Cryptocurrency exchanges are becoming a popular way to invest in crypto, providing users with an easy-to-use platform for buying, selling, and exchanging digital assets. Crypto exchange tokens are digital assets native to these platforms and often give the holders additional benefits such as discounted trading fees or the ability to purchase exclusive products.
In choosing an exchange, before we even choose the exchange token, we need to know whether it’s a centralized or decentralized exchange. After deciding between the two kinds of exchanges, we can proceed to use quantitative tokenomics in choosing the exchange token. Among the metrics that fall under this parameter are:
1. Maximum Supply. If a token has no maximum supply, additional tokens can be created. This can cause inflation within the token ecosystem and devalue individual tokens, lowering the price over time.
2. Circulating Supply. Circulating supply gives information on how mature the token economy is of a specific token, how far along in the token distribution plan a protocol is and gives information on how much further inflation to expect for the token.
3. Burning Mechanism. Once a protocol has the maximum supply of tokens released to an ecosystem, it may choose to burn a portion of tokens to decrease the supply and benefit token-holders through price movement.
4. Governance Mechanism. Governance includes token creation, minting rules, and token management. Tokenomics introduces various approaches to the governance models whereby effective token management can take effect.
5. Incentive Mechanism. Not only does a company with a crypto token want to increase the value of their company, but they also want to increase the value of their token. This incentivizes a company with a token to create value within its token ecosystem by offering benefits to holders. Generally, the more a user holds, the more discounts they’re entitled to.
Take note of this precaution though, by minting exchange tokens, the exchange keeps a bunch for themselves and generates a huge amount of wealth. That wealth is created, it should be noted, not by selling off equity or issuing debt – it is created by introducing the value of the token to the users of the exchange by sheer marketing hype. Exchange tokens also enhance the liquidity of an exchange, providing the platform additional dry powder to call on when markets get tight.
This article will explore the top 13 crypto exchange tokens, offering an overview of each token’s features and potential benefits, which in turn can help you decide in which of the exchanges to conduct your crypto transactions.
Binance Coin (BNB)
Binance Coin, or BNB, is the native cryptocurrency of the Binance ecosystem. It serves as a tool to facilitate exchanges between users on the network; you can also use it to pay for goods and services inside and outside the Binance ecosystem. The cost of using BNB for transactions is significantly lower than other payment forms, making it an attractive option. As with most cryptocurrencies, BNB is wholly decentralized and operates on blockchain technology, ensuring secure transactions with every use. BNB provides a flexible and safe way to make peer-to-peer payments without involving third-party institutions or intermediaries.
Tokenomics
Binance is committed to providing enduring value for users of its native token, BNB. To this end, the platform schedules regular coin burns each quarter to reduce the total supply of BNB and increase its value. The amount of coins burned depends on the exchange’s global quarterly trading volume, incentivizing users to trade on Binance.
These burns will continue until they permanently remove 100 million BNB from circulation, 50% of the total outstanding BNB. Through these coin burns, investors can look forward to increasing returns as demand for BNB grows.
Benefits
– Reduced trading fees: crypto traders can reduce their trading fees when using BNB as a payment method.
– Access to exclusive products: Users can access exclusive products and services through Binance Launchpad.
– Participation in IEOs: crypto traders can participate in Initial Exchange Offerings (IEOs) on Binance.
– Loyalty programs: users can benefit from rewards and loyalty programs offered by Binance.
Cronos (CRO)
Cronos, or CRO, is the native token of Crypto.com, a leading cryptocurrency exchange and payments platform. It allows users to enjoy unique benefits such as discounted trading fees, rewards for their loyalty to the platform, and access to exclusive products. Additionally, holders of CRO can receive up to 8% APY (annual percentage yield) on their digital assets.
Tokenomics
CRONOS has a circulating supply of 25.26 billion and a total supply of 30 billion, with an initial hard cap set to 100 billion and burnt 70 billion.
This system of tokenomics allows for loyalty and stability in the cryptocurrency market that may not have been available before.
Benefits
– Reduced trading fees: Crypto.com allows users to reduce their trading fees when they stake CRO.
– Rewards program: holders of CRO can benefit from lucrative rewards and loyalty programs offered by Crypto.com
– Earn interest: CRO users can earn additional income through the platform’s 8% APY feature.
– Exchange and payment services: users can easily use CRO to pay for goods and services and exchange cryptocurrency pairs.
Huobi Token (HT)
Huobi Token, or HT, is the native token of Huobi Global, one of the world’s leading digital asset exchanges. By holding and using HT, users can benefit from discounts on trading fees, access to exclusive Huobi services such as margin trading and futures trading, and rewards for their loyalty to the platform. Additionally, users can vote on projects listed on Huobi Global, which gives them a voice in the platform’s growth.
Tokenomics
With a circulating supply of 239 million, Cronos ensures that tokens remain scarce, leading to organic growth. Furthermore, with the total supply capped at 500 million, the availability of tokens is kept in check.
Benefits
– Reduced trading fees: crypto traders can reduce their trading fees when using HT as a payment method.
– Access to exclusive services: Users can access margin trading, futures trading, and other Huobi exclusive services.
– Loyalty programs: Huobi offers rewards and loyalty programs for HT holders.
KuCoin Shares, or KCS, is the native token of KuCoin, an international cryptocurrency exchange. By holding and using KCS on the platform, users can benefit from discounted trading fees and access to exclusive products. Additionally, holders of KCS are eligible for a share of 50% of the total trading fees generated by Kucoin, which gives them more incentive to stay with the platform.
Tokenomics
The KCS token, issued by Kucoin Exchange, has a unique tokenomics structure. According to their records, the circulating supply is 98.3 million tokens, and the maximum is 170.1 million.
Initially, the maximum supply was 200 million tokens, which has since lowered drastically. The reduction dramatically affects how KCS trades. Consequently, any investor wishing to incorporate KCS into their portfolios must keep up-to-date with its latest developments to make an informed decision.
Benefits
– Reduced trading fees: crypto traders can reduce their trading fees by up to 20% when using KCS as a payment method.
– Share of revenue: holders of KCS are eligible for a share of 50% of the total trading fees generated by Kucoin.
– Access to exclusive products: Users can access premium services like the KuCoin bonus program.
– Community voting power: holders of KCS can vote on which tokens the exchange should list.
Bitfinex Token (UNUS SED LEO)
Bitfinex Token, or UNUS SED LEO, is the native token of Bitfinex exchange. It gives users access to deep liquidity and low trading fees when buying/selling digital assets on the platform. Additionally, holders of LEO are eligible for a share of the daily trading fees generated by the exchange and access to exclusive products and services.
Tokenomics
Unus Sed Leo Tokenomics is an innovative concept to provide long-term stability to the LEO token and its holders. iFinex and its affiliates will buy back LEO from the market each month, equal to at least 27% of their previous month’s gross revenues. This process will continue until all tokens are off commercial markets – currently, at 953,954,130.
Benefits
– Reduced trading fees: crypto traders can reduce their trading fees by up to 15% when using LEO as a payment method.
– LEO holders will receive up to a 25% withdrawal and deposit fee discount on crypto.
BitMax Token (BTMX)
BitMax Token, or BTMX, is the native token of BitMax exchange. It gives users discounts on trading fees when buying/selling digital assets on the platform and access to exclusive products and services. Additionally, holders of BTMX are eligible for a share of the daily trading fees generated by the exchange, which gives them more incentive to stay with the platform.
Tokenomics
BMEX is a revolutionary cryptocurrency with an innovative tokenomics system. It has a maximum supply of 450 million tokens, with 63.75 million in circulation. To provide more significant value to the token holders, BitMEX has created special incentives such as the monthly burning of BMEX.
Benefits
– Reduced trading fees: crypto traders can reduce their trading fees by up to 15% when using BTMX as a payment method.
– Exclusive services to large token holders: large holders of BTMX can access premium services.
– Refunds on withdrawal fees
– Exclusive privileges and experiences to platform products like tickets and BitMEX SWAG.
Uniswap (UNI)
Uniswap, or UNI, is the native token of Uniswap, a decentralized exchange platform built on Ethereum. It allows users to access deep liquidity and low trading fees when buying/selling any currency pair in its market. Additionally, holders of UNI are eligible for a share of the fee generated by trades executed through the platform and access to exclusive products and services.
Tokenomics
Uniswap’s UNI token has a total supply of one billion, with the initial distribution distributed among various stakeholders. The project allocated sixty percent of the tokens to the Community, 21.27 percent to the team, 18.04 percent to investors, and 0.69 percent to advisors.
Benefits
– Low trading fees: users can access low transaction costs when buying/selling digital assets on Uniswap.
– Discounts on liquidity fees: users with UNI are eligible for discounts on the fees generated by providing liquidity to pools.
– Community participation: UNI holders can vote on new features and token listings proposed by the community.
PancakeSwap (CAKE)
PancakeSwap, or CAKE, is the native token of PancakeSwap, a decentralized exchange platform built on the Binance Smart Chain. It gives users access to deep liquidity and low trading fees when buying/selling any currency pair in its market. Additionally, holders of CAKE are eligible for rewards for their loyalty to the platform, which gives them more incentive to stay with the exchange.
Tokenomics
The CAKE Tokenomics are clearly defined and managed, with a total supply of 370,137,893 tokens and a circulating supply of 189,059,627 tokens.
The stability of the token is further preserved through mechanisms such as the emission and burning of additional tokens to preempt any inflationary spikes.
Benefits
– Low trading fees: users can access low transaction costs when buying/selling digital assets on PancakeSwap.
– Loyalty rewards: CAKE holders are rewarded with bonus tokens whenever they use the exchange.
– Community participation: CAKE holders can vote on new features and token listings proposed by the community.
– Incentivized staking: users who stake their CAKE tokens can earn rewards for their loyalty to the platform.
AAVE (LEND)
AAVE, or LEND, is the native token of Aave, a decentralized lending and borrowing platform built on Ethereum. It allows users to access deep liquidity and low trading fees when buying/selling any currency pair in its market. Additionally, holders of LEND are eligible for a share of the fees generated by trades executed through the platform and access to exclusive products and services.
Tokenomics
The AAVE token operates under deflationary economics, perpetually burning tokens to limit its total supply. Currently, AAVE has a circulating supply of 14,274,759 and a total supply of 16,000,000 tokens.
Benefits
– Low borrowing rates: users can access lower interest rates when taking out loans on Aave.
– Passive income: The exchange rewards holders of LEND for their loyalty to the platform.
– Community participation: LEND holders can vote on new features and token listings proposed by the community.
– Liquidity mining: users who provide liquidity to Aave can earn rewards for their loyalty to the platform.
SushiSwap (SUSHI)
SushiSwap, or SUSHI, is the native token of Sushiswap, a decentralized exchange platform built on Ethereum. It allows users to access deep liquidity and low trading fees when buying/selling any currency pair in its market. Additionally, holders of SUSHI are eligible for rewards for their loyalty to the platform, which gives them more incentive to stay with the exchange.
Tokenomics
The circulating supply of SUSHI tokens is 192,789,255, with a total supply of 247,886,434.
The new proposed SUSHI tokenomics creates different reward and earning structures for SUSHI holders and liquidity providers. The project is shifting from staking rewards received according to trading fees to emission-based rewards in time-locked tiers with longer durations receiving higher payouts.
Benefits
– Low trading fees: users can access low transaction costs when buying/selling digital assets on Sushiswap.
– Community participation: SUSHI holders can vote on new features and token listings proposed by the community.
– Incentivized staking: users who stake their SUSHI tokens can earn rewards for their loyalty to the platform.
– Liquidity mining: users who provide liquidity to Sushiswap can earn rewards for their loyalty to the platform.
yearn.finance (YFI)
Yearn.Finance, or YFI, is the native token of Yearn.Finance, a decentralized yield farming platform built on Ethereum. It allows users to access deep liquidity and low trading fees when buying/selling any currency pair in its market. Additionally, holders of YFI are eligible for rewards for their loyalty to the platform, giving them more incentive to stay with the exchange.
Tokenomics
Yearn.finance (YFI) had a fixed supply of 30,000 tokens; however, they increased the number to 36,666 following a successful consensus reached by YFI token holders.
It has a circulating supply of 32,777.
Benefits
– Low trading fees: users can access low transaction costs when buying/selling digital assets on Yearn.Finance.
– Community participation: holders of YFI can vote on new features and token listings proposed by the community.
– Incentivized staking: users who stake their YFI tokens can earn rewards for their loyalty to the platform.
– Liquidity mining: users who provide liquidity to Yearn.Finance can earn rewards for their loyalty to the platform.
OKEx Token (OKB)
OKEx token, or OKB, is the native token of OKEx Exchange. It gives users discounts on trading fees when buying/selling digital assets on the platform and access to exclusive products and services. Additionally, holders of OKB are eligible for a share of the daily trading fees generated by the exchange, giving them more incentive to stay with the platform.
Tokenomics
To drive the value up through deflation and encourage 3rd party investment, OKB implemented a Buy-Back & Burn program where regular spot market transaction fees buy back and burn 30% of the total supply of 300 million tokens.
This deflationary mechanism provides opportunities for investors who want to know if their tokens will hold their value as the circulating supply gradually decreases over time.
Currently, it has a circulating supply of 246,638,974 tokens.
Benefits
– Discounted trading fees with OKB: users can access lower transaction costs when buying/selling digital assets on OKEx.
– Incentivized staking: users who stake their OKB tokens can earn rewards for their loyalty to the platform.
– Priority access to token sales and products: holders of OKB can access exclusive token sales, services, and products offered by the exchange.
MEXC Token (MX)
MXC Token, or MX, is the native token of MEXC Exchange. It provides users with discounts on trading fees when they buy/sell digital assets on the platform and access exclusive products and services.
MX has also launched the “Everything Growth Plan,” becoming the first BSC and Heco cross-chain asset, offering utility such as on-chain lending, liquidity mining, and DEX trading to improve the MEXC token economy.
Tokenomics
The MX token (MX) is integral to the MEXC platform. The initial token design set aside 450 million MX tokens divided into four reserves–100 million were allocated to the MEXC Foundation Reserve, 150 million to MEXC Labs, 100 million to the MEXC Strategic Partnership, and 100 million burnt immediately. The 450 million tokens are locked and never distributed.
The remaining 99,999,999 are in circulation. Additionally, the exchange redirects 40% of all profits generated by MEXC towards burning to reduce the circulation supply of MX tokens.
This focus on reserve distribution and burning creates a tokenomics approach that enables smoother scalability and increased demand for the MX token.
Benefits
– Discounted trading fees with MXC: users can access lower transaction costs when buying/selling digital assets on MEXC.
– Incentivized staking: users who stake their MXC tokens can earn rewards for their loyalty to the platform.
– Priority access to token sales on launchpad and products: holders of MXC can access exclusive token sales, services, and products offered by the exchange.
– Project voting: holders of MXC can vote on new projects the community proposes.
Conclusion
Crypto exchange tokens are an excellent way for users to access discounts and exclusive products and services on the exchanges they use. Additionally, holders of these tokens are eligible for rewards associated with their loyalty to the exchange, giving them more incentive to stick around. Due to the current chaos involving decentralized exchanges, one might consider the top 10 centralized exchange tokens over the decentralized exchange tokens. Further on, take a look at the metrics which will qualify each exchange token.
The token utility is also important as these factors can help you determine the potential use cases for a token, which is essential in understanding how the token’s economy will likely evolve. For example, BNB’s utility includes powering the BNB Chain, paying transaction fees and enjoying trading fee discounts on the BNB Chain, and serving as a community utility token on the BNB Chain ecosystem.
Finally, a token’s incentive mechanism is crucial. How a token incentivizes participants to ensure long-term sustainability is at the center of tokenomics.
Source: https://www.cryptopolitan.com/crypto-exchange-tokens/