Key takeaways
Symbols are used to identify projects. This is a unique combination of letters that you see everywhere in your crypto trading apps.
Traders should exercise caution to avoid scams or very low-cap projects using the same or similar symbols as legitimate projects.
It is essential to verify the contract address and all project information relating to the assets you wish to trade, deposit or withdraw.
Which is which? Learn how to identify the correct symbol with this comprehensive guide.
Appearing in the 19th century to speed up trading transactions, symbols are a unique combination of letters that you see all over your crypto trading apps. Among the most common are BTC (Bitcoin), ETH (Ethereum), and BNB (Binance Coin). These abbreviations play a crucial role in helping traders identify and differentiate assets.
Unlike traditional markets, it is common in the crypto world for the same symbol to be present in several projects. This situation may be the result of simple coincidence or, in some cases, malicious intent. Traders, especially users of a decentralized exchange (DEX), should exercise caution to avoid scams or very low-cap projects using the same or similar symbols as legitimate projects.
In this guide, we will discover how to accurately identify crypto symbols before making trades, deposits or withdrawals.
Always do your own research
Regardless of the type of exchange you use, it is essential to verify the contract address and all project information relating to the assets you wish to trade. The importance of doing your own research (DYOR) cannot be overemphasized. This is indeed an essential protection against potential scams or projects whose symbols are deliberately misleading.
Here are some tips you should keep in mind.
1. Token contract address
The contract address is a unique identifier that refers to the location of a token's smart contract, a piece of code stored on the blockchain that executes functionality, such as deposits or withdrawals, when predetermined conditions are met .
This is what the contract address of the BNB token (ERC-20) looks like:
This information can be found on community forums, on your repository page, or on trusted block explorers.
2. Native tokens
It should be noted that some tokens are integrated directly into a blockchain. These tokens are called “native tokens”. Take the example of BNB.
Let’s say you deposit BNB via BNB Smart Chain (BSC). There will be no contract address because everything the token needs to function is programmed into its underlying network (BSC) and not a separate smart contract.
Conversely, a smart contract and token contract address will typically be required for depositing BNB through a different network like Ethereum.
3. Reference Check
Take the time to familiarize yourself with the project website, the whitepaper, tokenomics and the various social networks. These resources contain valuable information about the project’s goals, team members, roadmap, and legitimacy. Remember to validate information with multiple reliable sources. Here are some signals that should alert you:
A majority of tokens held in a few wallets;
An unclear or ambiguous whitepaper;
An anonymous team with no references;
A bad reputation on social networks (accusations of fraud);
Hidden source code.
Before making a deposit or withdrawal
To ensure a smooth and secure transaction, take precautions such as sending a test transaction, verifying the contract address, and checking blockchain compatibility. If you experience any issues such as incorrect deposit or missing funds, please review the guides in our FAQ:
How do I recover funds that never arrived with Self-Service Recovery?
How to recover a crypto deposit with incorrect or missing label/note?
Why was my deposit not credited?
1. Send a test transaction
Transferring cryptos is more complicated than traditional banking or payment activities. To verify the destination address, it is advisable to send a small amount, which you are willing to lose, before making a deposit or withdrawal.
2. Check the token contract address
As with trading, you should also check the token contract address supported by the respective platforms involved before making a deposit or withdrawal. On Binance, you can find this information in the contract information section of your deposit page. By ensuring the token contract address is correct, you avoid mishaps such as sending funds to the wrong destination.
Contract information in the Binance app
Contract information in the desktop version of Binance
3. Check the blockchain network supporting the transaction
The same token with identical blockchain symbols and addresses can be present on multiple networks. For example, BNB is present on both BSC and the Ethereum network. However, the two versions are separate entities despite sharing the same name.
To illustrate this, let's say you send BNB via BSC to a wallet that does not support BRC-20 transfers. The receiving platform may not credit your deposit and a recovery service may be required for you to recover your funds.
To ensure the success of the transaction, check whether the receiving platform supports the blockchain network associated with the token you intend to deposit or withdraw. If you do not take into account the compatibility of the blockchain network, you risk sending the tokens to the wrong address or encountering technical difficulties during the transaction process.
Tip: Binance users can visit our official Deposit & Withdrawal Status page to see the real-time status of all cryptos and networks supported on the Binance platform.
4. Beware of token gateways
If you are using a token gateway for transfer simplicity, please note that some centralized exchanges do not support token gateway transfers. Take a closer look at the token contract address and check if it is supported by the destination platform before continuing.
Keep in mind that sending tokens from a gateway smart contract can be interpreted as a smart contract deposit. In this example, our system (Binance) may not credit the deposit to your account and you may need to file an appeal manually.
Tip: Transfer tokens sent via a gateway to your personal wallet before sending them as a standard blockchain transaction to the destination Binance wallet. And remember: always start with a test transaction.
How to identify the correct token using a block explorer?
As of May 2023, there are approximately 24,073 cryptocurrencies on CoinMarketCap. Every week, new projects are launched, whether they are genuine or deceptive projects or outright scams. To help you navigate the crypto space, we've given the example of two real-world projects (one is genuine, the other is from a spoofer) and explained how you can tell them apart apart from the logo and the name.
How do you know if you've come across the wrong "USDT"?
At first glance, this listing appears to be in USDT. Browse the “Overview” and “Market” sections. The numbers don't add up: total supply of $20 billion, 2,161 holders, $0 capitalization and no information on circulating supply.
How do you know if you've come across the right USDT?
Here is the USDT block explorer page which is listed on Binance. Looking more closely at the figures, we see that there are more than 4 million holders, 185 million transfers and a total supply of $36 billion.
Compared to previous examples, these numbers make sense, given that USDT is the largest stablecoin by capitalization. In addition, the “Market” section contains clear information regarding capitalization and circulating supply.
Finally, you should also take the trouble to conduct additional research and verify all of the above information with other trustworthy blockchain explorers.
Some remarks on BSC and DeFi
Keep in mind that Binance has no control over projects based on open-source (decentralized) networks like BSC. Projects on BSC are community projects, meaning that all governance-related decisions are made by their respective communities.
Our listing team is only responsible for verifying the tokens listed on the official Binance exchange. We do not intervene with respect to projects listed on BSC-based DEXs. The advantages offered by DeFi allow anyone to deploy not only legitimate projects but also illicit tokens designed to deceive investors.
Both centralization and decentralization have their advantages and disadvantages. Generally speaking, you should first arm yourself with the necessary knowledge about cryptos before you start exploring DeFi.
Safe trading
The next time you have doubts about a token, be sure to follow this guide and exercise caution before making a trade, deposit or withdrawal. By following these steps, you will be able to make informed decisions and avoid common pitfalls that could have destructive effects on your crypto funds.
For more information
Everything you need to know about blockchain and cryptos: a beginner's guide
Binance Provides Traders with Essential Insights
Stay Safe: Spot Account Takeover Attempts
Trade anywhere with the Binance mobile crypto trading app (iOS/Android)
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