Exchange Token
A token issued by an exchange to provide fee discounts, rewards, or governance rights within that platform's ecosystem.
Exchange tokens align user incentives with platform growth through fee rebates, tiered perks, and staking rewards. Some incorporate governance features for listings or parameter changes.
Holding an exchange token may reduce trading fees by placing the user in a higher VIP tier, or enable participation in launchpad token sales.
Risks include regulatory scrutiny, changing token economics, and platform dependence. Token value often correlates with exchange volumes and revenues.
A downturn in exchange activity can decrease buybacks and utility, weakening the token’s value proposition.
Related Terms
Cryptocurrency Exchange
→A platform that facilitates the buying, selling, and trading of cryptocurrencies. Exchanges can support crypto-to-crypto or crypto-to-fiat transactions and serve as crucial infrastructure in the digital asset ecosystem.
Token
→Tokens are programmable digital assets residing on a blockchain, often representing a variety of tangible and intangible assets.
Centralized Exchange (CEX)
→A custodial platform that matches orders and holds user funds.
All terms and definitions may update as the Cryptionary improves.
