In the last lecture, I analyzed the "privacy currency" field in the blockchain industry. In this lecture, I continue to share with you the fourth sub-category in the "mature field of the blockchain industry": "Exchange platform currency".
I. What is exchange platform currency?
The "exchange platform currency" we are talking about here refers to the platform currency issued by a centralized exchange. There are already countless exchanges on the market, and the slightly more well-known of these exchanges have issued their own platform coins. These platform coins are usually linked to their own earnings and various rights by the exchange.
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Since the birth of Bitcoin, various types of digital currencies have emerged endlessly, and exchange platform coins are one of them. The exchange platform coin was first born in 2013 and was issued by the bit era at that time. Holders can enjoy dividends according to the proportion they hold. But unfortunately, this model was not well recognized in that era and therefore did not develop.
After that, Binance Exchange issued its own platform coin BNB in 2017. Not many people are optimistic about BNB at first, so they have been left out for a while. However, the currency price of BNB has skyrocketed, which has led to the other two front-line exchanges Huobi and OK to follow suit and also issued their own platform coins HT and OKB.
The platform coins issued by major exchanges are almost based on the ERC20 standard of Ethereum. The rights and benefits enjoyed by various platform currency holders are different, but generally have the following common features:
1) As a service fee for intra-platform transactions, there are usually certain discounts or discounts.
2) As an intermediary, conduct currency transactions with other Tokens.
3) Used to participate in platform activities, such as receiving airdrops, voting before launching new tokens, prioritizing subscription of newly launched tokens, etc.
4) On-chain fuel fees for future decentralized trading platforms (can be understood as the fees paid to miners).
5) Use as a payment tool: Some merchants and service providers accept certain platform coins as payment tools.
6) As IEO or even 1CO-like financing tokens in the future.
2. Why the exchange platform currency is just needed
No one can deny the importance of the exchange. For a long time now and in the future, for ordinary people, both investors and practitioners in the blockchain industry, need a medium to access various digital currencies. The exchange is the medium.
There are currently two types of transactions, centralized exchanges and decentralized exchanges. Decentralized exchanges cannot fulfill the heavy task of connecting ordinary people and digital currencies due to many technical and performance limitations. Therefore, for a long period of time, centralized exchanges will assume this heavy responsibility.
Therefore, centralized exchanges are just needed in this field. Then the platform currency that measures the value of the exchange is necessarily a rigid need for investment.
3. Mainstream coins in the field of "Exchange Platform Coins"
At present, there are a lot of exchange platform currency, and there are endless exchanges that plan to issue platform currency. But I think this area is also very mature and there are not many opportunities for latecomers. The main reason is that there is no technical threshold for the issuance of platform coins, and the dividend mode and price driving force of platform coins are similar. Simply put, the barrier to entry is extremely low.
So I think there are two main factors that determine the final winner of this track:
1) The reputation, trading volume, and technical strength of the exchange itself.
2) The continuous operation capacity of the exchange.
Let's look at the first point. The extremely low entry threshold for platform currency makes this field soon develop into the Red Sea. It's actually the Red Sea now. In a Red Sea field, the last oligarch left must be the one with the highest reputation, the largest trading volume, the most influential and the strongest in this field.
Look at the second point, the continuous operation capacity of the exchange. The technical threshold of a centralized exchange is not high, so in order to win in the end, it must have the ability to continue operations. A considerable number of exchanges closed in this round of bear markets because unsustainability cannot be sustained.
In 2018, FCoin, which was quite popular for a while, used the model innovation to make waves in the exchange, but in the end, this operation model was not sustainable and it was just a flash in the pan.
In addition, because the technical threshold of this field is very low, when the latecomers have any model innovation, it is easy to be imitated and learned by the oligarchs in this field, which causes the advantages of the latecomers to disappear quickly. And when there is any model innovation in the oligarch, it will actually widen the gap between the oligarch and the ordinary exchange.
There are currently three heads on the current track of the exchange: BNB, HT and OKB.
Risks of head exchanges and competitors
I analyze with you one by one what problems these coins face.
Whether in market value or marketing, BNB is a leader in the field of exchanges. BNB's current biggest risks lie in two aspects: one is regulatory risk, and the other is competition from decentralized exchanges.
Due to regulatory uncertainty, Binance has to find a foothold around the world, but the supervision of centralized exchanges is a problem faced by all exchanges, and there is no clear direction in the short term.
Decentralized exchanges are likely to replace the current centralized exchanges in the future. However, at present, decentralized exchanges are facing some technical difficulties, resulting in a very small trading volume, which cannot temporarily shake the centralized exchanges. But the speed of technological development is often unpredictable. Once a decentralized exchange makes a major breakthrough in technology, the real threat of a centralized exchange comes.
2) HT and OKB
HT is the platform currency of Huobi, and OKB is the platform currency of OKEX. They were issued immediately after Binance. The reason I put them together is because the various rights and characteristics of HT and OK are similar to BNB, and the difference between HT and OK is very small.
The risks facing BNB are both HT and OK. HT and OK are basically in step with BNB in terms of strategy, and they do not have much originality. And overall, whether it is market value, reputation or strength, the gap between Huobi and OK and Binance is very large. They may be overtaken by latecomers to some extent.
All three platform coins have been issued for a long time, have been operating for a long time, and have undergone various baptisms in the market. Therefore, these three coins are currently on the front line of platform coins. The gap between the other competitors and the three of them is very large.
My long-term bullishness in the field of platform coins is currently BNB, HT and OK. Their investment value is ranked as follows: BNB> HT> OK
V. Investment strategies in the "mature field" of the blockchain industry
So far, I have analyzed the thinking of the four categories in the " mature field " of the blockchain industry. Is this the only four categories I mentioned in this field? This is of course that benevolent sees benevolence and wise sees wisdom.
My analysis of each category in the sharing of these four categories is:
1) What is this category?
2) Why is this field just needed
3) What factors must be considered in order to gain a head position in this category?
4) Why is it difficult for latecomers in this category to have the opportunity to achieve overtaking in corners?
5) What are the heads in this field?
6) What are the risks of these heads?
7) How is the investment proportion of these heads distributed?
I hope that investors can refer to this set of ideas to explore whether there are other areas that have such characteristics in the existing more than 2,000 digital currencies and can directly grasp the oligarchs.
I have always thought that the "mature field" of the blockchain industry is very important for most investors. Because the risk in this field is the smallest, and although the rate of return is no more than a hundred times and a thousand times, it is quite high compared to many other investment products. Therefore, for most ordinary investors, it is very worthwhile to invest at least 50% or even 100% of the total amount in this field.
In this field, I have listed four categories: currency, smart contract, privacy currency and exchange platform currency. I also prioritize investment in these four areas, the order is as follows: currency type> smart contract> privacy coin> platform coin