Why do CEXs value TV so much?

[BitHunter]

Naturally, when there are good opportunities to trade every trader is inclined to do so but sometimes there seems to be more incentives to trade... Often times I see CEXs like Binance, OKX, Bybit , Bitget and more offering traders extra tokens when they trade up to a particular trading volume . Yesterday was a trading competition on the 4th exchange; where users could trade BTC/USDT or ETH/USDT on the spot trading from a daily prize pool of up to 500 BGB.

Personally, all these incentives are cool and are added icing on the cake if you can find a good entry and exit point. Cause the whole objective of trading is to end up with more value than you started right?

My curiosity stems from CEXs emphasis on TV though, why are they so important to them? Is it for bragging rights or where do the TV advantages set in?

[joniboini]

By TV, you mean trading volume right? I don't think that's surprising considering how many aggregators or websites like Coingecko use that metric to show how reliable the exchanges are. Higher trading volume means higher liquidity, so anyone can trade without fear that their order will significantly affect the market. Let's say you want to sell 10 BTC, you'd like to sell it on an exchange that can handle such volume without affecting BTC price too much or you will lose some profits from selling them. You need to see their liquidity to find an exchange that can do that, which probably means looking at their volume, order book depth, etc.

Obviously you should not put all your focus on trading volume, but for exchange it is a simple marketing strategy that works and quite cost-effective so they keep doing that. CMIIW.

[BitHunter]

By TV, you mean trading volume right? I don't think that's surprising considering how many aggregators or websites like Coingecko use that metric to show how reliable the exchanges are. Higher trading volume means higher liquidity, so anyone can trade without fear that their order will significantly affect the market. Let's say you want to sell 10 BTC, you'd like to sell it on an exchange that can handle such volume without affecting BTC price too much or you will lose some profits from selling them. You need to see their liquidity to find an exchange that can do that, which probably means looking at their volume, order book depth, etc.

Obviously you should not put all your focus on trading volume, but for exchange it is a simple marketing strategy that works and quite cost-effective so they keep doing that. CMIIW.

Thanks... That actually puts it perspective for me really... Knowing that it could actually affect individuals will fuel CEXs publicizing it...

[joniboini]

Yeah, it's nothing new. Just another trend like launchpad, ICO, and so on. That's probably the reason why Binance is buying aggregators like CMC so that they can push their exchange on top with new criteria and so on. I wouldn't be surprised if trading volume is no longer viewed as important in the near future, and people move their focus to other things like reserves, transparency, etc. As long as you don't fall for marketing trick, using these indicators are fine imo.