As a new cryptocurrency project, it is important to build a solid base of users and investors to support your project. This makes cryptocurrency exchanges an integral part of any new altcoin looking to grow its base, as exchanges provide liquidity, access to millions of traders and investors, and market exposure. Getting listed on a cryptocurrency exchange can not only be difficult, but it can also be extremely costly.
Traditional – Fee Payment
The most widely utilized method exchanges utilize to list new coins is through a fee for listing. It has been reported that most exchanges charge in the range of $500,000 to $1 million in fees for listing a new cryptocurrency, making it economically impossible for new coins to get listed without having significant financial backing.
This traditional model works well for those altcoins which can pay the fee and gain exposure in new markets with a growing investor base, but it does nothing to support coins which might be popular and traded heavily by investors, but don’t have the ability to pay these fees.
An alternative and more democratic method of listing new coins has been utilized by several exchanges in an attempt to move away from the exorbitant fees traditionally paid by altcoins. Voting processes in which exchange users and token holders can vote on their favorite new projects to be listed are being implemented with great success.
Exchanges like Binance and KuCoin utilize this voting process. Additionally, a new and upcoming exchange in Europe, ETERBASE, currently has voting open for pre-listing new coins for free on its exchange which has yet to be released to the public.
Who has the power?
In the traditional, fee structured model, cryptocurrency exchanges have all of the power in deciding which altcoins will be listed to their exchange. The addition of voting by exchange participants democratizes the listing process in a fair, democratic way, more in-line with the values of the cryptocurrency industry.
Dan is a freelance cryptocurrency and blockchain content writer. He has written content for startups, ICOs, financial planners, venture capital firms, and more. Previously he founded an e-commerce company that grew to $1 million in revenue and profitability in less than 3 years. Dan has a degree in Economics and Finance from Bentley University.