I often see posts about how the exchange has deceived or taken money, etc., especially from newbies who have lost their deposit and are starting to shout that all their money has gone to the exchange!

Below I described where your money goes and how the exchange makes money.


### Who gets paid when traders lose their deposits on the exchange?


When traders lose their deposits on an exchange like Binance, the money does not automatically go to the exchange. Here are the main points to consider:


1. Other Traders: In most cases, the money goes to other traders. Financial markets are essentially a zero-sum game, where one trader's gain is offset by another's loss.


2. Market and Liquidity: In volatile market conditions, money can "disappear" due to changes in asset values. For example, if the price of an asset drops sharply, its market value decreases and the money essentially dissolves in the market.


3. Brokers and Market Makers: Sometimes brokers or market makers may receive a portion of the funds through spreads or commissions for executing orders.


### How does the exchange make money?


Exchanges like Binance make money on a few key points:


1. Transaction fees: The exchange's main source of income is trading fees. For each purchase or sale of assets, traders pay a small percentage of the transaction amount.


2. Token and ICO Listing: Exchanges may charge a fee for listing new cryptocurrency tokens or for conducting an ICO (Initial Coin Offering) on ​​their platform.


3. Liquidity Pools and Margin Trading: Exchanges earn interest by providing liquidity and offering margin trading, where traders borrow to increase their positions.


4. Additional services: Services such as staking, derivatives, futures and other financial products also generate income for the exchange.


### How the exchange makes money on futures


1. Trading commissions: The main source of income is the commission for opening and closing positions. The exchange charges a small percentage of the transaction amount for each transaction.


2. Funding and Margin Requirements: Exchanges offer margin trading to traders by providing loans to increase their positions. For this, they charge interest. For example, Binance has a futures funding system where traders pay interest to hold their positions.


3. Liquidation Fee: If a trader's position reaches the liquidation level (i.e. losses exceed available margin), the exchange may charge an additional fee to liquidate the position.


4. Additional Services and Products: Exchanges offer a variety of futures products, including perpetual contracts and fixed-date contracts. Additional fees may apply for using these products.


### Example


Imagine you open a $10,000 position in the futures market with a trading fee of 0.05%. This means the exchange will make $5 on the trade. If you hold the position on margin, the exchange will also make money on interest rates.


### Important Notes


- Technological failures and manipulations: Sometimes technical failures or manipulations can cause suspicion among users. In such cases, it is important to seek help from support and follow their recommendations.


- Education and training: It is especially important for beginners to understand the risks and specifics of trading. Financial education helps reduce the risk of losses.


Conclusion: Exchanges are intermediaries and platforms for trading, and their income is based on commissions and additional services. The funds that traders lose are usually redistributed among other market participants. I hope this article helped you understand the mechanisms of the exchange and the distribution of funds.

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All the best!