Binance, a prominent cryptocurrency exchange, is preparing to introduce a self-trade prevention (STP) mechanism with the aim of inhibiting the execution of orders that might lead to self-trading.
Starting from October 26, 2023, the “expire maker” STP mode will become the default setting for all trading pairs and orders across Binance’s spot and margin trading platforms.
Once the STP feature goes live, users will have the ability to review orders that have expired due to the STP function on the Binance official website, Binance App, and Binance Desktop App via the transaction history page. This innovation primarily caters to application programming interface (API) traders who employ automated programs to execute trades using an exchange’s trading engine.
So, what exactly is a self-trade? It occurs when an API user or a group of related users intentionally or unintentionally trade with themselves. The STP function provides a safeguard for API traders against accidental self-trading transactions, helping users avoid incurring unnecessary fees associated with such occurrences.
Binance officials stress the importance of STP, stating that without this feature, unintentional self-trading could transpire in a competitive market. For instance, situations might arise where orders from separate trading units of the same entity, sharing the same unique UID but with unrelated trading strategies, inadvertently trade with each other.
While STP addresses unintentional self-trades, Binance prohibits intentional self-trades on its platform. When self-trades are executed deliberately to create a misleading illusion of trading activity, they can be deemed a form of market manipulation. Binance’s vigilant market surveillance team actively monitors market activities to identify intentional self-trades and other forms of market manipulation, using advanced tools for tracking and investigations.
It’s worth noting that Binance had previously integrated the STP feature for USD-margined futures via API in August 2023. Importantly, the STP function remains optional, taking effect only when users choose to enable it, as emphasized by the company.