Binance exchange has launched self-transaction prevention (STP) function for all spot and margin traders with intent to prevent unnecessary trading fees associated with unintentional self-trades.
On October 26, Binance will implement the self-transaction prevention (STP) function for all spot and margin trading users, 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.
According to the announcement, once the STP feature is live, users can view which orders have expired due to the STP function on the transaction history page of the Binance website, Binance App, and Binance Desktop App.
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 targets application programming interface (API) traders who set up specific programs to execute transactions automatically with an exchange’s trading engine.
Self-trading occurs when an API user or collection of related users intentionally or unintentionally trade with themselves. The STP enables API traders to avoid inadvertent self-trading transactions, helping users prevent unnecessary fees associated with such transactions.
Without STP, self-trading could occur unintentionally in a competitive market. “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.
The STP manages unintentional self-trades, 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.
“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.”
As indicated, in August 2023, Binance integrated the STP feature for USD-margined futures on API. “The STP function is optional and only takes effect when users enable it,” noted Binance.
