Utility of Exchange Coins Explained

Exchange coins are native tokens issued by cryptocurrency exchanges.

Definition and Purpose

Exchange coins are native tokens issued by cryptocurrency exchanges. They serve various purposes, including reducing trading fees, participating in token sales, and earning rewards. Popular examples include Binance Coin (BNB) and FTX Token (FTT).

Fee Reductions

One of the primary utilities of exchange coins is offering reduced trading fees. Users who hold and use these tokens for transactions on the exchange can benefit from significant fee discounts, enhancing trading efficiency.

Participation in Token Sales

Exchange coins often provide access to initial exchange offerings (IEOs) and other token sales conducted on the platform. Holding these tokens can grant users preferential access and better rates during these events.

Staking and Rewards

Many exchanges offer staking programs where users can stake their exchange coins to earn rewards. These rewards can come in the form of additional tokens, interest payments, or other benefits, incentivizing users to hold and use the tokens.

Utility Beyond Exchanges

Beyond trading, exchange coins can be used within the broader ecosystem of the issuing exchange. This includes accessing decentralized finance (DeFi) services, participating in governance, and using tokens in various exchange-related applications.

For more detailed information, you can refer to the original articles on Cointelegraph.