Analyzing Crypto Exchanges
As your progress through your ICO roadmap, there will hit a point where you have to decide whether to list your coin on an exchange or not. In a previous article, we discussed why it was so crucial for ICOs to list on an exchange. Basically, it helps attract investors to your project by allowing for easier liquidity, more validity, and it can help raise the price of your coin. So now that you know why you need to choose an exchange, we’re back to discuss how?
There are hundreds of exchanges out there, and they all claim to offer a different user experience. So, once you’ve decided that you’re going to list with an exchange, you’ll want to do some research into which exchanges you want. Therefore there are going to be a few different factors you need to include in your research.
- ICO or STO
First of all, you need to look at whether your token is a utility token or a security token. This is the first important step because if it’s a security token, it has its own set of exchanges that it can be listed on, it can’t be listed on most of the regular exchanges that you can look at on sites like Coin 360, Coinmarketcap, or Coingecko.
2. Location of Token Sales
Every country has different ICO and STO regulations and even some countries, like China, have banned the sale of ICOs altogether. Knowing what the regulations are in your country of sale is incredibly important as is researching which exchanges are available for use in your country of sale. You don’t want to choose an exchange and become excited about your sale only to find that that exchange is banned or heavily regulated in your country, thus negatively impacting your sales.
3. Currencies offered
You want to make sure to choose an exchange that offers trading with your base currency, meaning the currency upon whose blockchain you built your platform. This isn’t necessarily so imperative for those who built their platforms on the Ethereum blockchain or maybe EOS or Stellar as those kinds of currencies are almost always traded. But if you’re building your platform on a smaller, more niche blockchain, you’ll need to pay attention to which crypto exchanges offer trading with your base currency.
4. Trading Volume
This is one of the most important factors because it can affect a lot of different things. We recommend using different comparison websites as they can report different information. It was revealed that exchanges were inflating their trade volume in order to be listed and stay towards the top of the list on different sites. There also is still speculation that volumes are still faked, but the adjusted tool should help you see which exchanges are generally truthful.
Also, why is trading volume even important? Well, trading volume is an indication of, firstly, popularity, and secondly, liquidity. A more popular exchange is going to allow for faster trades, and a liquid exchange is going to allow for a higher variety of trades. Your project will need to decide your budget for listing fees, as the more popular exchanges usually have higher fees, but are also more reputable and (generally) more secure.
5. Security
Piggybacking on what was mentioned under the last section, you also need to look at the security of the exchange. So you’ve found a few that fit all of your team’s criteria for the previous requirements, but then you google the exchange and find that they’ve been hacked quite a few times in the last few months or years and the hackers made off with considerable sums. When hackers do this, it means that the users of the exchange lose their money, and if you should choose an exchange that seems less secure, you could be looking at fewer investors because they don’t trust that platform to do right by their money. You’ll want to use an exchange that has good security so that your project as well an investors feel comfortable using it.
These are just a few factors of the exchanges that you should look at when looking at what exchange to choose. Utilizing the several comparison websites that are available can be an incredibly useful tool to use while completing your research, and we recommend that you use it to start your initial inquiry.
Does all of this research seem overwhelming? Well, it doesn’t have to be! AssetRush is always here to help yours through this process as well as the whole ICO/STO promotion process. You don’t have to be an expert, because that’s our job. Head on over to our website to see how we can help your token promotion. You can contact us through our website, our Telegram, or send us an email at support@assetrush.com. Help us, help you.
