Neo Boosts Trading with Binance Futures Contracts
NEO FCAS is up 10-points (1.14%) over the last two weeks, driven by a 28-points (3.84%) increase in User Activity. Price is up 46% over the same time period.
What is NEO?
NEO is a leading open source, smart contract platform based in China. The team is building a “smart economy” by combining digital assets, digital identification, and smart contracts into a flexible blockchain framework. Their platform supports a dual token economy, where NEO is a governance token used to vote for consensus nodes (which create blocks and determine service fees), and GAS is used to pay these service fees.
The blockchain launched in 2016 and is expected to upgrade to the third version of its software (Neo3) this year.
Consider Liquidity
NEO FCAS is up 10-points (1.14%) over the last two weeks, driven by a 28-points (3.84%) increase in User Activity.
On February 17th, major cryptocurrency exchange Binance launched a new futures product tracking NEO. The NEO/USDT futures allows traders to select leverage up to 50x. The fees that the exchange imposes on trades of the contract are a 2% base initial margin rate, 1% base maintenance margin rate and a 0.5% liquidation fee.
According to Cointelegraph, Binance decided to create NEO-based futures due to NEO’s strong liquidity. As with any investment, strong liquidity means one can buy and sell tokens quickly without a need to cut price or wait too long for the trade to be matched. In an effort to bring further liquidity to its exchange, Binance also launched its staking platform, which enables users to earn staking rewards simply by depositing and holding their NEO tokens on Binance.
Our Hot Take
Crypto liquidity is a telling factor of a project’s overall health. If a platform lacks available funds, the decentralized applications built on top of it will soon grind to a halt, affecting other projects and the network itself. An important indicator of a market’s liquidity is its 24 hour trading volume, which for NEO is currently worth $767M. This places the currency in 14th place in terms of 24 hour trading volume.
It’s interesting to note that the Neo platform initially suffered from a lack of access to liquidity, as its NEO and GAS tokens could not easily be used by smart contracts. The team thus issued new NEP-5-compliant tokens, pegged to NEO/GAS, thereby providing strong liquidity and relatively stable price within the contract.
