{"id":25289,"date":"2020-05-06T11:20:00","date_gmt":"2020-05-06T09:20:00","guid":{"rendered":"https:\/\/crypto-economy.com\/?p=25289"},"modified":"2020-05-06T11:20:00","modified_gmt":"2020-05-06T09:20:00","slug":"exchange-based-tokens-why-where-and-how-to-use-them","status":"publish","type":"post","link":"https:\/\/crypto-economy.com\/exchange-based-tokens-why-where-and-how-to-use-them\/","title":{"rendered":"Exchange-Based Tokens: Why, Where and How to Use Them"},"content":{"rendered":"

As crypto exchanges are getting their hands on the cryptocurrency industry, trading alone is no longer enough for them. Therefore, some exchanges issue their own tokens and become platforms for tokensales<\/strong>. In a way, this major trend in the world of cryptocurrency has even become tempting for traditional brokers. <\/p>\n

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Native tokens provide liquidity and help exchanges to increase revenue<\/strong>. Besides, they add to marketing value, act as a catalyst for the life of the entire system, and attract the attention of many potential users to the platform. <\/p>\n

Users purchase or earn cryptocurrency exchange tokens to earn passive income or minimize transaction costs. Let\u2019s break it down to see how they work, and go over native tokens with the highest potential.<\/p>\n

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Why Do Exchanges Create Tokens?<\/strong><\/h2>\n

There are thousands of tokens in the industry. Some of them are intended only for users to be collecting money and trading. Along with that, there are coins that solve completely different problems. They are also called utility tokens.<\/strong><\/p>\n

In fact, the difference between a utility token and an ordinary token is quite vague. To oversimplify, utility tokens ensure the viability of the system, without necessarily carrying out an investment-trading function. In practice, most often there are \u201chybrids\u201d that help you save funds and work both in- and outside the ecosystem.<\/p>\n

With the development of the crypto industry, the line between utility tokens and cryptocurrencies has been blurring and ultimately totally disappeared.<\/strong> While previously exchange tokens were used only for a specific purpose, for example, discounts on trading fees, now it is difficult to distinguish them from other cryptocurrencies.<\/p>\n

Native tokens usually exist only within a single system and are used for basic tasks like buying a product or service. More generally, they give the holder the right to participate in the project (use its services, vote for its management, and updates). For example, decentralized Uber tokens can buy users a ride. <\/p>\n

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The Functions of Utility Tokens<\/strong><\/h2>\n

Cryptocurrency exchange tokens play an important role in creating, maintaining, and updating the crypto platform they serve. Therefore, they can be regarded as a source of vitality that supports parental blockchains.<\/p>\n

Typically, exchanges issue their coins to increase the loyalty of users<\/strong> enabling them to take advantage of their discounts and special offers. The exchanges\u2019 assets have their own unique features defined by its parent blockchain, and are used in a variety of ways:<\/p>\n