At least 74 cryptocurrency exchanges have their own native coin, each with unique features and applications. But, let’s face it, you don’t have the time to go over six dozen tokens in detail, but I do. So I put up a study report that considers five important factors:
Market capitalization, circulating supply vs total supply, trading incentives such as lower costs, exclusive access to launch pads or crypto startup initiatives, and non-crypto partner perks. This will assist you in determining which coin is the best for you.
Exchange Token 1
So, let’s begin with the traditional BNB. The Binance Smart Chain’s native token, BNB, offers a wide range of applications. Holding the BNB token will help you save up to 25% on trading costs and gain access to their launchpad, which has aided in the creation of some crypto giants. Some of their launchpad initiatives are shown below.
If you’re unfamiliar with a launchpad, think of it as a crypto business incubator where you can acquire tokens before they’re released to the general public. The tokenomics of BNB are shown below.
As you can see, 50% of the funds went to the ICO, 40% to the team, and 10% to angel investors. A total of 200 million tokens were available at the outset. Binance, on the other hand, invests 20% of its revenues on buying back and burning tokens and plans to do so until they have purchased 50% of the total supply.
This is a pretty regular occurrence in the cryptocurrency exchange token space. BNB is one of those tokens that I feel will last a long time simply because there are now too many components in the crypto ecosystem that are depending on this currency and ecosystem.
Exchange Token 2
Now let’s look at a very little token, the Bibox exchange’s BIX token. Don’t worry if you haven’t heard about this one yet. With a total quantity of 500 million BIX tokens, this is a coin with a relatively low market cap. Currently, only 36% of the circulating supply is in circulation, with the team retaining 35% of it.
Bibox has also said that it will buy back and burn up to 300 million tokens from its initial supply. Of course, this will assist to raise the price in the future. The BIX token saw a big climb in April of this year, hitting a market worth of $32 million before plummeting to its present prices.
Bibox appears to be having difficulty competing with some of the larger international exchanges, which I can only think is a difficult task when competing against Giants with billions of dollars in liquidity. The fact that Fiat money is not now supported is currently holding the exchange down.
So, if you want to buy crypto with your dollars, you’ll have to go to a different exchange and then transfer the assets into your Bibox account. Many folks just do not wish to do so. It also doesn’t help that, in comparison to certain rivals, there aren’t as many coins accessible to acquire on the platform. As I previously stated, this is a smaller option on the list.
Exchange Token 3
Next, we’ll discuss Bitpanda’s BEST Token. By the way, that’s the name of the token. It’s not me who says it’s the best. This is another relatively new exchange that offers additional benefits to European investors. The BEST token has increased in value by nearly 5X since the beginning of the year. It has a moderate market value and a 36 percent circulating supply.
This is because the team has a consistent release schedule in place to assist control price fluctuation. Bitpanda, like Bibox, has a mechanism that burns around 25% of the fees paid in BEST on the exchange every quarter.
They want to continue doing so until they have consumed half of the overall supply. You’ll see that most of these exchanges have a burn limit of half of the total supply on their token, and you might be asking why. So, allow me to clarify.
Because an exchange token is used to help fund the development of the exchange, buying back tokens is a mechanism for them to repay holders. Furthermore, burning tokens rather than paying a dividend or receiving cash help to avoid paying further taxes because the price of the token will rise as supply decreases as long as demand stays constant.
The benefit of doing it this way is that holder don’t have to pay tax until they sell, thus the price of the token will rise. They don’t have to pay tax on it until they sell it, which is when capital gains are realized, and then you pay your taxes. One of the most interesting aspects of Bitpanda’s story is its history of private financing.
Peter Thiel’s Valar Ventures sponsored one noteworthy financing effort, and the exchange is currently valued at over $4 billion as a result. The integration inside Europe is now what has made Bitpanda so successful for crypto. As long as you stay inside Eurozone’s, there are no transaction costs.
What are Deflationary Tokens
Now, let’s speak about deflationary coins for a moment. Long-term, this is perhaps what most cryptos want to be. Deflationary coins or tokens diminish their supply by burning them in a methodical manner. If you’re wondering what happens when a coin is burnt, it often means the coins are moved to a wallet that no one can access, thereby removing the money from circulation.
When you look at the white papers of most new projects, you’ll see that token burns are likely to be governed by regulations. This might include the burning of transaction fees, algorithmic burns, or committee-determined burns.
Exchange Token 4
The GT token from Gate.io is one such coin that has recently experienced deflation. This was made possible via a unique launch approach. As a result, they grabbed 1 billion GT tokens and distributed them as free presents to a few investors.
The remaining 300 million tokens, or around 26% of the entire supply, were subsequently bought back in a large repurchase by Gate.io. However, it appears that the aggressive burn plan is paying off. The coin is performing well this year, with a current price of $6 and a market valuation of $465,000,000.
Furthermore, there are additional advantages to owning the token. Holders are divided into VIP categories according to the amount of money they have.
The higher the tier, the higher your discount on trading fees, which is also pretty common for many of these tokens on this list. Of the 16 tiers, 16 of them had to make it pretty complicated. If you happen to be on eleven and up, you even get fees as low as negative percentages for trades, meaning you actually make a little bit of money every time that you trade.
There’s also exclusive access to Gate.io startup, which works very similar to Binance’s launchpad. Then you have perks with other dApps in the Gate ecosystem like NFT Magic Box Marketplace, access to crypto loan services, and DeFi products.
Exchange Token 5
Okay, the following coin has a one-of-a-kind way of increasing its value. This is the KCS token from Kucoin. In 2021, it, like Gate.io, becomes deflationary, with the circulating supply at slightly over 170 million KCS.
Part of the plan was to start with 200 million tokens, including lockup periods for tokens owned by the team and angel investors. Now that both lockup periods have ended, the Kucoin team’s quarterly burns are the only thing that can adjust the token supply. At least 10% of the company’s income will be used to purchase back KCS and destroy it immediately.
Now, any good exchange token would provide tangible benefits for users on the exchange as well. So like other exchanges, you can get discounted trading fees depending on how many KCS that you hold.
And it only gets better from here because Kucoin actually pays holders rewards based on the success and revenue of the platform, 50% of trading fee revenue goes to token holders. This happens for anyone who holds at least six KCS tokens.
The benefits have allowed KCS to shoot up by about 2800% in 2021. As a user of Kucoin, I am a fan of this token. However, I do have a concern that I absolutely need to express. Paying out profits from the exchange very likely could make this token of security in the eyes of the SEC, which to me adds a layer of risk that you need to consider. If this were found to be a security, this could hurt the token price.
Exchange Token 6
Next up is CRO Crypto.com’s coin, which recently entered the top 15 cryptos by market capitalization. There are a few factors that have caused its price to increase. The first is extremely aggressive marketing.
The exchange just announced a 700 million dollar contract to rebrand the Staples Center Crypto.com Arena. This makes it one of just two exchanges, the other being FTX, which has been renamed a historic sporting venue for PR reasons.
Earlier this month, the business launched a global campaign with Matt Damon to spread the word. Fortune Favors the Brave, a catchy tagline designed to entice people to sign up by using crypto FOMO.
For CRO, though, it’s more than just an awareness-based growth campaign. The exchange is also a frontrunner in allowing non-crypto shops to accept cryptocurrency as a means of payment, and you can use one of their five Visa debit cards to get up to 8% cashback on crypto purchases.
Staking is a major driver of user development on Crypto.com because they provide adjustable conditions for locking up your crypto, and the CRO token is required to use such services. The maximum supply of CRO is 100 billion, however, roughly 70 billion have already been used. In comparison to some of the other tokens on the list, tokenomics is a little more complicated.
The CRO cryptocurrency did not have a presale or an ICO, but it does include pools for launch rewards, capital reserves, and what they call network long-term incentives. And don’t worry if none of that makes sense; it’s just a new way to distribute some extra tokens in the future, each with its own release schedule.
One thing to keep in mind is that no token burning appears to be scheduled in the near future. They had that massive burn, but no plan appears to exist at this moment, so it will have to pursue a growth strategy in the interim, motivating adoption through staking incentives and, of course, reimbursing Netflix and Spotify memberships by staking the tokens.
Exchange Token 7
Let’s discuss OKB, the token from OKEx, which is the sister firm of Okcoin in the United States. This exchange has been one of the most prominent targets of China’s crypto crackdown. Every six months, they crackdown and make crypto illegal.
Despite the founders’ disappearances, which is common among Chinese businesspeople, the exchange has remained a prominent rival in the Asian market, handling up to $6 billion in daily trading. They’re also one of the world’s largest exchanges, ranking third in terms of liquidity and fourth in terms of the trading volume.
OKB, on the other hand, maybe a volatile token to own. Despite a lot of fluctuation, the token’s price has increased by nearly 4X this year. Depending on how much of the asset they own, holders might get a 40 percent reduction in trading costs.
And, similar to the Binance launchpad or Gate.io startup, OKB holders gain more of the token as a passive income through the OKEx Earn program, and this exchange has its own crop of new projects, as well as the OKEx chain, which is their private blockchain.
This allows investors to participate in a broader range of DeFi activities, like derivatives trading and other dApps, all of which are powered by the OKB token. Unlike CRO, OKB has quarterly token burning in which 30% of the quarterly revenues from transaction fees are utilized to destroy tokens.
Only 300 million OKB tokens are now in circulation, out of a total quantity of 1 billion. In 2022, 700 million OKB tokens will be released, approximately half of which will be distributed to the general public.
As a result, there are many different exchanges and tokens to consider. I realize it’s a lot, but here are my final opinions on the best options. When purchasing an exchange token, you must examine all of the benefits, the majority of which are acquired by actually utilizing the exchange.
This implies that the best exchange token for you is most likely the one that is native to the platform that you use the most, or if you use many platforms, the one that is native to the platform that you use the most.
However, not every platform is created equal. Depending on your demands, some provide significantly superior possibilities than others.