The value of their tokens has risen in recent months along with the wider cryptocurrency markets, and it has changed the narrative that these tokens were originally intended for.
Bitcoin (BTC), Ether (ETH), and other cryptocurrencies have grown significantly over the past six months. This is partly due to the fact that large institutional investors are finally purposefully entering the markets. Grayscale Investments, MicroStrategy and Tesla were among the biggest names making major acquisitions of Bitcoin and other cryptocurrencies, leading to new values that rose over time.
This has affected several tokens that either manage cryptocurrency exchanges or – like Ethereum transaction processing fees – fuel the underlying blockchain.
Exchanges that use their tokens to manage their ecosystems have also seen a rise in the value of the base cryptocurrency. Two prime examples of this are Binance’s Binance Coin (BNB) token, the decentralized financial platform’s UNI token Uniswap, and the exchange symbol OKB OKB.
BNB increased from $ 38 per token on January 1 to a maximum of $ 335 on February 19. Likewise, UNI increased from $ 4.90 per token on January 1 to just over $ 35 on March 22, which is also generally available. Time is high. Since the start of the year, OKB has tripled its estimate from $ 7 to $ 21 by Feb.22.
Before we take a closer look at the price increases of these cryptocurrencies, let’s take a look at the basics of cryptocurrencies.
What is the change symbol?
Cryptocurrency exchanges fulfill a number of important roles for the platforms they operate on.
First, they can increase liquidity and trading activity. Liquidity in a stock exchange means the ability to convert a token into another currency or fiat currency. Exchange tokens can be used as an incentive to increase liquidity on the exchange by awarding bonuses for volume traded or for users who play tokens.
Exchange codes are also used to offer discounts on commissions to traders and users. This usually means that users receive discounts when paying commissions using cryptocurrency on a central or decentralized exchange.
Some cryptocurrencies act as the fuel that propels the stock market by allowing users to participate in governance mechanisms (such as voting) or offering exclusive benefits to their owners.
Take BNB for example. It is a tool for transactions on the Binance Chain, while at the same time it is used to pay exchange transaction fees.
Is the exchange symbol a good investment?
While it serves a number of purposes on its platforms, the rapid increase in its value across the ecosystem raises the question whether the token will now become a viable investment for users.
The nature of a particular symbol and the role it plays in an ecological exchange system also affect its value and the possibility of increasing it over time. “There has been a gradation of types of using exchange-only tokens for tax exemptions and other real value benefits,” Todd Crossland, founder and CEO of cryptocurrency exchange CoinZoom, told Cointelegraph.
Fringe benefits also increase the value of these various tokens through rewards, discounts and other incentives, as Crossland explains in his correspondence with Cointelegraph.
According to Jonathan Leung, CEO of BTSE Cryptocurrency Exchange, the utility of exchange tokens like BNB and UNI is the driving force behind their valuation. In the case of BNB, Leung highlighted the fact that the swap token also became a distinctive token for the instrument with the launch of Binance Chain. Essentially, this made BNB tokens equivalent to Ethereum ETH tokens used to pay gas fees.
While there appears to be a growing awareness that well-known exchange tokens can become viable long-term investments, these tokens are also subject to the same volatility as Bitcoin and other notoriously known cryptocurrencies. As Leung emphasized in his comments on Cointelegraph:
“The volatility can be explained by the fact that everything is really relevant and that the benefits of DeFi are really showing and that people are seeing the potential of things like Uniswap and Curve and Aave and Saffron and everyone else. I think that’s why it’s a big wave, so much money comes in – it’s A bullish cycle. This is a new high-speculation technique that can explain volatility as well. ”
A Binance spokesperson expressed the exchange’s confidence that the value of BNB will continue to grow as more applications and projects are launched on Binance Smart Chain: “BNB use cases have expanded to hundreds of applications across many platforms and projects within the crypto ecosystem … the exchange spokesperson added:
BNB is used to pay transaction fees on Binance.com, Binance DEX, B.