For the past few months, investors have been scrambling to buy stocks of centralized crypto exchange (CEX) before the forthcoming Coinbase listing on NASDAQ. Added to that is Coinbase’s report that it raked in $1.8 billion revenue between January and April of the year.
Now, decentralized finance (DeFi) and well-known decentralized exchanges (DEX) such as Uniswap (UNI) and PancakeSwap (CAKE) have become investors’ choices. Also, huge transaction costs and poor liquidity that are linked to different blockchain platforms show that most traders prefer to stay with CEXs because of their fairly low costs and relatively better security.
Binance Smart Chain capitalizes on Ethereum rising transaction costs
Although Bitcoin, DeFi tokens and some altcoins have now grabbed the headlines, exchange tokens have been silently accumulating profits since last year. Some of the prominent exchanges that have witnessed considerable profits over the past few months include Binance Coin (BNB), FTX Token (FTT), KuCoin Token (KCS), among others.
Binance remains the leading crypto exchange in the industry. The continuous rise in BNB, Binance’s native token by nearly 900% since February, is a testament to this fact. Moreover, the surge in the Binance Smart Chain (BSC) has added an impetus to the token’s growth.
While the Ethereum network keeps facing congestion and rising transaction costs, Binance Smart Chain has come to take advantage of the opportunity and provide more affordable fixed transactions that clients can use BNB to pay for.
The enhanced BNB functionality has boosted the demand for the token because it empowers the Binance DeFi platform and PancakeSwap DEX, which is now ranked fourth in the list of the largest DeFi platforms, based on the net value locked. This data was gathered from the DeFi LIama site.
Because cryptos trading volumes are increasing rapidly, it is highly likely that BNB will keep rising in value because the Binance ecosystem keeps growing while the Ethereum network is experiencing challenges of huge costs and scalability.
A look at the KuCoin, FTT, WRX Exchanges
KuCoin exchange is based in Seychelles and was founded in 2017. Its trading volumes started increasing rapidly in February as its bullish trend keeps gathering momentum till date. It has similar features to BNB. KCS has risen by almost 1,000% since February, climbing from $1.17 to $12.96 today, its record high since Jan 2018. KuCoin has taken advantage of DeFi growth as it lists well-known and new tokens which only Unisawap and Sushiswap would have provided.
Established in 2019 by Gary Wang and Sam Fried, FTT serves as the native token for the FTX derivatives exchange. FTT has grown in popularity this year, thanks to its collaboration with the Serum (SRM) decentralized exchange. FTT has risen by 750% since January, from the $5.68 low to $48.62 today. On Wednesday, FTT grabbed headlines when it declared that it was partnering with the Miami Heat NBA.
WazirX is an India-based crypto exchange which is part of the Binance platform that assisted in kicking off the launch with $50 million. WRX has been relatively slower than others discussed earlier. But the trading volumes have increased in April after WazirX announced its plan to begin a decentralized NFT marketplace. WRX has risen from the low of $0.5 in late March to $6.65 on April 6.