Despite the price of bitcoin staying relatively level in 2019, the exchange tokens are greatly outperforming the market, growing 225% on average from the beginning of the year.
Virtually all Asian exchanges have issued their own token which gives holders certain advantages. Exchanges based in the U.S. and Europe have so far avoided the Asian trend; perhaps over concerns regulators would consider the exchange tokens securities.
The most common use-case of exchange tokens is a discount on transaction fees on the exchange. The utility of the tokens varies widely by the exchange though. Some other use-cases include:
- Ability to participate in Initial Exchange Offerings (IEOs)
- Gas to participate in a decentralized exchange (DEX)
- Governance — voting rights on which token will be listed
Some exchanges (Binance, KuCoin and Bibox) also destroy their tokens on a quarterly basis depending on how much profit the exchange brings in.