Are Crypto Exchanges Are Polluting The Cryptocurrency Market?
In the present crypto world, crypto exchanges play a critical and famous role. An enlisted exchange, on its approach to creating the way to liquidity rolls in money. For example, one of the quickest developing crypto exchange Binance brought around $2 billion up in just a half year.
Digital currency exchanges have different approaches to gain money among which listing the tokens of an ICO (initial Coin Offering) is one such lucrative choice. For a token to be listed on an exchange, it would cost one someplace around $50,000 to $3 million.
Nasdaq Capital Market charges about $55,000 to list up to 15 million shares. It is about same as its yearly fees to remain listed on the exchange.
Given the way that a token turns out to be more liquidity it offers which implies how simple it is for one to exchange them. Thus, an ICO is regularly judged to be fruitful on its exchange listing and a specific exchange also.
It has been accounted for by different media sources that crypto exchanges charge a million dollar for each ICO that even in some cases gets extended to a $3.5 million to get incorporated with a known mobile wallet.
The revenue structure of crypto exchange includes income from trading fees, deposit and withdrawal fees, and commission among others like margins from order matching and setting pricing plans to merchants.
A year ago was a major year for ICO with in excess of 900 gone live. The investors of these ICOs run with the conviction that their token will get listed on the exchange and they would have the capacity to earn on their investments.
The credibility and price of an exchange typically rely on its trading volume. As per the coinmarketcap that has around 200 exchanges listed, a standout amongst the most well-known Binance has over $1.5 billion trading volume with near 300 coins listed.
Another case is Bitfinex with the trading volume of $585 million with 50 tokens listed while Bittrex has the trading volume of $280 million and around 275 tokens.
Allegedly, in 2017 Coinbase made around $1 billion in profits and over $200 million were secured by Binance. Right now, all of the crypto trading that would be in excess of 98 percent is done on centralized crypto exchanges, for example, Bitfinex, Upbit, and Binance, where around 5 percent cut of the deal likewise goes to the advisors.
Charging a fee is right yet such a number is plain excessively. Millions only for a listing is totally out of line. Besides, a huge fee additionally negates the equivalent opportunity factor as each project can’t bear the cost of such an immense amount.
Nonetheless, the answer to this issue is the Decentralized Exchanges (DEX). Despite the fact that it’s as yet a new concept and in a development stage there are a couple of famous names in the market that is taking a shot at this innovative exchange platform, for example, Bisq, IDEX, Waves DEX and Ether Delta among others.
These exchanges offer the comparative services at a small amount of a price charged by centralized exchanges.
