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The binding is strips of fabric that you sew together end to end, and then sew to the outer edges of the quilt in order to finish off the raw edges. This serves to protect the raw edges from damage, and creates a nice clean edge. In addition, the binding serves to visually frame the quilt.

You can learn all about quilt binding, how to make and how to attach it by reading my series of blog post/tutorials on quilt binding..