Solomon Samuel Cryptocurrency trade Binance is enhancing its tools to prevent self-trades that incur superfluous trading costs. Binance will implement the self-transaction prevention (STP) feature for all spot and margin traders on October 26, the company announced on its blog on October 11.
The “expire maker” STP mode will become the default option for all trading pairs and orders on Binance’s spot and margin trading platforms following the integration.
Once the STP feature is live, users will be able to verify what orders have expired due to the STP function on the Binance official website, Binance App, and Binance Desktop App through the transaction history page, according to the announcement notes.
Binance’s STP functionality, introduced in January 2023, is designed to prevent the execution of an order if it would result in a self-trade.
The function is intended for application programming interface (API) traders, who configure specific programs to autonomously execute trades with an exchange’s trading engine.
Self-trading occurs when an API user or collection of related users intentionally or unintentionally trades with themselves.
The STP enables API traders to avoid self-trading by mishap, thereby assisting users in avoiding the fees associated with such transactions. In a competitive market, unintentional self-trading could occur without STP.
“For instance, when orders from different trading units of the same firm, using the same unique UID but with unrelated trading strategies, post orders that trade with one another,” Binance explained.
Unintentional self-trades are managed by the STP, while intentional self-trades are prohibited on the exchange.
“When self-trading is done intentionally to create the illusion of trading activity, it can be considered a form of market manipulation,” Binance wrote, adding that the STP feature for USD-margined futures on the API was implemented in August 2023.
“Our market surveillance team actively monitors market activity to identify intentional self-trading and any other forms of market manipulation. Binance has extensive tools to track intentional self-trading and investigate offenders.”
“The STP function is optional and only takes effect when users enable it,” noted Binance.
