Exchange coins and tokens are typically used as “fuel” for the home exchange platform, offering benefits to its users. These coins and tokens are useful, and that’s why they have potential to grow in value and deserve your attention.
As of July 29, 2020, CoinMarketCap reported over 300 exchanges offering 5,833 cryptocurrencies with a total market cap of over $326 billion. Coinlore omitted some tokens, listing a total of 4,559 cryptocurrencies with a total market cap of over $318 billion. Clearly, the numbers change fast and exact numbers are hard to get at any time. Nevertheless, exchanges and exchange tokens seem to attract many new players. That could be the reason why over 20 crypto exchanges have their own token.
Why are there so many exchange tokens and so many exchanges? The answer is simple: An exchange will always make money from trading fees, regardless of your personal success in cryptocurrency trading, and regardless of the success of all those cryptocurrencies, tokens, coins or other crypto assets. Some of these might even not be here tomorrow, but the exchanges will still keep making money from their services.
It is quite similar to the gold rush. Not all gold prospectors found gold and became rich. But huge profits were reaped by those who were selling mining equipment – shovels, picks, and other things, regardless of whether the prospectors returned home with any gold.
What do the exchange coins and tokens bring to the table and why does it make sense to have them in your portfolio?
The Advantages of Exchange Coins and Tokens
Generally speaking, most exchange coins and tokens provide similar benefits:
- Discount on fees: If you pay the fees on the crypto exchange with the exchange specific token, you get a considerable discount on the fees (typically trading fees, in some cases, withdrawal fees). This is true for most exchange coins and tokens.
- Voting: Some exchange coins enable users to vote on new listings on the exchange, for example, Huobi (HT), KuCoin (KCS), ETHfinex (NEC).
- Share in profits: Some exchange tokens give users the opportunity to have a share in the net profit of the exchange, for example, Bibox (BIX), COSS (COSS).
The discounts on fees can be as high as 50 percent, which can be very attractive for traders, since they can save a lot of money by using the exchange specific coin. Since these coins and tokens are quite useful, their price might grow over time.
The Best Exchange Coins and Tokens
These were the five best exchange coins and tokens according to the ranking at Coinmarketcap.com as of July 29, 2020:
Binance / Binance Coin (BNB)
Coinmarketcap ranking: #10 | Charts
BNB is used mainly for two purposes – trading discounts and access to IEOs (Initial Exchange Offering) on the Binance Launchpad. Binance launchpad had several IEOs that attracted many investors who needed to hold BNB tokens in their exchange account to have the possibility to participate in the IEOs. Binance implemented some additional features for the token, such as referral program bonus and voting for listing new coins on Binance exchange. BNB is also the native token of the Binance Chain blockchain, which further increases the value of the BNB token.
Bitfinex / UNUS SED LEO (LEO)
Coinmarketcap ranking: #17 | Charts
LEO token is a fee discount token. The token description at Bitfinex states that token holders will receive other benefits such as reduced lending fees, and “benefits across the entire portfolio and are expected to obtain benefits from future projects, products, and services.”
Huobi / Huobi Token (HT)
Coinmarketcap ranking: #19 | Charts
HT token is mainly a discount fee token. Huobi lists some other features of their token, such as invitation and rebates, rewards of sub-tokens, OTC legal service, Huobi Cloud, voting, OTC, corporate payment.
OKEx / OKB Token (OKB)
Coinmarketcap ranking: #35 | Charts
The OKB token provides a discount for trading fees, listing benefits, and access to interesting IEOs on the OKEx Jumpstart IEO platform.
KuCoin / KuCoin Shares (KCS)
Coinmarketcap ranking: #109 | Charts
KCS tokens can be used to get discounts on trading fees. Holders of KCS receive 50% of the overall trading fee revenue. KCS owners can get lottery tickets to access IEOs on the Kucoin spotlight. Moreover, KCS owners can receive airdrops of tokens.
More Exchange Coins and Tokens
The five top exchange tokens shown above are ranked very high among the current 5,833 cryptocurrencies. Clearly, exchange coins are very attractive for the users and for the crypto market. More exchange coins and tokens are listed alphabetically below::
- Bankera / Bankera Token (BNK)
- Bibox / Bibox Token (BIX)
- BitMax / BitMax Token (BTMX)
- Bitpanda / Bitpanda Ecosystem Token (BEST)
- Coinsbit / Coinsbit Token (CNB)
- EXMO / EXMO Coin (EXM)
- FTX / FTX Token (FTT)
- LATOKEN / LATOKEN (LA)
- Liquid / QASH Token (QASH)
- Lykke / Lykke Coin (LKK)
- MXC / MX Token (MX)
- OKEx / OKB Token (OKB)
- WazirX / WRX Coin (WRX)
- ZB / ZB Token (ZB)
A word of caution: “All that glitters is not gold,” as everybody knows. Thus, if an asset is denoted as an exchange coin or token, this automatically does not mean top quality. According to some indications, some exchanges are probably fabricating their trading volume of their exchange specific tokens: Bibox (BIX), BTMX (BitMax), CNB (Coinsbit), MX (MXC), ZB (ZB).
DEXFIN Token (DXF) as the New Promising Kid on the Block(chain)
If you didn’t include some of those quality exchange specific coins and tokens in your portfolio when they were offered at their introductory price you might look for new promising exchange tokens. The DEXFIN token (DXF) is such an example:
- Discount on fees: Up to 50% lower fees.
- Staking: You can get up to 11% per year for locking and keeping your DFX tokens at DEXFIN Exchange.
- Airdrops: When holding a certain amount of DXF tokens you can get free coins or tokens from new listings on the DEXFIN platform.
- Exchange: Straightforward exchange between major crypto currencies.
- Tokenization coin: The owners of DFX can get tokens of new tokenized projects by DEXFIN at a discount.
- Exchange coins trading: You can trade DXF token for other exchange specific coins on the DEXFIN Exchange.
- Liquid Network: The DXF token will be ported to Liquid Network which enables the issuance of custom tokens and security tokens with fast transactions and low fees.
How to Take Advantage of Exchange Coins and Tokens
The most logical approach is:
Lower your fees: Use these exchange specific coins and tokens to lower your fees at an exchange.
Invest: Another field is investing. If you had invested $1,000 into Binance Coin (BNB) at its conception in 2017 (when you could get it for around $0.10), today, you would have $200,000. BNB reached its all-time-high price of $39.44 on June 20, 2019; at that moment your $1,000 would have yielded around $390,000. Of course, it is very difficult to know when the asset is at its top price and sell it at such a profit. Nevertheless, these numbers show how quality exchange coins and tokens can grow in price over time.
Buy the dip: What can you do today? You can try to get these exchange tokens when the price dips, expecting that it might rise back up even higher than before.
Look for new promising exchange tokens: Another possibility is to look for new, promising exchange tokens and acquire them at their beginning when their price is still very low. A good contender is the DEXFIN token (DXF) that offers features similar to the best exchange coins and some more.