I noticed that Binance exchange created an unique address for every user to deposit ERC20 tokens. after the deposit, Binance transfer those tokens to a specific address, which is marked as "Binance"(should be the cold wallet) on etherscan. here is the address.

the whole process looks like this:

step1: user's wallet =>  user's address at Binance 
step2: user's address at Binance =>  Binance's address.

my understanding is: step2 costs gas too and Binance paid for it.
is that right? for now the gas cost for every Ethereum transaction is about 0.0011298ether.

so every deposit from user, costs Binance ether?

if there are many small deposit, then there could be a lot of gas cost on the transfer of step2.

what is the benefit of this?

is there a better way to avoid the extra cost?

1 Answer 1


Binance would pay the gas itself to collect the eth or token. It would be more secure for exchange platform todo that. Reduce the possiblity of being hacked. As for the gas pay in collecting eth or token, it's just only a very small part in his profit.

  • How is it more secure? isn't it a lot more unsecure if someone could take hold of the collected repository's wallet address private key or passphrase?
    – Sajuuk
    Commented Jul 30, 2018 at 6:33

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