To most onlookers, investing in exchange tokens may not seem overly exciting. However, these tokens do not just serve a speculative value, as they offer tangible benefits. Even in 2021, it is pertinent to pay attention to these offerings, although no two tokens are the same.
A Growing List of Tokens
The cryptocurrency space has no shortage of native currencies, tokens, and assets. Everything can be tokenized on a blockchain, leading hundreds of projects to create their own “currency”. Whether that is a good or bad trend will always remain subject to debate. There are thousands of assets already, and more are created every single week.
For neophyte users, this creates a lot of unnecessary clutter and confusion. Not every project or exchange needs a native asset unless they bring value to the overall ecosystem. More often than not, there is little to no value found where these assets are concerned. One notable exception are exchange tokens, as they can unlock extra benefits.
That doesn’t mean speculators should jump on every exchange token either. To date, very few of them have proven to be successful in the long run. There’s also a good reason why top exchanges like Coinbase, Kraken, and Bitfinex do not issue their own assets, but instead focus on providing a user-friendly trading experience.
As is always the case, there may be some hidden gems in the world of exchange tokens. Finding the right trading platform that brings value to the ecosystem and its users can be tricky. Most companies maintain different models, yet not all of them empower the users.
Examples of Prominent Exchange Tokens
When it comes to analyzing prominent exchange tokens, the first one coming to mind is Binance’s BNB. It is a very popular asset that also serves a significant speculative purpose. Currently valued at $132, holders can use it to cover trading fees, among other things. In the past year alone, BNB has gained 448.4% in value, making it a very successful crypto-asset in that regard. Binance also performs quarterly token buybacks to keep the circulating supply in check.
Decentralized exchanges are also making their mark in the industry. Tokens launched by Uniswap, Sushiswap, and 1Inch have risen in value by a large margin over the past year. Thanks to gains of 566%, 651%, and 314%, respectively, speculators reap the benefits of these assets.
However, from a use-case perspective, it appears there is a different trend taking place. Although UNI, SUSHI, and 1Icnch empower users to partake in their respective platforms’ governance aspect, the community engagement remains on the low side of the spectrum. Changing that narrative is one of the key hurdles to overcome for DEXes in 2021 and beyond.
Shifting back to tokens issued by centralized exchanges, similar to Binance Coin, the MX Token is bought back by its parent company through 100% of MXC Exchange’s spot and ETF trading profit. Additionally, MX Token cuts spot trading fees by 20%, holders get to vote on upcoming listings, and users can partake in MX DeFi and gain access to liquidity mining. Users can access liquidity for DeFi assets simply by owning this token.
MX Token Performance
In recent weeks, MX Token has gone through a bullish price spell seemingly unrelated to how Bitcoin and Ethereum are evolving. It is pertinent for these alternative assets to try and carve out their own path in this ever-competitive space.
By nearly doubling in value before the recent market setback, it is now on many trader’s radars. However, the real value of this asset – as well as any other exchange asset – is always subject to speculation, and should be interpreted as such.
Conclusion
It is always advisable to look at the many different exchange tokens on the market and perform a thorough fundamental analysis. It is pertinent for exchanges to differentiate themselves for competitors through a variety of means. Whether that is through higher trading fee discounts, or offering more passive benefits, every option can have merit.
What the future will hold for all of these assets, is difficult to predict. Cryptocurrencies are notoriously volatile, yet solid fundamentals often go a long way in making a lasting difference.
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