Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => DeFi tokens => Topic started by: 7even on September 27, 2024, 01:00:39 PM
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I understand the concept of native tokens on a lot levels and how it benefits an ecosystem but what I don't really understand is the concept of trading the token outside of the ecosystem.
For example a lot of DEX aggregators or swap platforms have their own native token and most of them are listed on variety of exchanges but for what purpose? Is it just for profit trading purpose or what else?
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Is it just for profit trading purpose or what else?
Exactly!
Under the core of producing liquidity, the only thing they have actually produced is money for the ones creating it.
Since pools are correlated and intervened the whole liquidity is just a disguise on numbers as it's anyhow either natural so there is no need for it or artificial meaning they are affecting others.
Imagine every bank and every forex trader would have its own token! ;)
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Yeah, profit is one but not the most important reason instead, it is for exposure. When an exchange token gets listed on other exchanges it basically turns attention towards them especially if the token is doing well. Look at ZCX as an example. It recently got listed on Bitget and has a pretty positive price trend, which means people are going to be holding it and out of those people, some will want to make use of the tokens features, which is good news for the DEX, simple.
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For example a lot of DEX aggregators or swap platforms have their own native token and most of them are listed on variety of exchanges but for what purpose? Is it just for profit trading purpose or what else?
not only for profit but also for liquidity as listing native tokens on external exchanges increases participation and activity of that particular token it might also increase the value if it gets more exposed to other users
and some do not just use native tokens to earn incentives within their ecosystem because some may actually treat it as an official long term investment
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I understand the concept of native tokens on a lot levels and how it benefits an ecosystem but what I don't really understand is the concept of trading the token outside of the ecosystem.
For example a lot of DEX aggregators or swap platforms have their own native token and most of them are listed on variety of exchanges but for what purpose? Is it just for profit trading purpose or what else?
It is for profit trading purposes, and well as for accessibility, not just to traders and investors, but also to gain access to lots of liquidity to enable easy buying and selling in large quantities.
You and I know that as much as Dex platforms are trying their best to offer a good exhchage services and trading experience to users, they still can not boost of the kind of liquidity that is available to and on Cex platforms, especially on top cex exchanges like Binance, bybit, kucoin and the rest, without good liquidity, it's literally impossible to buy and sell a token in large quantities, so this is one of the benefits projects enjoy when they list their token outside the Ecosystem.
- The token becomes available and accessible to lots of investors and traders.
- And the token gains more liquidity for buying and selling in large quantities.
- And good liquidity also helps to make the price of the token a little more stable.