend that API users use the STP function to prevent unintentional self-transactions, which may have a negative impact.
Users considering certain compliance requirements or risk management responsibilities will also find the STP feature useful.
Please check Binance official website or contact the customer support with regard to the latest information and more accurate details.
Binance official website is here.
Please click "Introduction of Binance", if you want to know the details and the company information of Binance.
Comment by Hans
April 24, 2024
as I am trading here various assets, for me it's the most important feature. i mean, flexibility in tradable markets. i alternate trading styles, meaning that sometimes I trad...