Bonuses and reputation. Experts named promising exchange-traded tokens
Experts told what an investor should pay attention to when analyzing cryptocurrencies issued by trading floors, and named several promising coins from this category
Exchange tokens originated as service instruments intended for use within ecosystems. Over time, however, their use has expanded. Today, they are used for various discounts and bonuses on the platform that issued them, as well as an investment asset.
Like any other cryptocurrency, exchange-traded tokens are subject to risks. In addition to factors that affect the market as a whole, the value of such coins is significantly affected by the reputation of the platform that issues them. This is similar to the way a company's reputation affects its stock price: when there is bad news, the price goes down.
Experts talked about what to look out for when considering cryptocurrency tokens, and which of such cryptocurrencies are the most promising at the moment.
Crypto exchanges tokens are often not so much coins as a way to attract the attention of exchange customers, a tool for greater user loyalty, said the head of the analytical department of AMarkets Artem Deev. He explained that platforms can accrue various points, incentives and other bonuses to their clients with such tokens.
But the growth in the value of these coins can be good due to their burning, which exchanges do regularly, the expert noted.
When choosing their own token DEX and SEX platforms, an investor should first evaluate their usage scenarios, said Chen Limin, CFO and head of trading operations at ICB Fund Crypto Fund. He said that such cryptocurrencies can be used not only to get discounts on trading commissions and part of the fees received by the platform, but also to direct to stacking (placement of coins on the exchange for a fee), gain access to eirdrop (free giveaways) and increase the chances of participation in IEO (initial offer of various tokens, which is held on the platform of the crypto exchange).
Also, according to the expert, it is not unreasonable to get acquainted with the dynamics of cryptocurrency exchange issuance. Check whether the platform performs token burning or not, whether it conducts vesting.
In the initial stages of coin distribution, platforms may impose a temporary ban on the sale of these assets. This is done to give the project more time to gain liquidity and develop the ecosystem until users are able to sell their coins.
Another factor for evaluation is to analyze the regulatory landscape, Limin noted. He explained that, for example, the US Securities and Exchange Commission's (SEC) desire to subject decentralized platforms to its oversight could limit investors' willingness to buy these coins.
This is also true for CEX tokens, the expert added. According to him, the SEC's desire to recognize most listed assets as securities could undermine the project's business model. When considering tokens from such platforms, it's important to consider the proportion of trading volume that comes from the U.S., Limin explained.
In addition to bonuses and regulatory policies for cryptoprojects, investors can take into account an analysis of the competitive environment and the dynamics of a platform's position in the market, the head of ICB Fund believes. He pointed out that Uniswap (UNI) accounts for 70% of trading volumes in the Ethereum segment and Curve (CRV) for 10%, and their positions look unshakable.
Among centralized platforms, according to the expert, Binance (BNB) dominates, but the situation among the exchanges behind it is changing. According to Kaiko, among platforms with their own tokens, trading volumes increased with Bitfinex and FTX from January to August, but fell heavily with Huobi, Limin explained.
FTT (CEX exchange FTX), BNB (CEX exchange Binance) and UNI (DEX exchange Uniswap) meet the criteria for buying, the expert said. According to him, in the conditions of "cryptozyma" the turnover of trades in digital assets has significantly decreased, which allows evaluating the purchase of the above coins as more optimal from the point of view of the reward/risk ratio.
According to the head of the analytical department of AMarkets, everything depends on the prospects and the number of users of the trading platform itself, issuing tokens. Therefore, first of all, it is worth to focus on the largest, mass and having received regulatory approvals of crypto-exchanges, the analyst is sure.