Keep This In Mind: Why Exchange-Based Tokens?

Exchange-based tokens are no longer new. These assets that are native to individual cryptocurrency exchanges were introduced to bring benefits that help facilitate trading activities on respective centralized and decentralized platforms.

According to crypto data aggregator, CoinGecko, which tracks almost 200 of them, the combined market cap of the assets native to exchanges is about $77 billion as of August 2, 2022.

So, for anyone still wondering what the deal about exchange-based tokens is, even as they have now somewhat become an essential part of many crypto traders’ portfolios, here are three key highlights on why they exist:

1. As exchanges follow a competitive business model in which operators always seek to retain the loyalty of users, exchanges introduced their tokens to easily manage their in-exchange activities. Hence the first major use case for these tokens is to serve the exchanges’ ecosystem to pay for services and, where there are strong fundamentals, be used to hedge against market downtrends. These tokens are designed to provide various bonuses and benefits for using exchange tools and products — sort of an incentive to appeal to their users — as well as provide additional value to those holding native tokens in the form of privileges and discounts for trading fees.
2. Crypto exchanges are a form of business that facilitates the trading — buying and selling — of crypto assets. They achieve this main proposition by pairing a base currency against a quote currency in their listings. They also store digital assets for their users which has spurred exchange operators to develop several products in the process, including those that could help put idle assets into good use while providing holders with the opportunity to earn passive income e.g. staking. However, to make things easier in the face of increased activities within their exchanges, considering that they would not have a firm grip on third-party tokens listed on their platforms, their native tokens help lessen the burden of offering earning rewards and other additional claims.
3. Looking at it from another perspective, exchange-based tokens offer their trading platforms a convenient way to increase liquidity. Exchanges have to be liquid — to make it possible to quickly purchase or sell a digital asset. This ability gives an exchange, especially those that register huge trading volumes, a way to run smoothly while assuring users of the constant flow of transactions. Liquidity is connected to reliability. Exchange users would like to depend on a trading platform that has the infrastructure to meet their liquidity needs at all times with the best uptime including during extreme peaks of trading activities.

Low cap exchange-based tokens like $PROB

There are exchange-based tokens and there are low cap exchange-based tokens. The low caps are those which fall below $1 billion in total USD value. They have what it takes to swing in price movement at any time, and with the potential to rise in value in a very short period of time.

ProBit Global’s $PROB falls in this category. As you may have known, the exchange supports new blockchain projects in their journey to reach the world and remains the main gateway for altcoin gems to launch out for investor interest and gain exposure, and relevance. ProBit Global has thus far been offering incentives using its ecosystem’s native asset, $PROB.