It cannot be easy to pick the correct crypto exchange for a coin or token project. Currently, there are more than 500 crypto exchanges. However, the consequences of deciding where to list must not be overlooked. On the one hand, investors are increasingly looking for highly liquid market areas to liquidate their investments. Listings, on the other hand, are frequently expensive.
So, what makes one exchange different from another? What are the factors that should be considered? How can you select the most appropriate deal for your project? Below is a detailed criterion on how to pick the best crypto exchange.
Pricing
The importance of price cannot be overstated. If you’re running a cash-strapped ICO, you might not have the USD 1,000,000 on hand to guarantee your token a spot on a tier-one exchange. If you intend to list multiple businesses simultaneously, you will end up with even less money. As a result, you should look at and compare listing prices. However, not all listings are created equal. Some exchanges token listing charge a one-time cost for lifetime listings, while others may levy recurring listing fees. Furthermore, make sure you and the business agree on what type of token you want to list: a utility or security token. This can result in significant price differences, and in the worst-case scenario, a security token could be a deal-breaker.
Liquidity
Although the listing price is usually directly determined by the exchange’s liquidity, liquidity is the second most crucial requirement for many crypto ventures after pricing. What kind of liquidity should you be looking at? Is it the amount of money that has changed hands on an exchange in the last 24 hours, a week, a month, or even since the beginning of the year? The consequences of such comparisons could be very different, and the decision-makers could have very different preferences. Therefore, looking deeper at the currencies and tokens driving liquidity on a particular exchange is also worthwhile.
For example, even if an exchange claims to have a lot of liquidity, but traders primarily trade in the BTC/USDT pair, it might not be the best exchange for the average token. The availability of trading pairs is frequently a determinant of liquidity. As a result, token projects should ensure that the most significant coins are available, such as ETH and BTC. Last but not least, keep in mind that liquidity data are almost usually self-reported, and even if they come from third parties, they are not audited in the traditional sense.
Reputation and Legal Issues
Once you’ve obtained all of the required information on pricing and liquidity and you’ve decided that they’re acceptable, try to learn as much as you can about the trading venue’s regulations. For example, inquire about the jurisdictional status of the exchange. You can also find out if the business is governed and, if so, who the governing body is. If all other factors were equal, choose a controlled exchange over an unregulated one.
Conclusion
To summarize, selecting the best exchange token listings for your project is a time-consuming and challenging procedure. There are numerous factors to keep in mind, and the importance of each change from project to project and token to token. As a result, choosing where to list your coin should not be done lightly. On the other hand, the factors mentioned above might come in handy.
