Binance announced its Pre-Market Spot Trading service, developed jointly by Binance Spot and Binance Launchpool, allowing users to purchase tokens before they are officially listed on the spot market. 

Unlike other exchanges that use derivatives for pre-market trading, Binance is reportedly the first to offer ‘actual tokens’ for trade during this period.

"We built Binance Pre-Market to meet user demand for pre-market spot trading, and enhance the Binance ecosystem so users can enjoy greater utility and token projects can extend their lifecycle on our platform,” Vishal Sacheendran, Binance Head of Regional Markets, said in a recent statement.

What is Binance Pre-Market?

Binance Pre-Market is designed to give users early access to selected Binance Launchpool tokens. The service benefits both Binance users and token projects by extending the life cycle of the tokens and offering early market entry.

When a Launchpool project is selected for pre-market trading, Binance users can continue subscribing to Launchpool as normal and will receive their allocated tokens. Once the pre-market period starts, all Binance users can trade these "pre-market" tagged tokens. This period will close at least four hours before the token’s official listing on the spot market, and Binance will issue a separate announcement for the listing date.

Binance will announce when specific Launchpool tokens are selected for pre-market trading, as well as the start and end dates for each pre-market period. 

Due to regulatory restrictions, some regions, including the U.S., Canada, Japan, and Spain, are not eligible to use this service, according to The Block.

Features of Binance Pre-Market

Binance’s Pre-Market service features include:

• Early Market Entry: Users can buy or sell tokens before they are officially listed on the spot market, providing an opportunity to capitalize on early price movements.

• Stringent Vetting: All tokens listed for pre-market trading undergo Binance’s vetting process.

• No Extra Fees: Users pay only the standard spot trading fees on Binance, which are known for being competitive in the industry, the exchange reported.

• Utility for Launchpool Users: Those subscribed to Binance Launchpool can take advantage of early market movements, trading their allocated tokens before the official spot market launch.

Comparison With Other Exchanges

While Binance is the first to offer pre-market spot trading with actual tokens, other exchanges have explored similar features with derivatives. For example, Bybit offers pre-market trading that relies on collateralized assets, meaning users are trading contracts backed by USDT rather than the actual tokens. 

Coinbase also provides a similar service through its "pre-launch markets," which trades perpetual futures contracts for tokens before they are officially listed.

However, Binance ensures that they are directly interacting with the assets, rather than relying on derivatives, according to the recent announcement.