How to Avoid Paying Token Listing Fees to Cryptocurrency ExchangesJanuary 2, 2020
Blockchain Startups cannot afford to pay High fees to the crypto Exchange as they operate on a tight budget.
Blockchain and cryptocurrency space is seeing a surge in the number of crypto businesses with each business having its own crypto token. They first sell their tokens to investors to raise capital for the company and then use it within their platform’s ecosystem. However, the traditional method of launching one’s token through an Initial Coin Offering (ICO) has subsided after numerous scams in the past few years.
Companies pioneering these new technologies now rely on better and more trustworthy methods of fundraising such as Security Token Offering (STO) or Initial Exchange Offering (IEO). The latter in this case requires crypto startups to list their tokens on cryptocurrency exchanges as a part of their token launch. Following this, traders on that exchange can opt to buy the company’s token by investing the required amount.
As it is with IEOs, the bigger the exchange on which a company gets it’s token listed, the better are its chances of selling more tokens. But the downside to this is that with bigger exchanges come higher listing fees. Most startups cannot afford to pay these fees without disturbing the balance of their other business processes as they operate on a tight budget.
The problem with this is not only the fee but the fact that exchanges control which projects get a wider reach and which ones don’t. By doing so, they can make the whole industry highly centralized and act as the sole regulators of the industry to a great extent.
This problem needs an immediate solution. And it so happens that we have two — Decentralized Exchanges and DIY Exchange Kits.
Let’s see what they are and how they solve the problem.
Decentralized Exchanges Vs Centralized Exchanges
Decentralized exchanges are not controlled by any person or entity, hence, called ‘decentralized.’ Companies can easily list their token on these exchanges and anyone can trade these tokens on them without ever having to pay a fee for doing so.
Despite these great features of decentralized exchanges, they face a critical issue. Decentralization was the core idea behind the whole of the blockchain and cryptocurrency industry, but the current progress with decentralization is quite slow, especially in the case of cryptocurrency exchanges. DEXs also have low volume and high transaction fees with very limited Trading Feature.
On the other hand, centralized exchanges like binance, OKEx, Huobi, Poloniex, etc have large trading volume, high liquidity, a wide variety of trading features and other tools like Mobile apps and credit card option to manage investors’ funds.
While DEXs is a possible solution for startups looking to get their tokens listed without paying high fees, they lag far behind CEXs in terms of liquidity and necessary trading features. This leads the project to experience a considerably smaller reach and low trading volumes for their tokens.
Yet another drawback of decentralized exchanges is that they only support ERC20 tokens. In case of other types of tokens, they must be swapped against either Bitcoin – BTC or Ethereum – ETH.
Considering the above problems, it’s still better to choose a centralized exchange over a decentralized on.
So, let’s see how we can tackle the high-listing fee of centralized exchanges.
DIY Centralized Exchange Kits
When you don’t find what you need, you create it.
That’s exactly what DIY exchange kits help token creators achieve. They are a pack of tools and software solutions that startup owners in the crypto business can use to create and launch their own global centralized cryptocurrency exchange within a short span — maybe a day. Companies such as exBlock are a one-stop-shop for all these tools for setting up one’s own centralized exchange from scratch. More detail available at https://exblock.co/
Even this would require a small investment, but it is possibly a better idea to spend on creating an exclusive exchange for your token than spending millions to get listed. There’s also a risk of exchanges delisting you token at their own will.
With the exBlock exchange toolkit, it is simple to set up almost all premium features that global exchanges have. From multi-factor authentication to KYC, from infographic charts to features such as limit and market orders, you can have all of it in your centralized exchange created using the exBlock exchange toolkit.
This is an efficient way to sell your token as you would have your token listed on your own exchange and can also use the remaining amount on marketing your token offering or product.
Centralization has taken over decentralization in the cryptocurrency space. Already established centralized exchanges enjoy the benefit of authority and push projects to either pay a high fee and gain exposure or stay debarred from reaching the mainstream audience.
This can only change when projects take authority over their own tokens. And creating an exclusive centralized exchange using an exchange toolkit seems like the best option. Companies can list the token on their own centralized exchanges while marketing them to reach their target audience without having to pay high listing fees to any other exchange.