What makes crypto exchange tokens more competitive? Are they more beneficial compared to common coins like Bitcoin? Here is everything you need to know about them.

Crypto Exchange Tokens

Crypto exchange is a platform to buy, sell, and exchange cryptocurrencies. This is an integral aspect of the expanding blockchain. It generally has a simple user-friendly interface that is similar to what you find in other exchanges or brokerage platforms to make it easier for users to trade cryptocurrencies.

But, what if the exchanges are able to make their own tokens? What kind of rewards or benefits you can get from these tokens and how is the potential?

 

Understanding Crypto Exchange Tokens

Before you learn about the best crypto exchange tokens in the market, let's understand them first. In short, crypto exchange tokens are digital assets that are native to a cryptocurrency exchange. You can say that these crypto exchange tokens are currencies that reside within the blockchain. That is why crypto tokens represent a certain unit of value.

Crypto tokens can be used to represent an investor stake in the company. It can also be used for economic purposes. That means holders can use it to make a purchase or trade it with other securities to gain profits.

Sometimes, a crypto exchange may launch its own token for different reasons. The tokens can be used for investment purposes, to store value, or to make purchases. In fact, there are several tokens that you can exchange in the market. Although it has many benefits, are they really a good investment?

Several analysts argue that despite all the discounts and other advantages, it doesn't make exchange tokens like utility tokens. They also argue that these tokens are not quite good for investments despite all the buyback mechanisms.

However, a report from Goldman Sachs showed different results. Ever since the end of 2019, exchange tokens and digital assets associated with proof-of-stake have outperformed the proof-of-work tokens.

On the contrary, the privacy-focused digital token underperformed. It proves that in the end, market players are the ones to decide whether they want to buy exchange tokens or not.

 

Best Crypto Exchange Tokens You Should Know

Although these tokens have many benefits, finding the best crypto exchange tokens is another question. Like cryptocurrency, plenty of exchange tokens are available in the market.

To start a good investment, you have to make sure that the token you choose is practical and easy to use and offers a wide range of solutions. That also includes having fiat deposits and withdrawals as they allow you to get your money the way you want it.

Affiliate programs and community are also important aspects you want to examine. However, some traders might want to consider the rewards as well. Rewards can be a positive and powerful incentive, so make sure you know what kind of rewards the exchange token offers.

Now, as a reference, you can take a look at the list of the best crypto exchange tokens below:

 

1inch

1inch is one of the best crypto exchange tokens that you can consider. It's a decentralized exchange (DEX) aggregator and connects other DEXes into one platform. This feature lets clients use the most efficient swapping routes across all platforms.

The best part? 1inch token can be used to stake or to participate in the governance of 1inch protocols. 

1inch

 

MXC

MXC is a token belonging to MXC exchange, a user-friendly digital asset service provider widely known. You can obtain this token in two ways, by mining or buying. MXC token is the proof of rights of the MXC community.

That means the holders of this coin have the right to community event voting, team elections, and many more. They can also enjoy asset appreciation, platform revenue rebates, supervision, and other rights and interests.

MXC

 

FTX

This crypto exchange token is a native of FTX exchange, also known as FTT. These tokens offer a broad number of unique product offerings. To ensure the utility of the token, FTX makes sure to design its tokens to increase network effects and the demand for FTT, while at the same time decreasing its circulating supply.

FTX

 

Zaif

As one of the oldest crypto exchange tokens, the Japanese Zaif offers its holders a lot of prestigious features. Tech Bureau, the previous owner of the platform to which this token is native, has secured an investment from a Japanese Brokerage called Money Partners Group. This enables its holders to enjoy new features from the tokens

Zaif

 

OKEx

OKT is an exchange token native to the OKExChain ecosystem. OKT provides its users with immediate utility and benefits like voting rights, staking privileges to transaction fee payment for decentralized exchanges, as well as network-based DeFi applications. 

OKEx

 

Bithumb

BT or Bithumb Coin allows transaction within the Bithumb chain and provides the mechanism for facilitating true incentives and value within the protocol. The main idea is to enable the flow of the Bithumb family ecosystem, thus promoting sustainable development. 

Bithumb

 

Huobi Global

Huobi Token is a decentralized crypto exchange token based on Ethereum. Basically, it's a blockchain-powered loyalty point system that supports Huobi Global business, including its related products. VIP discounts, HT exclusive events, and trading against popular coins are amongst Huobi Token's benefits.

Huobi Global

 

Binance

Binance Coin or BNB initially worked on the Ethereum blockchain. Now it has become the native currency of Binance's own blockchain which is the Binance Coin. BNB can be used to trade as well as pay fees on the Binance cryptocurrency exchange, making it one of the best crypto exchange tokens in the market. 

Binance Token

 

Benefits of Crypto Exchange Tokens

There are several benefits for exchange tokens that are useful for traders and the exchange itself.

 

1. Ensuring Trust

Some exchange tokens can pose as stablecoins. These types of tokens have an important role to fill in the gaps between traditional finance and blockchain-enabled ecosystem. They can establish trust between users and regulators, thus creating a safer environment for traders in the crypto market.

 

2. Increasing Liquidity of the Market

Another benefit of crypto exchange tokens is to enhance the liquidity of the market. Liquidity means the availability of trading activity in the financial market, or in this case, the crypto market. If a market has higher liquidity, it means the assets are easily exchanged and operate more smoothly without experiencing slippage.

Crypto exchanges allow traders to use tokens as a way to increase activity, which resulted in more liquidity. Another way to increase productivity in the market is to reward traders through designated staking programs.

 

3. Fee discounts

Normally, crypto exchanges require traders to pay a marginal fee when they execute an order. However, some exchanges offer fee discounts via crypto exchange tokens. Most users even receive a discount when paying fees. There are also tiered fee discounts based on how many exchange tokens a user has in their wallet. 

 

4. Governance

While some exchange tokens are designed to serve as optional benefits to platform users, others are meant to serve as a governance mechanism for the exchange's future development.

These types of tokens offer exclusive privileges for their holders. However, a governance token is not as common as a decentralized exchange token. Despite the lack of numbers, it has become an important priority for DEXs intending to transition into community-run operations. 

 

Where to Get Exchange Tokens

New traders might not know where to get crypto exchange tokens. Most of them are initially distributed through an Initial Exchange Offering or IEO, a specific type of Initial Coin Offering (ICO).

However, another way to get your hands on these tokens is through an airdrop. That is when a project sends the tokens directly to the wallets of a crypto community, sometimes for free, other times in exchange for a simple favor such as media post promotion.

When an exchange token is sold or distributed, it can be traded and sold just like any other cryptocurrency. However, it's best not to transfer exchange tokens to external wallets unless you are certain that the wallet is compatible with the tokenization standard of your exchange tokens. 

 

Should You Use It?

A crypto exchange is a platform where you can buy, sell or exchange one virtual currency for another. However, sometimes an exchange platform will create its own crypto token offering its holders a wide range of products and services.

Whether you want to use it or not, it's all up to you. Before buying it, ensure that the rewards and benefits align with your needs and not the other way around. The main purpose of the exchange is to gain profits. 

 

Some people mistook crypto exchange tokens for coins. But what are the differences? Which one is better? Learn more about it in the article about crypto coins vs tokens.