Cryptocurrency exchanges are the focal point of the entire industry, providing both retail and institutional investors a simple way to buy and sell digital assets.
Both centralized and decentralized exchanges often have a token associated with their platforms that offers incentives to both short-term traders and long-term investors. The value of these tokens is usually tied directly to exchange activity, including transaction volume and amount. This means that by purchasing exchange tokens, investors are able to benefit directly from the adoption of the respective exchange.
Binance Coin (BNB) | $14.85 | $1.42 Billion Market Cap
Until further notice, Binance is king. It is undoubtedly the most popular, and most innovative, cryptocurrency exchange in the industry. This is due in large part to their tendency to re-invest its earnings and its meticulous coin listing process.
Binance Coin offers investors a number of incentives, including reduced trading and withdrawal fees. Notably, every quarter, Binance uses 20% of its profits to buy back BNB and destroy them, until 50% of all the BNB (100MM) removed from circulation. This ultimately works to promote long-term value, similar to the effect seen after share buybacks in traditional markets.
0x is an open protocol that facilitates low friction peer-to-peer exchange of ERC20 tokens on the Ethereum blockchain. The 0x Protocol is aiming to become a common infrastructure for decentralized applications (DApps), enabling them to access large public liquidity pools or even create their own.
This system of available liquidity allows 0x to take the concept of a decentralized exchange a step further, as traditional DEXs are illiquid, slow, expensive, and inoperable with one another.
Notably, Coinbase recently announced it is currently exploring adding 0x to its trading platforms, adding significant upside to the token value. (more)
KuCoin Shares (KCS) | $2.77 | $251 Million Market Cap
KuCoin, a Singapore-based cryptocurrency exchange, is well-known for offering a variety of newly listed altcoins before many other exchanges. KuCoin has over 140 altcoin listings on its platform, including DragonChain (DRGN), OmiseGO (OMG), Cappasity (CAPP), Civic (CVC), DeepBrainChain (DBC), Qtum (QTUM) and TenX (TENX).
KuCoin Shares holders are privy to a number of passive income opportunities, including a daily rewards program that pays out 50% of all platform transaction fees. KuCoin also recently announced that users may now invite their friends to join the exchange and receive up to 20% referral bonus each an invitee completes an order. (more)
Trade Token (TIO) | $0.3088 | $27.8 Million Market Cap
Trade.io’s platform boasts a unique liquidity sharing system where TIO holders can contribute a selected amount of the assets contained within their wallets to a shared, P2P liquidity pool in return for 50% of the daily revenues generated by trade.io. To kickstart this liquidity system, trade.io has seeded the pool with approximately $50 million cash.
COBINHOOD is a zero-free trading platform that features a number of unique features and a wide variety of trading pairs. COB Token is a small cap exchange token that offers a number of incentives to investors, including the ability to get future ICO tokens COBINHOOD underwrites at significantly lower rates and reduced platform trading fees.
COBINHOOD recently launched a beta for its new margin trading system on July 13. Margin trading was kicked off allowing up to 3x leverage and three trading pairs: BTC/USDT, ETH/USDT and COB/ETH. Additionally, COBINHOOD revealed that starting on July 20, investors are now able to fund their accounts with USD and utilize a number of fiat trading pairs. (more)
Exchange tokens often offer investors a number of incentives for either short-term use or long-term holding. While there is seemingly an endless number of exchanges, the five above offer interesting opportunities for investors looking to bet on the next wave of mass adoption.
Related: AltDex Exchange Token Index
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.