Exchange coin/token is a widely used term in the cryptocurrency market.
Exchange tokens are a type of token issued by centralized exchanges (CEX) in the cryptocurrency market. Most major exchanges today, such as Binance, Bybit, OKX, and Huobi, have their own native tokens.
Why Centralized Exchange Coins?
The features of exchange tokens may vary depending on the policies of each exchange. However, they generally share some core functionalities:
Paying trading fees on the exchange: Exchange tokens are commonly used to pay for trading fees. Additionally, users may receive a discount on fees when choosing to pay with the exchange’s native token.
Accessing ecosystem products: Exchanges often require users to utilize their native tokens to participate in various ecosystem products, such as purchasing Public Sale tokens on Launchpad platforms, paying gas fees on blockchain networks developed by the exchange, and more.
The Feature of Centralized Exchange Coin
Binance is currently the largest cryptocurrency exchange by trading volume. As the native token of Binance, BNB holds significant potential for future growth. However, in recent times, the exchange has faced multiple regulatory challenges in various countries, which has somewhat impacted the price of BNB in the crypto market.
Users holding BNB tokens receive certain privileges, including:
Reduced trading fees when trading Spot, Margin, and Futures on Binance.
The right to participate in Binance Launchpad to purchase potential tokens launched on the exchange. Projects on Binance Launchpad often bring significant profits to investors.
Additionally, BNB utilizes an Auto-Burn mechanism to reduce its supply. The Auto-Burn mechanism automatically adjusts the amount of BNB burned based on the BNB price and the number of blocks created on the BNB Smart Chain each quarter.
As of now, BNB has undergone 23 burn events, removing over 46 million BNB tokens from circulation.
The Governance utility of Centralized Exchange Coin
Bybit is a major contributor to BitDAO, one of the largest DAOs in the world today. BIT is the governance token of BitDAO and is also used to access various products within Bybit’s ecosystem.
Holders of BIT token receive several benefits on the Bybit exchange, including:
VIP account upgrades, granting additional trading privileges and rewards.
Participation in Bybit Launchpad and Launchpool, providing early access to promising projects.
Voting rights to decide which tokens get listed on the platform.
Exclusive early access to limited NFT collections.
Benefits of Holding GT on Gate.io
GT is the native token of the Gate.io exchange. Initially, Gate.io issued 1 billion GT tokens and allowed users to obtain them for free by purchasing Gate.io points. After burning 700 million tokens, the exchange has now limited the circulating supply to 300 million GT to help maintain price stability.
Trading fee discounts for users.
Access to various ecosystem products within the Gate.io platform.
VIP account status, unlocking exclusive benefits and rewards.
OKB is the native token of the OKX exchange. It is designed as a deflationary token and is primarily used for paying trading fees on OKX. Additionally, OKB holders can access DeFi services and participate in Public Sales of potential projects launched through the OKX platform.
Buy-Back & Burn Program
The Buy-Back and Burn program is a key feature that helps OKB maintain its deflationary nature. Launched in May 2019, OKX repurchases OKB tokens every three months, depending on market conditions. This initiative aims to reduce the total supply of OKB, thereby increasing the value of the remaining tokens.
As of March 2023, OKX has bought and burned over 58 million OKB tokens.
KCS is the native token of KuCoin, launched in 2017 as a profit-sharing token, allowing traders to benefit from the exchange’s growth. The initial supply of KCS was 200 million, but through a buyback and burn mechanism, the total supply will be reduced to a stable 100 million.
Key Features of KCS Token
KCS Bonus: This is an incentive mechanism for KCS holders and contributors to the KuCoin ecosystem. Users holding at least 6 KCS are eligible to receive a daily reward, which comes from 50% of KuCoin’s daily trading fee revenue.
VIP Level & Fee Discounts: KuCoin determines VIP levels based on the number of KCS held. The more KCS a user holds, the greater the benefits they receive, including higher fee discounts. KCS can also be used directly to reduce trading fees.
KuCoin Spotlight Participation: KCS holders have priority access to Public Sales of potential projects launched on the KuCoin Spotlight platform.
Deflationary Token Model: KCS is a deflationary token, with KuCoin buying back and burning tokens from the secondary market. The amount of KCS burned is based on KuCoin’s monthly total revenue.
