Exchange-Based Token: A New Trend In Crypto

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The cryptocurrency industry is still young, and we get new developments month by month. The crypto world right now has a new feature: exchange tokens. Are they here to stay?

Cryptocurrency exchanges have become much more than just a marketplace for traders. There are platforms which go into sponsoring, there are those which develop new interesting features, and now there is another group. Many big exchanges have created their own currency – exchange-based token.

Binance Coin leads the way

Binance is probably the biggest cryptocurrency exchange in the world. It is also a platform, which has had its own coin since 2017. Back then, the platform conducted Initial Coin Offering (ICO), in which the company raised $15 million. 

Binance Coin (BNB) is built on Ethereum under the ERC-20 standard. Today, the native token of Binance is ranked as 6th cryptocurrency in the world on the coinmarketcap.com list.

Where is it useful? Customers holding BNB can use it to lower trading fees. However, that won’t last long. The lower fees will occur only for the first five years of BNB existence.

Controversies? Of course. There were rumors that Binance Coin violated KYC/AML regulations. They resolved that problem very quickly though. There were also accusations that Binance was manipulating the price of its currency.

In the beginning, the coin was worth only roughly $0,11, but now it is worth around $28. Binance Coin was the first major exchange to issue its own currency. The platform set the trend, and shortly after the creation of BNB, several more tokens were created.

Other exchanges follow the lead

Huobi (HT) did almost the same thing as Binance. Their tokens are mostly for fee discounts. Nevertheless, there are other ways to use exchange-based tokens.

Lykke, a company based in Switzerland, created its own token (LKK). What is interesting about that currency is the fact that LKK works as equity in the company behind the exchange. 100 LKK represents one share of the Lykke Corporation. It means that you become a partial owner of the company if you hodl LKK.

Bibox combined the two. Its coin, Bibox Token (BIX) lower fees and works as a share in the profits of the exchange. KuCoin Shares (KCS) are very similar to BIX.

Another interesting case is ETHFinex. The platform created Nector (NEC), which enables holders to receive 50 percent of the  trading fees of the exchange. Moreover, NEC holders are able to vote on new exchange listings.

Cobinhood’s token (COB) enables holders to take part in future ICOs on the exchange and provides a 50 percent off margin trading interest.

CoinDeal Token – a new way?

Those above have been in the industry for at least several months. Now, there is another interesting actor in the industry. CoinDeal decided to create its own token: CoinDeal Token (CDL). Why do we write about that? Mostly because this token is a little bit different.

First of all, CoinDeal gives its tokens for free. Absolutely free. We have already written a piece about it. From the pool of 50 million CDL, one of the biggest European exchanges gives 90% of all tokens. Every newly registered user will get 100 CDL (or more, it depends on a number of people registered. If there would be fewer people, every user will get more CDLs).

Of course, giving away free tokens isn’t a charity. The exchange wants to attract more crypto enthusiasts to its platform. Right now, CoinDeal has already over 320,000 users across the whole world, but after the distribution of tokens, the exchange plans to have at least 450,000 users.

However, there is no catch in that. It is a win-win situation. You get free tokens, and the exchange gets a new user. While CDL was created to lower the fees (if you stack enough of them, maker fee will be equal 0% and a taker fee will equal 0,025%), and give the fast pass priority, tokens will also be on the open market.

The market for CDL will be created as soon as CoinDeal distributes all of 45 mln tokens. So, how much will be CoinDeal Token worth? That is, at least for now, only speculation. We don’t know what 1 CoinDeal Token price will be. Maybe CoinDeal Token will be worth about $1, or perhaps $10.

Native exchange tokens are the new hot trend in the cryptocurrency world. What do you think about it? Is it something that will survive and become a new direction for the industry? Or is it maybe just a fad? Let us know what you think.

Most notable examples of an exchange token

EXCHANGE NAMETOKEN TICKETEXHCANGE’S 24H TRADING VOLUMETOKEN’S MARKET CAPCIRCULATING SUPPLYPRICE FOR 1 TOKEN
BinanceBNB$1 777 109 631$4 771 790 790155 536 713 BNB$30.68
HuobiHT$1 098 160 450$253 466 37350 000 200 HT$5.07
BiboxBIX$1 005 717 182$32 756 028108 417 395 BIX$0.302
CoinDealCDL$11 656 383$350 000-$307 500 000*50 000 000 CDL$0.007-$6.15*
ETHFinexNEC$2 108 411$5 754 51282 353 022 NEC$0.070
LykkeLKK$305 507$3 548 373316 809 739 LKK$0.011
CobinhoodCOB$31 011$926 865410 999 847 COB$0.002

All data taken from coinmarketcap.com, 2:30 pm (UTC +01:00:00)
* Estimate based on comparison of other coins circulating supply, exchanges turnovers and market caps.

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