BaseFEX Exchange Review: A Non-KYC Derivatives Exchange (Exchange)
Some of you reading this may not have heard of BaseFEX, and that’s not a surprise in a market where new exchanges launch all the time. It is one of the lesser-known derivatives exchanges, launching at the tail end of 2018.
But, what is the deal with BaseFEX? What do they offer to users and is it a safe exchange to use? In this review, we will take a deep dive into this exchange and give you all the answers. We took an in-depth look at the exchange by examining the team, security, fees, platform functionality and asset coverage, among other metrics.
If you wish to skip to the summary to see the SWOT analysis, matrix score, and rating, click here.
Finally, if you find this review beneficial and wish to start trading on BaseFEX, sign up and register for trading by clicking here and receive a 10% discount off your trading fees for six months as a bonus! Proof of Review will receive a small referral credit, which will help us to continue providing reviews like these.
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BaseFEX is a cryptocurrency derivative exchange offering Perpetual contracts for Bitcoin and altcoins with leveraged margin trading, with all profits and losses settled in Bitcoin or USDT. The exchange was launched in 2018 and is an incorporated company in Seychelles.
BaseFEX is a cryptocurrency derivative trading platform emphasising its leveraged trading, with up to 100x leverage on their Bitcoin and USDT base trading pairs. Derivatives are financial instruments which derive their prices and value by imposing certain conditions on an underlying asset. The most popular derivatives in the crypto world are futures, options, and swaps.
Newer exchanges like FTX, have been increasingly innovative with derivatives contracts offered, which provide new ways to gain exposure to crypto asset classes while maintaining a lower risk profile. Recent BitMEX Research reports show that the derivatives trading in cryptocurrencies account for more than one-quarter of the total trading volume, an astonishing fact considering the first derivatives products were launched only five years ago.
Based on the fact that the operating history of the exchange is more than 12 months, we award one mark to BaseFEX. We would like to see more innovation of features or markets, along with more daily volume, but considering the platform is only a year old, they have time to develop.
Like most exchanges, there are no public user numbers listed on the website, and we were unable to find any general information on user numbers from the project’s blog.
At the time of this review, there does not seem to be any current bonus available to incentivise users to sign up, or any current trading competition with a prize. However, BaseFEX did offer both incentives following its launch in 2018 to encourage adoption of its platform.
Finally, there are not any unique features or markets offered on the platform. The exchange provides settlements in USDT, which is a feature only offered among a handful of derivative exchanges. We feel that BaseFEX could do more to promote this feature to trades in encouraging adoption.
As mentioned, BaseFEX does not have any unique features over its competition in terms of markets, trading volumes or functions on the platform. However, the exchange takes user security very seriously, and in this regard, it stands out among other exchanges in the space.
This is displayed throughout the user experience, from the strong password required at registration, freezing of account after multiple incorrect password entries, the emergency account lock feature and biometrics features on its mobile apps.
There is a registered company listed on the BaseFEX website, Base Investing Corporation, registered company number 205276, indeed confirming that the project is registered in Seychelles. As a custodian of user funds, we always recommend that all exchanges follow the same practise as BaseFEX and list their public company information on their website.
We give the project full marks for this metric, including a bonus point based on the company being registered outside of the USA.
As a futures exchange, BaseFEX and others tend to list a handful of coins alongside its BTC base pairs. There is one new coin listing in the last 90 days on the platform, the EOS/USDT pairing.
All the pairs listed on the platform are relatively standard, with no new blockchains or codebases among the listed pairs. This is common among derivative exchanges as liquidity for their trading pairs is crucial.
The team choose which coin will be listed after a period of internal research and due diligence. We give a bonus point to BaseFEX as they do not charge for listings or rely on listing fees for revenues.
As with all derivatives exchanges, there is leveraged trading available on BaseFEX of ranging from 20x up to 100x on all its pairs.
There is no team information listed on the website; however, there is a LinkedIn profile, with employees listed.
We recommend that exchange teams display their public information and experience on networks such as LinkedIn and Github, to highlight their abilities to run a cryptocurrency exchange successfully. Due to the limited information available in the public domain, we are only able to award one mark for the general info listed for the team.
The team behind BaseFEX is mainly based in China and headed up by the CEO, Jesse Wu, who has a Bachelors and Masters degree in Computer Science and Software Engineering.
Jesse started his own company shortly after graduating, a video streaming mobile app Slide, which acquired 1 million daily active users and USD 1.5 million in monthly revenue. The CTO for BaseFEX and co-founder is Issac Zeng; however, we could not find any information on the teams LinkedIn profile.
Based on Jesse’s experience of successfully launching his startup, we can be positive about his ability to successfully start and grow a cryptocurrency exchange.
There are regular developments and updates for the exchange since launch in 2018. This is best highlighted on the projects blog page, with the most recent exchange updates implemented on the 9th Jan 2020.
The bulk of the developments since launch are focused around improving security, adding new listings and improving the user experience. As a result, we are impressed with the progress of development and award full marks for this metric.
The website states that BaseFEX is backed by an impressive range of partners, including:
- Big.ONE, one of the most significant spot exchanges that has over $500 million daily volume.
- InBlockchain, China’s most eminent venture capital fund in the cryptocurrency space.
- ZhenFund which invested in Huobi, and Ceyuan Ventures which invested in OKCoin.
Research into the listed partners above shows an impressive backing for BaseFEX. We award two marks for this section only due to the fact there are no specific advisors listed by name on the BaseFEX website or the LinkedIn page.
Funding / Expenditure / Revenue
There is no public information around funding for the exchange before launch, and there has been no token sale or public fundraising. The exchange is generating revenues from its trading volumes; however, we estimate these to be on the lower scale based on the volumes on each market.
BaseFEX does not have any public financial records, and this is the norm among exchanges in this industry. BaseFEX is a privately funded entity and has the right to keep this information private.
We score two out of three for this metric for BaseFEX. Nearly all exchanges we review miss out on the bonus point in this section due to a lack of transparent financial reports.
There is a public API available free to use and documented in both English and Chinese. A nice touch and not seen across many exchanges, giving BaseFEX full marks for the API metric.
The trading platform allows basic and advanced order types, as shown below. Advanced order types include Trigger Stop, Take Profit Limit and Market orders.
An interesting feature is that users can choose the Trigger condition based on the Mark, Index or Market price
These order types give the user flexibility to enter and exit positions without having to enter stop or take profit orders manually. For the advanced and flexible order types, we award full marks on this metric including a bonus point for the order confirmation screen before processing the order
There is no token associated with the BaseFEX exchange, so we award a bonus point.
We see exchange tokens as a grey area when it comes to trading platforms, as there successful exchanges without such as Bitmex and then successful ones with a token such as Binance. There is also the legal issues of whether the exchange token is classed as a utility or security token.
There are currently 2 BTC trading pairs which are BTC/USD and BTC/USDT, and 6 Altcoin pairs available paired against BTC which include ETH, XRP, BCH, LTC, EOS and BNB.
A unique feature is an ability for users to choose their trading pairs in the settlement currency of BTC or USDT.
BaseFEX receives full marks for its range of trading pairs and a bonus point for the different options of settlement markets available.
BaseFEX offers a competitive fee structure across its trading pairs, with a volume-based tier of Maker and Taker fees shown below. Makers (those providing liquidity) receive a rebate on their fee from the BTC pairs and pay no fees on Altcoin pairs.
These are substantially lower rates than the average industry fee of 0.2%, while also cheaper than the standard taker fees of 0.07% at Bitmex and higher than the 0.04% standard taker fee charged over at Binance.
We give BaseFEX full marks for this metric as their fees across the board are impressive and lower than the industry average.
We take a look at the security metrics for the BaseFEX exchange. Although we aim to cover a range of parameters, no cryptocurrency exchange is 100% secure, and users are encouraged to only store funds on exchanges when trading.
We run all the exchange-websites in Mozilla’s Observatory-test (https://observatory.mozilla.org/). The score in this test is one of many indicators of the exchange’s security.
BaseFEX received a score of B in this test. Upon reviewing their previous results, we can see they have scored A+ twice in tests since launch. The team had advised us that they are looking into this as a priority to bring the score back to an A+.
As for any exchange website, users should always verify the SSL certificate on the site before registering. We can see that BaseFEX has a full SSL certificate issued by COMODO ECC.
There is a Whitelisting process available for users on BaseFEX to secure their device, meaning any subsequent login attempts from an alternative device will require approval via email before logging in.
There is also a verification process for changing an email address which involves users having to enter a verification code from the new and old email to update the email address on the account. Verification codes are valid for 15 minutes only, giving users time to contact the exchange in the event they notice any irregularity.
We award two marks for this metric, with a recommendation for BaseFEX to allow whitelisting of withdrawal addresses for the user.
There is 2FA available on the exchange; however, users don’t need to set this up to log in or trade on the platform. We strongly recommend that all exchanges implement mandatory 2FA following registration.
Currently, the only 2FA option is Google Authenticator, we can recommend offering an SMS or email option also or a combination of the three and also making 2FA mandatory immediately following registration.
There is also an anti-phishing code which helps users identify whether the received email comes from the genuine BaseFEX email account.
A nice feature and we would like to see this as a standard across all exchanges, and we reward BaseFEX with a bonus point for this feature giving an overall score of 2 for this metric.
BaseFEX pride themselves as being a secure exchange with no history of theft from the exchange. A quick google search shows no recorded incidents of theft or hacks on the exchange.
There is a section on the website dedicated to security; however, little or no information is given to users on how to securely send or store funds. We look at Binance as the benchmark for this with its security guides and recommend other exchanges provide a similar guide to ensure their users remain safe.
A recent update from the exchange means that users are prompted to change their password regularly, which is a nice feature and again ensures that users are reminded of the need for secure and unique passwords on each exchange.
We recommend this as a standard feature on all exchanges to protect users and encourage using unique passwords for each exchange. For the rigorous and impressive safety measures, we award full marks for this metric.
We can not find any record of a public security audit of the BaseFEX exchange, which is not uncommon for exchanges. The BaseFEX team state on the website that there are periodic stress tests and security audits once a month to keep up to date with new potential vulnerabilities on the platform.
We always recommend that all exchanges follow this practice and inform users that a third party has audited the exchange. Users may assume this is standard practice, but the number of exchange hacks would indicate otherwise.
We score the exchange 2 for this metric with BaseFEX missing out on a bonus point. We would like to see them mention if the audits are internal, external or ideally a combination of both.
The website states that all assets on BaseFEX are stored in multi-sig cold wallets only. All BaseFEX addresses are multi-sig, and all fund storage is kept offline. This means, even in the event of a system compromise, an attacker still will not have full access to all the required keys to steal funds.
Cold storage should be mandatory among exchanges, and if your exchange does not follow these practices, it is a recipe for disaster. Withdrawals are also processed once daily, with the website stating that every withdrawal is manually audited before sending, requiring the coordinated actions of multiple BaseFEX employees. The team currently audit and process withdrawals once per day at 07:00 UTC.
We also recommend that BaseFEX provide a user guide to highlight their plans in case users are unable to log in or the exchange is compromised. We have never come across an exchange which tells its users what the procedures are in case of a hack.
As BaseFEX is a centralised exchange, users do not control their private keys, and as such, all funds deposited on the exchange are in the custody of BaseFEX until withdrawn. We always recommend users that they only keep funds on exchanges when trading and withdraw funds immediately when not required.
We award two marks in this metric to the team for their effective management of user funds. The bonus mark in this metric is reserved for decentralised exchanges only where users are in control of their funds at all times.
We take a look at the legal metrics for the exchange; however, we remind all users to undertake their due diligence before registering, depositing and trading at any exchange. Your funds are at risk while held on any exchange.
One of the main features highlighted by BaseFEX is their no KYC policy, stating that users can trade on the exchange without any verification required when depositing, trading or withdrawing funds.
It is important to note that the BaseFEX terms and conditions state the following:
After discussion with the BaseFEX team, they advised us that these T&C are outdated and they will be updated to reflect their promise of not requesting KYC for its customers.
Users are reminded that no KYC exchanges still have their restrictions, as highlighted above. We recommend that users always digest the exchanges T&C before deciding to use their platform.
We could not find any details of any compliance policy or the compliance officer on the team. We recommend that all exchanges give an outline of their compliance policy before a user depositing funds into the account. This should be in conjunction with providing the contact details of the compliance officer on the website or LinkedIn profile.
We award a score of 1 based on this metric based on the fact that non-KYC exchanges have their appeal amongst a particular crowd of traders, mainly those from restricted countries such as the US. Our concern for users using a non-KYC exchange is that they may fall foul of the terms and conditions listed and if they are a user from a restricted country they are liable to account termination or even possible loss of funds.
Volumes are the best metric to use when measuring liquidity and activity at exchanges. From a glance at the trading volumes on all its pairs, it’s clear to see that BaseFEX have much lower traded volumes than its competitors. High volume and liquidity are essential for the markets on derivatives exchanges to function efficiently with little or no slippage.
We recommend that raising trading volumes are the number 1 priority for the BaseFEX team. We also encourage exchanges to register with metrics sites such as Nomics so trading volumes can be independently verified.
There is no information available to verify the trading volumes listed on BaseFEX, and as such we score this metric as a 0.
Naturally being a futures and derivatives exchange, means that there are restrictions on users from the United States, Canada, China and the usual suspects Iran, North Korea, Syria and Cuba with the policy listed on their website.
In this case restrictions on users from the above countries is a positive, especially from the US, meaning that BaseFEX is not liable to US regulation or breaking sanctions. As such, we award a score of 2 for this metric.
We could not find any option to download trade history as a CSV file, and we highly recommend that BaseFEX implement this to support users for accounting purposes. Although users can copy and paste their trading history into a spreadsheet, we recommend that all exchanges allow download of their trade history as a mandatory feature
We, therefore, score a zero on this section as trade accounting is crucial for traders to access this information quickly to assess returns or losses for tax processing purposes.
There is a listed insurance fund on the website, where BaseFEX uses the Insurance Fund to take over users unfilled positions before they are taken over by the Auto-Deleveraging System. The Insurance Fund comes from liquidations executed with a price better than the bankruptcy price of that position.
Users have very little recourse in the event their funds are lost either at regulated or non-regulated exchanges. It is often up to the exchange to decide if they return your funds in case of a hack, downtime or mismanagement.
The one exchange that leads the way in this is Binance with the Secure Asset Fund for Users or SAFU. This ensures that a portion of exchange funds are ringfenced in the case of an exchange hack. Users are reimbursed via the SAFU, ensuring that the exchange is not making the customer liable for its losses.
There is not currently a SAFU fund listed for BaseFEX outside of its insurance fund. We recommend exchanges list if they have a Secure Asset Fund for Users (SAFU) in case of exchange hacks. We also are unable to award a bonus point as BaseFEX is an unregulated exchange.
We take a look at the community engagement for the exchange, often one of the most overlooked criteria when deciding on whether to use an exchange or not. Customer support is essential to users, along with regular communication on developments.
The main method of communication for the project seems to be Twitter, Weibo and the blog on the website.
There is no Discord or Telegram channel, which is recommended as it allows two-way communication. We also recommend that BaseFEX develop a Youtube channel to provide user guides on using the exchange, support etc.
According to RivalIQ, the average Twitter engagement on the BaseFEX account is 7.5 per tweet, which is 0.17% of its total 4418 follower audience.
At a rate of 7.5 engagement total per tweet, this is just under the average engagement rate across all industries. The engagement rate per tweet is over three times the industry average.
We can recommend that BaseFEX improve their engagement with their community with a dedicated social media content creator to engage its large following of just under 5000 followers.
The website provides suitable information about BaseFEX along with their products; however we would like to see a little more information around the team for transparency.
The website is secured via HTTPS; however, it is not GDPR compliant, and the domain details are not public. The site and platform are multilingual in several languages including English, Mandarin, Korean, Japanese and Russian. We score two marks for BaseFEX here, but we would like to see the GDPR compliance installed for European users.
There are several options for user support with a Live Chat and email available for users between the hours of 8 am and 11 pm UTC, with a target response time of 1 hour. This conflicts slight with their 24/7 support mentioned on the website, but the hours mentioned above may be applicable to live support only.
The team have advised that support is multilingual; however, there is no information offered on which languages are supported.
We also recommend that as the exchange grows, they provide dedicated 24/7 support and also a dedicated channel for security issues. The level of customer service shown by an exchange when dealing with a customer whose account is compromised can often make a vital difference in securing funds.
We take a look at the trading experience for the exchange; however, we remind all users to undertake their due diligence before registering, depositing and trading at any exchange. Users have little or no legal recourse in the event of funds lost on exchanges through mismanagement.
Creating a BaseFEX Account
Getting setup with a BaseFEX account is easy and takes less than a few minutes. BaseFEX doesn’t require any KYC verification so its a relatively simple signup process.
BaseFEX Sign Up
To register for a BaseFEX account, head over to the registration page here.
BaseFEX provides just one method of registration for an account via email. When registering for an exchange, we always recommend using a dedicated email address and 2FA device along with a unique password.
You can log in to your BaseFEX account 24/7 by going to login, and entering your details securely.
Before ever logging into your favourite exchange, we always recommend that you double-check the URL and HTTPS certificate to confirm it is indeed your exchange that you are logging into and not a phishing site.
If users have activated 2FA, they will be prompted to enter this at login and be logged into their account.
Users receive email or text notifications when a login is made on your account, and a nice feature as users can be alerted immediately if their account is compromised.
The UI is relatively simple and easy to use, displaying information available to users on their trading screen such as their balances, open positions, available margin and information about the trading pair on screen.
The chart and trading UI are relatively easy to navigate, along with the account and settings section. All links work at the time of review.
The charts on the exchange are powered by Trading View, and users can add indicators; however there does not seem to be an option to add tools such as lines or Fibonacci to the chart. We recommend that BaseFEX implement this to ensure users feel comfortable charting directly on the exchange.
The trading interface does not allow customisation, which is the norm across most exchanges, and there are very few exchanges that score a bonus point for this feature. We recommend that exchanges allow this where possible to promote adoption amongst users.
There are depth books for all pairs; however, there is no zoom feature to scan the order books in more detail. We recommend BaseFEX implement such a feature to allow users to get more insight into the order book depth.
The UX for the exchange is pleasant, and users can register instantly, provided with a detailed overview of their account on their dashboard and ready to start trading immediately. There is a nice feel to the user journey and support guides available to explain all the features on the exchange.
There is a demo platform for users to get used to the trading interface which merits a bonus point and is a recommended way for users to get used to a platform being trading with live funds. We suggest that this becomes a norm amongst all exchanges, especially those offering leveraged and margin trading.
There is also a mobile App available for users on both Android and iOS, and we award a bonus point for this as it allows traders to manage their account on the go.
The withdrawal fees at BaseFEX are 0.0005 BTC, which is lower than the global industry average withdrawal fee of 0.000812 BTC and the cost for USDT withdrawal is 2 USDT.
Withdrawals are processed once a day, and although this may cause an inconvenience to users, they can be reassured that the team are undertaking due diligence when handling customer funds.
There is a generous referral programme in place at BaseFEX, with users earning 3t% of trading fees from their affiliated users. This is three times higher than the referral fees at Bitmex and one of the highest in the industry. As a bonus, those who sign up via a valid referral link will also receive a 10% discount on their trading fees for the first six months.
We award full marks for this section and always advise users who register for exchanges to register via an affiliate link. This is because it provides incentives for the exchanges to keep their referrals rates high, competitive and beneficial for both users.
In summary, the BaseFEX exchange scored 63/100 based on our scoring matrix, and we score the project at a B rating.
We have outlined our SWOT analysis below to provide you with a breakdown on the exchange. For a more detailed scoring breakdown on each metric, please scroll down to our Matrix table.
Our scoring matrix below indicates areas of strengths and weaknesses, and as part of the review, we sent BaseFEX our recommendations for improvements alongside suggestions for additional features.
Overall the exchange has had an impressive start from its launch in 2018 and with a few improvements over time, it is possible to see the exchange improve score and rating.
This review is for educational/informative purposes only.
You should not construe any such information from this review as any legal, investment or financial advice.
We use a combined rating score out of 100, covering all the listed metrics for project reviews. Each parameter is rated out of 3, including a potential bonus point in every metric.
We also reserve the right to award a bonus point for outstanding achievement for a project. Our rating methodology is listed here.
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