The CEO of Binance, one of the leading cryptocurrency exchanges, shared his thoughts on the token economy to explain how finance works in the emerging new cryptocurrency industry.
According to Binance’s blog post of July 18 Changpeng “CZ” Zhao noted that it makes more sense to convert fiat currencies to cryptocurrencies like Bitcoin and Binance BNB’s native token. Because the exchange fee on exchanges It is much cheaper than what would be charged with credit cards.
Possession and burning are positive for the token economy
Zhao noticed that a team that has its own tokens shows more engagement in the project. In the meantime it is “Rebuys” before burning the native token only show that your token has no real use cases. He gave an example in another Exchange token array that:
“Some exchanges even proudly (or obviously) promote the fact that they ‘buy back’ their own tokens from the exchanges before they burn. And unfortunately, some people may think it is a good thing. It would mean, firstly, that they have no income “through the exchange’s own token, which means that people don’t use their tokens to pay commissions. Second, they don’t have their own tokens that they receive. They all throw them on the market.”
Zhao says burning tokens, like airdrop, is good for the token economy. Because a burn has fewer transactions and fewer commissions online.
The red flags to watch out for
Zhao continued to reveal Some of the signs to look out for Assess how successful a project’s token economy can be. The issue of multiple tokens, the low circulation of a token, the large stock of the team token and too often changes in white papers are all negative signs to watch out for.
As Cointelegraph previously reported, The price of Binance Coin in Bitcoin rose almost 20% in July, which is optimistic about the IEO token price of the exchange.