Platform coins are digital assets issued by cryptocurrency exchanges. Cryptocurrency exchanges may issue their own tokens for a variety of reasons. Most platform coins are usually used as rewards to incentivize traders to bring more liquidity to the exchange, or as discounts on trading fees to incentivize traders to conduct more trading activities. In addition, the platform currency issued by the exchange can also be used to promote the community governance of the exchange.

Liquidity Incentives

Cryptocurrency exchanges may use their platform coins as an incentive method to motivate traders to contribute to the market Bring more liquidity. For example, under normal circumstances, DEX will distribute its platform coins as rewards to traders who provide liquidity to the pool within a specific period of time to attract traders to help DEX increase the liquidity of the pool.

Trading Activity Incentives

Cryptocurrency exchanges often require traders to pay trading fees when executing orders. In most cases, to encourage trading activity, users receive fee payment discounts from exchanges when paying trading fees using platform coins. In addition, some exchanges may provide users with tiered fee discounts based on the number of platform coins they hold in their account.

Promote governance

Crypto exchanges may distribute platform coins for governance purposes. Platform currency holders will have voting rights for the future development of the exchange. While this use case is not as common as others, many DEXs have issued their platform coins to complete their transition to community-operated exchanges. For example, Uniswap’s $UNI.

What is Uniswap? What makes it a top project in the crypto market? Please refer to the "What is Uniswap" entry.

Other

In addition to the above fee discounts and voting rights, platform currency holders may receive other rewards or right. For example, for holders who hold a certain amount of platform coins during a specific period of time, the exchange may provide them with the opportunity to participate in the project's IEO.

Some cryptocurrency exchange platform coins

• BNB: Build and Build ($BNB), formerly Binance Coin, initially as Binance The exchange token is issued and can be used to trade cryptocurrencies and pay fees on the Binance exchange. Subsequently, $BNB was also used as the native asset of BNB Chain.
• OKB: OKB is a cryptocurrency issued by the OK Blockchain Foundation and Maltese cryptocurrency exchange OKX.
• KCS: KCS is a platform currency in ERC20 format launched by Kucoin cryptocurrency exchange in 2017.
• LEO: UNUS SED LEO. LEO is the utility token for Bitfinex and other iFinex trading platforms. iFinex Inc. (iFinex) is a privately held financial technology company that operates a virtual currency trading platform under the trading name Bitfinex and provides numerous other cryptocurrency and crypto-asset related products and services.

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