Cryptocurrency exchange tokens – Can it be profitable

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Cryptocurrency Exchange Tokens – How Do They Work, and Can They Be Profitable?

You have certainly used cryptocurrency exchanges before, as cryptocurrency trading would not be possible without them. But have you ever heard about their tokens? Binance, for example, one of the largest stock exchanges, has its Binance coin.

But what are these tokens for? Are they just another useless way of using cryptocurrencies?

The Basic Principle of Cryptocurrency Exchange Tokens

The cryptocurrency exchange tokens act as so-called utility tokens or service tokens. They possess certain features and they are used as payment for respective services or products. However, they also play the role of security tokens (security in relation to the importance of stock shares, not safety), which we hold so we could speculate on the growth of their value.

The tokens serve primarily to build the loyalty of traders to a certain exchange, its promotion and for the participation of token holders in some of the company’s decisions. As another feature of stock exchange tokens, a reduction in transaction fee should be mentioned, for it is probably their main advantage. Now, let’s take a look at fees and charges required by some stock exchanges.

At this point, we’re going to pause for a moment and focus on the token launched by Binance.

The Binance Coin (BNB)

In addition to the aforementioned reduction in fees, Binance Coin has several interesting features and functions. You can find all its features here.

Furthermore, it is one of the few coins that already has real and practical use and transparently shows where its value comes from. Binance has been launched in 2020, and in just one year it has gained over 10 million users. In 2020, Binance earned half a billion dollars, which is pretty decent growth, don’t you think?

As Binance continues to grow, we can also expect the valorization of BNB, which has grown from $ 0.11 up to $ 24.90 on January 12, 2020. That is 226 times the value of ICO. Of course, this token did not avoid the bear market of 2020 and the price fell down, but not as drastically as other cryptocurrencies. The decrease was “only” about 75%.

Another factor affecting the BNB price is the fact that every three months Binance buys some of its tokens back and burns them. This ongoing reduction of the available amount of coins should remove 100 million coins in the future, which of course means a further increase in its price.

However, the number of BNB coins is not the only thing that will be different in the future. Unfortunately, the transaction fee discount will be reduced during four yearly waves, with the fee first decreased to 25%, then to 12.5%, then to 6.25% and finally, the discount feature will no longer be available. Still, the traders are offered decent opportunities for at least the first few years.

Other Existing Stock Tokens

For comparison, we shall now describe the properties of a few more selected tokens to show you whether they are worth using or if it is worth investing in them.

In January 2020, the Huobi Token was created by the Huobi Stock Exchange, which also allows you to reduce transaction fees. The stumbling block, however, is that in order to get a rebate, you have to pay a monthly fee of 120 HT for a 10% reduction up to 12,000 HT for 50% reduction. The HT price at the time of writing this article is $ 1.23.

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Compared to BNB, where you immediately get a 50% discount on the transaction fee until you possess enough coins to pay the remaining half of the transaction fee, HT is disadvantageous.

Commission System

Another very interesting model was chosen by the ABCC Exchange with its AT token, which runs on a classic Ethereum blockchain as the ERC-20 Token.

In addition to voting on stock exchange changes, its holders may receive a regular daily remuneration (similar to dividends paid to shareholders).

ABCC distributes 80% of its profit in the form of USDT, BTC, and ETH amongst the ABCC token holders. The amount of remuneration depends on the number of ATs. They are to be considered as some sort of “shares” of this stock exchange, and in this particular case, the token very well combined its utility and security function. We have gotten into more detail about the distribution of rewards in our ABCC Exchange Review.

Is It Worth Investing in Cryptocurrency Exchange Tokens?

In the comparison of exchange tokens with other “classical” coins, it is important to realize that while in the case of other coins we often wait for the result of their in whitepaper outlined project and hope that it will eventually work (and that it is not a scam), that is after their ICO’s announcement, in the case of exchange tokens the strength of the exchange supports the project, and they often have practical use since from the very beginning (you need to be vigilant, of course, as many stock exchanges have made mistakes).

Also, be aware of suspiciously profitable tokens, such as the infamous BitConnect.

At the moment we are facing bear market and trading volume on stock exchanges is not as bulky as it was at the end of 2020. Cryptocurrency stock tokens, as well as the entire market, suffered a loss, but you can be sure that when the market turns around, the trading volume will grow, and the prices of tokens will increase. Of course, you should always have your portfolio distributed to other projects.

Author

More about the author J. Pro

Unlike Stephen (the other author) I have been thinking mainly about online business lately. I wasn’t very successfull with dropshipping on Amazon and other ways of making money online, and I’d only earn a few hundreds of dollars in years. But then binary options caught my attention with it’s simplicity. Now I’m glad it did because it really is worth it. More posts by this author

5 Best Exchange Coins & Tokens in the Crypto world (2020)

CoinSutra » Exchanges » 5 Best Exchange Coins & Tokens in the Crypto world (2020)

  • Do you like earning regular dividends as passive income?
  • Do you like holding good crypto coins?

If your answer is affirmative, we have similar strategies to make money in the cryptosphere. And if you are not aware of these strategies, don’t worry. You can learn them today by reading this article.

The strategy is simple – identify good coins that reward you in one way or another for holding them. And believe me, with the evolving cryptosphere, the opportunities to earn dividends via passive income are also increasing.

One such strategy is to identify crypto exchanges that have native coins and offer certain dividends and fee reductions to its users for holding their native coins. Especially in 2020, IEO (Initial exchange offering) is fueling this growth of exchange tokens and they are becoming a gold mine.

As of 2020, these are the most popular exchange tokens:

For now, I will list some crypto exchange coins that offer dividends and reduced fees.

Best Crypto Exchange Coins For Bonuses Or Lower Transaction Fees

1. BNB

BNB aka Binance token is a native coin of Binance exchange, also an ERC20 token, with a fixed supply of 200 million. Out of this, 100 million BNB tokens were distributed during the ICO last year.

In case you didn’t know, Binance is the best cryptocurrency exchange in the market as of now. To know more about Binance, read this exclusive guide.

You can use BNB to pay any fee on the platform, including, but not limited to:

  • Exchange Fees
  • Withdrawal fees
  • Listing Fees
  • Any other fee applicable

Apart from this, when you use BNB to pay for exchange fees, you will receive a significant discount according to the chart below. You can see their fee structure in detail here.

Last, but not least, the token economics of BNB is set in a way that not only you will receive exchange fees reduction, but the net worth of your tokens will keep increasing with time because Binance will buyback 20% BNB tokens every quarter and burn them until the total supply reaches 100 million.

This will naturally drive up the price of BNB tokens. You can learn more about BNB token in our Binance exchange review here.

Disclosure: I bought BNB tokens at $12 a few months ago. Today they are valued well above $15 per coin.

2. BTMX token

BitMax seems to be another upcoming exchange which is following the suit of Binance exchange. The native token of Bitmax (BTMX) offers many great rewards and features. An ERC20 based token which has a limit of 10 billion BTMX. One highlight of Bitmax exchange is; you should be able to buy other exchange tokens on Bitmax. This is something unique and made it worth exploring BTMX from investment perspective.

Features of BTMX token:

  • Pay dividents for users who lock BTMX token
  • Participate in IEO (Bitmax Launchpad)
  • Trans-fee mining: When a user pay transaction fees for a trade, the platform incentivize in BTMX token. The platform deducts trade transaction fees from traders and then credits their account with BTMX tokens of the same value

Here is the allocation plan for BTMX token:

  • 49% of total issuance is set aside for pre-distribution (5% – early supporters, 4% – strategic partner, 12% – team and platform, 18% – Foundation, 9% – private sales, 1% – marketing and operating)
  • 51% would be released and distributed to incentivize users daily to participate in transaction mining, total BTMX in circulation = daily mining production of BTMX / 51.
  • 10% of the private sale portion (which is 9% of total issuance) would be released prior to the rest of 49%, hence it is designated as a pre-release amount (0.9% of total issuance).

Pre-distribution Token Unlocking Mechanism:

  • Unlocking Mechanism: The number of tokens distributed as part of pre-distribution (49% of total issuance) would be unlocked daily according to the ratio of 49:51 where 51 refers to the day’s mining production output
  • Unlocking Priority: The 10% in the private sales portion (Pre-release) would be first prioritised for preferential unlocking. The rest of the pre-distribution tokens will afterward be subject to the Unlocking Mechanism as described above on the pro-rata base.

3. KCS

KCS is the native token of the well-known KuCoin exchange and is quite similar to Binance’s BNB.

KCS aka KuCoin Shares is an ERC20 token, 100 million of which were distributed in the ICO last year.

You can see the reward ratio of holding KuCoin Share tokens below.

Understandably, holding KuCoin Shares is a win-win situation in both the conditions if you are HODLer or trader.

Also, similar to Binance, 10% of their profits will be used in buying back KCS and burning them so that the holders of KCS are rewarded more as a result of the appreciating price.

4. Bibox

Bibox is an exchange similar to Binance and has a native token called BIX.

The BIX tokens can be used for paying various fees on the platform and the holders of BIX tokens are rewarded with a fee reduction as per the chart below.

Another incentive associated with the BIX is that these tokens will be bought back regularly and burnt until the final supply reaches 200 million, creating an economic incentive for the holders.

Total supply: 264,480,790

Lockup feature:

This feature will let you earn a part of trading fees if you lock up your BIX token for a certain period. See the screenshot below to learn how to lock BIX token and earn incentives:

You also have an option to unlock your token anytime which prevents you from market manipulation.

In June 2020, Bibox announced Bibox Ambassador Global Recruitment which adds more value to BIX token holders. You can read about it here.

5. COSS

COSS is another ERC20 token, which is also the native currency of COSS exchange.

COSS is also an exchange like Binance and KuCoin, with similar features. It will, however, transform itself into a DAO.

For now, COSS holders are paid 50% of the exchange trading fee on a weekly basis.

One can hold COSS tokens on the exchange itself or in an ERC20 wallet like MyEtherWallet to receive the rewards.

Conclusion: Best Crypto exchange dividend coins

All the exchanges listed above have similar advantages and it is a profitable idea to hold these tokens. I say profitable because the crypto space is still growing and has not reached its saturation level.

Also, I think such tokens are a must in any crypto portfolio because these tokens are low risk with decent rewards.

That’s it from my side in this article.

Do let me know of the tokens/coins that you intend to buy and hold. Also, share with me if you know of any other crypto exchange coins that pay dividends or offer a reduction in fees for holding them.

A few other hand-picked articles for you to read and widen your knowledge base:

An award-winning blogger with a track record of 10+ years. An international speaker and author who loves blockchain and crypto world.

After discovering about decentralized finance and with his background of Information technology, he made his mission to help others learn and get started with it via CoinSutra.

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Privacy and Reliability Are Our Greatest Assets

Tokens.net is an European Cryptocurrency Exchange operating in a stable and reliable business environment.

Proven Track Record

Managed by industry pioneers with a proven track record, we consider privacy and reliability our greatest assets. Tokens.net CEO Damian Merlak is a successful entrepreneur that co-founded many profitable companies, including Bitstamp.

He has successfully led the way in blockchain and cryptocurrency space since 2020, and today, together with a team of top experts set the pace for bringing proven exchange technology and innovation to digital assets markets.

100% Trading Volume Transparency

Tokens.net platform represents distinctive trading engine and user-friendly interface. Its unique design assures 100% trading volume transparency and fast execution.

The primary function of exchange’s native DTR tokens is providing real-time information on the number of transactions and transparent trading volume. At Tokens.net the number of cryptographically burned DTR tokens represent platforms trading volume, which can be always verified via smart contract.

Qualified Security Team

Safeguarding client funds and data is our top priority. Our employees hold reputable information security certifications such as CEH certificate from EC-Council and OSCP from Offensive Security.

With a thorough security policy we incentivize independent security researchers to discover and disclose potential software vulnerabilities.

We’re actively participating in the security community to ensure our knowledge and skills are up to date with industry best practices.

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