Exchange coins have been relatively popular in the past year as new cryptocurrency exchanges with their own coin show up frequently with the most notable example being Binance with their BNB coin. Let’s take a closer look at the benefits of using an exchange coin and what the most popular options are that is currently available.
5 leading Cryptocurrency Exchanges with their own coin can be seen on the market:
- Binance → BNB
- Kucoin → KCS
- BitMax → BTMX
- OKEx → OKB
- Huobi → HT
Most exchanges offer a reduction in trading fees as well as promise to buy back some of the supply. This would lead to a price increase as the circulating supply decreases. However, there are some differences that need to be mentioned so let’s take a closer look at each of them.
Cryptocurrency Exchanges with their own Coin
1. Binance (BNB)
Binance is one of the cryptocurrency exchanges that has succeeded the most with their own coin. BNB currently trades around 21 USD with a market cap of 3.266 billion USD as it continues retracing. Retracement can be seen for the past months after it set a yearly high of around 39.5 USD.
Binance Coin was initially launched as a token on Ethereum blockchain. BNB`s ICO raised about 15 million USD in the middle of 2017. The token was later migrated to the Binance chain which is Binances’s own proprietary blockchain. BNB is meant to offer a discount on trading fees as well as withdrawal fees to the holders of the token.
The discount fee has a declining schedule with the first year offering a 50% discount and subsequent years having it drop to 25, 12.5 and 6.75% respectively after which there is no more trading fee reduction, however, we can expect that Binance will offer other incentives to keep using BNB. To counteract declining demand for BNB token Binance plan to do a process called “The Burn” where BNB tokens are purchased back and destroyed every quarter based on trading volume until 50% of total supply is destroyed which is 100 million BNB tokens since the total supply is 200 million. Additionally, BNB can be used by projects that are interested in being listed on the exchange in order to pay listing fees which increases demand for the token every time the project is added and helps with pushing it’s price higher.
2. KuCoin (KCS)
KCS has a market cap of 151 million USD as of September 2019.
Kucoin Shares run on Ethereum blockchain with ICO ending on September 1st 2017. Afterward, it was available to use on the platform and has the same issuance volume of 200 million tokens as Binance`s BNB token. The similar promise of buying back and destroying tokens over time until it reaches 100 million has been made by the team. 10% of net profit is used every quarter for this purpose.
Benefits of holding Kucoin Shares are various. A notable benefit is a 50% fee redistribution to KCS holders who hold at least 6 KCS. This acts in a similar way as staking coins that were popular some time ago. Also, KCS offers various airdrop giveaways where holders of KCS get tokens for free. Additionally, Kucoin offers discounts for trading fees based on the volume traded. This is based on 30 day trading period and can be potentially as low as 0.0125%
Other options for using KCS are available through third-party partners of Kucoin. They include getting a loan using KCS on the ETHLend platform or shopping online without extra fees with SwirlPay. Other smaller offers can be seen on the exchange homepage.
3. BitMax (BTMX)
BTMX has a market cap of 47.5 million USD. An all-time high of 0.342 USD was reached on March 27th 2019 and since then the token has had a relatively stable price.
BitMax Token is also based on Ethereum blockchain and started to trade in January 2019. BitMax promises in their whitepaper of distributing 80% of transaction fee revenue as various incentives on the platform. Lock-up rules are set in order to qualify customers to receive some of the incentives. Only those who have tokens under lock-up are eligible for daily distribution of rewards.
Other benefits for BTMX are the opportunity to participate in IEO through Bitmax Launchpad and being able to purchase “Point card”. Point cards offer a 50% discount for margin interest repayment until its value is used.
4. Okex (OKB)
OKB stands strong with a market cap of 833 million USD on September 19th, 2019.
OKB is also based on Ethereum blockchain with a total supply of 1 billion as of now. Effective circulating supply is only 300 million as the rest is locked until 2020. This is similar to previously mentioned exchange coins and offers similar rewards to other platforms.
OKB token benefits can be seen as an opportunity to participate in IEO on the OKEx Jumpstart platform. This requires you to hold more than 100 thousand OKB tokens. Also, OKB has a Buyback & Burn mechanism that uses 30% of transaction fees in order to spot buy OKB. Tokens are later destroyed in order to reduce circulating supply and boost the price. Additionally, OKEx offers periodical discounts on trading fees as well as trading competitions with prize pools.
5. Huobi (HT)
HT, based on Ethereum blockchain and a total supply of 500 million tokens, the Market cap has been around 1 billion USD for some time and remains stable for now (September 19th).
Holding HT has benefits of transaction fee discount and 20% revenue repurchase and destruction. Other exchanges also do this and currently, it is the industry standard. Other benefits include having a daily dividend in form of Huobi Pool Tokens to holders of HT.
Additional benefits of HT are liquidity protection, opportunity to pay for OTC deposit and becoming certified OTC merchant. Minor benefits include: receiving airdrops and voting for important decisions regarding the future development of exchange and token.
To summarize, there are similarities in the way cryptocurrency exchanges with their own coin try to boost their token price. Tokens are mostly run on the Ethereum platform and offer Buy Back & Burn mechanism that reduces circulating supply.
This in return boosts the token price if demand stays the same. Additionally, many offer dividends in the form of revenue share to holders of tokens. In order to qualify, usually token holders need to lock tokens on the exchange. Other benefits include a reduction in trading fees, free airdrop tokens and being able to participate in IEO’s.
BitMax offers the most aggressive incentive structure. They use 80% of revenue to offer incentives as well as having a 50% discount on margin trading fees. Reduction of fees is made in the form of Point cards that can be purchased on the platform. This could be explained by being a relatively new player in the market who needs to attract new customers. On the other hand, Binance offers more conservative fee reductions and bonuses. The exchange is already is the market leader and one of the best-known exchanges with a very good offering of quality projects.