Cryptocurrency Exchanges and their Native Tokens: What are the Basis for Growth

Digital currencies are cryptographically designed tokens that can serve many purposes but primarily as a medium of exchange. They are also known as cryptocurrencies and virtual assets as they are intangible when compared to fiat currencies or banknotes. With Bitcoin (BTC) making the record as the very first of these digital assets, developers have created a whole new range of cryptocurrencies, native to different companies and protocols.

Cryptocurrencies have ushered in a whole range of new milestones in payment for us all. Without the need for a bank account, anyone anywhere can get involved in managing their own finances, without the need for a banking intermediary, or a central bank to oversee the transactions. Based on their feature, a whole new economy has been created around these new asset classes, and to better appreciate their value, cryptocurrency exchanges have evolved to trade them, just as the broader financial assets are being traded.

Cryptocurrency Exchange Evolution and the Place of Governance Tokens

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Cryptocurrency exchanges (CEXs) work like traditional stock exchanges or trading platforms or other financial assets brokerage providers. While they have adapted a lot of features from the mainstream bourses, crypto exchanges have evolved to withstand or adjust to the extreme volatilities of these cryptocurrencies.

Native cryptocurrency exchanges are divided into two namely;

  • Centralized exchanges, and;
  • Decentralized exchanges.

The centralized exchanges are usually managed by a single body or firm, who provides the liquidity for all of the assets supported. These exchanges act as a middle man between the buyers and sellers, with trading algorithms automating the buying and selling process. 

Decentralized exchanges (DEXs) on the other hand are a new offshoot or evolution of trading marketplaces, in which Peer-2-Peer transactions are favored. The DEXs are borne out of the broader revolutionary concept of decentralized finance (DeFi), which seeks to empower people financially in a way not known to mainstream finance. DeFi also involves Smart Contracts and these advanced automation programming all find expression in successfully running a decentralized exchange.

The duo of CEXs and DEXs have their similarities, but with more differences in their mode of operation. One of the similarities entails the launch of native cryptocurrencies, which aid in powering the transactions, campaigns, reward systems, and other creative offerings billed to serve their customers and community.

The use of native tokens is one other way digital currencies have found a good use case, and in this article, we would look at some of the tokens for the top cryptocurrency exchanges. As digital assets with inherent value, these exchange tokens are known to also grow in valuation as do all cryptocurrencies. Five exchanges and their tokens stand out per rate of growth through utility. This article will profile these five exchanges and they include, 

  • Binance exchange and its token, the Binance Coin (BNB)
  • Gate.io Exchange and its Gate Token (GT) 
  • Uniswap and the UNI token, 
  • PancakeSwap and the CAKE token, and;
  • Nominex Exchange and its native coin, the Nominex NMX Token.

Nominex Exchange and the NMX Token

Nominex is one of the innovative and young trading platforms where cryptocurrencies can be traded. The exchange comes with its own uniqueness, brandishing a mix of centralized exchange features with an offer of decentralized finance products including but not limited to yield farming and staking. 

Nominex is the first cryptocurrency exchange to debut a utility token and a corresponding utility farming. Utility farming allows trading with a 100% discount, giving the platform users the maximum income from the affiliate program. Nominex also has a partnership with the world’s largest cryptocurrency exchange, Binance through the Binance brokerage program. Via this program, users will actually be possible to trade on Binance for free and at the same time constantly farm NMX. 

Though relatively new, Nominex exchange has attained huge milestones, both in securing functional partnerships and in its growing community amongst others. The embrace of Nominex takes its backing from the rollout of such features including but not limited to;

  • Giving customers a room to buy crypto using Visa or Mastercard;
  • Higher withdrawals up to 3 BTC daily for customers that have not completed their Know-Your-Customer (KYC) requirements;
  • Users securing as much as 50% off when using the NMX tokens to pay the trading fees; and;
  • The offering of a wide range of great incentives or referral programs.

In addition to these features, and the Binance ecosystem integration, Nominex plans to introduce other new features including copy trading, semi-automatic trading bots, and much more.

The Nominex Token and its Growth Highlights

The Nominex ecosystem is powered by the NMX token, launched as a BEP20 token in February 2021. While it stands resilient amid the general market correction, NMX has witnessed great records in its short history, surging as much as 5000% from a price of $0.10 to over $5.47 a few months after it was launched.

The token is used for paying the transaction fees on the Nominex exchange and to pay out rewards in the wide array of reward systems the firm has on offer.

Binance Exchange and the Binance Coin

Binance prides itself as the largest crypto trading platform by market capitalization. It is a centralized exchange that offers robust support for a wide range of digital assets. The exchange was launched back in 2017 to provide a viable marketplace with broad accessibility to everyone in the ecosystem.

The exchange is powered by the Binance Coin (BNB), a coin that championed the evolution of lower trading or gas fees inherent in cryptocurrencies to provide alternatives to users as Ethereum becomes unusable. The Binance exchange has a thriving ecosystem of decentralized finance protocols powered by the Binance Smart Chain (BSC) network. Through the BSC, protocols find a home on the network, leveraging the scalability and the lower gas fee mechanisms to directly combat Ethereum-backed DeFi products.

The BNB has a wide-ranging utility, ranging from powering the BSC, to being used in e-commerce and a growing list of use cases the Binance exchange is introducing. These utilities have stirred the growth of the cryptocurrency, pushing it to currently rank as the 4th largest digital token on CoinMarketCap. BNB is currently trading at $279, down from its all-time high (ATH) of $690. Despite this price plunge, the cryptocurrency has surged by 291118.49% from its all-time low of $0.09611.

Gate.io Exchange and its Gate Token (GT)

Gate.io is a vibrant cryptocurrency exchange operating out of South Korea. While the exchange is native to the Asian markets, the exchange’s uniqueness and features are noticed by users across the globe. Brandishing huge liquidity and a robust market, crypto market data aggregator CoinMarketCap ranked Gate.io as the 10th largest digital currency trading in the world by trading volume.

The exchange supports as many as 701 coins and operates over 1,300 markets. The trading platform is powered by the GT token, a cryptocurrency that is built and supported by the Gatechain public chain. The GT token charted a growth path, owing to the utility that has been built around it. Holders of the token can gain access to new tokens being launched on the platform’s platform for new innovative projects.

The growth of the tokens has been definitive surging from a low price of $0.257, the GT tokens have surged by over 1130% over the past year and are now trading above $3.20. The robust Initial Coin Offering and Initial Exchange Offering programs and the role of the GT tokens have boosted the positive outlook of the exchange, as recognized by third-party data providers like CoinMarketCap. Per the robust utility and the ecosystem backing the Gate.io exchange and its native token, the possibility to see steady growth over time is high.

Uniswap and the UNI Token

The Uniswap exchange is a DEX that is powered by the UNI token. The entire protocol is built atop the Ethereum blockchain and was the pioneer of the now popular Automated Market Maker (AMM) type of exchange.

While the liquidity in exchanges like the aforementioned three is provided by the platform itself, Uniswap relies on the users of its platforms to supply liquidity for the supported trading pairs. The exchange is DeFi in practice as users earn fees from the liquidity they supply. The UNI token is an ERC-20 that has a major role in powering the platform’s operations.

UNI has seen good growth since its inception surging from a low of $1.03 to its current price of $17.18. This represents a growth rate of 1,565%. The probability of further growth is high as the ecosystem is still gradually progressing.

PancakeSwap and the CAKE Token

PancakeSwap is also an AMM protocol like Uniswap but is native to the Binance Smart Chain platform. The exchange has grown as a formidable competitor to Uniswap, benefiting from the BSC’s lower transaction fee model and better scalability compared to other related protocols in the space.

PancakeSwap is powered by the CAKE tokens, a BEP-20 digital asset that is central to the growth of its underlying exchange. CAKE plays a key role in the swapping, liquidity provision and these utility has boosted the growth of the token since it was launched. CAKE is up 6344.4% from its All-Time Low price of $0.1944 to the current price of $12.49

Key Takeaways

Cryptocurrencies are now part of our everyday life. They are held as investment assets and finds commonplace as tradable assets. Cryptocurrency exchanges have helped power and redirect the evolution of these digital assets to bring out their true potentials. The exchanges themselves are powered by a native token, many of who have witnessed a growth that signifies a shift in demand for these asset classes. Of all, exchanges like Nominex, Binance, and others with their tokens have a particularly great chance of soaring as they offer a wide range of use cases to their global ecosystems.

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Andrew Smithhttp://thecoinrepublic.com
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing

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