Watching the cryptocurrency markets the last month has given everyone a scare. However, there are many options in the crypto space that are coins directly linked to exchanges, so you receive a passive income regardless of the market fluctuations. Among the many options which is the best passive income, exchange coin?
Exchange Coins Paying Dividends
Everyone dreams of a passive income where you can sit back, and the money flows in with little oversight. Well, in reality, this is exactly what the exchange coins of the many cryptocurrency exchanges specialize in. Exchanges, to raise money for their platforms and advertising, have sold coins through ICOs in the past.
Now, these coin holders have a right to future commissions collected by the exchanges, providing a passive income to all coin holders. Some coins pay dividends daily, while some pay weekly or monthly. The percentages vary significantly between the different coins with the most active exchanges having the coins with the highest market caps. As more traders sign up and the volume of the crypto market continues to build, the value of exchanges and their coins will also trend North.
The coins the King has selected for review are; BNB, KCS, COSS, and the new Huobi ICO.
Binance Token: BNB
The Binance token (BNB) is based on the ETH platform (ERC-20) with a fixed supply of 200 million coins. Half this total number were sold during their ICO, and it is primarily traded on Binance. Binance is one of the top-rated exchanges on the market currently. They allow up to two BTC per day withdrawals without verification, or up to 100 BTC daily with verification. If you trade on Binance, it is important to purchase BNB immediately.
By owning BNB, you decrease the cost of your transactions by 50 percent, which includes exchange fees, withdrawal fees, and listing fees. A lovely bonus of owning BNB is it reducing the traders cost to trade, but another positive is you receive regular dividends. Therefore, if you own BNB, not only does it save you money on each of your personal trades, but it also earns you a passive income based on the total exchange volume.
Binance also specializes in burning BNB tokens every quarter until the total supplies shrinks back to 100 million total tokens. As more tokens are burned, supply decreases and the dividend is distributed among fewer coins, driving the value even higher.
Considering the extreme value, the token provides in decreasing one’s transaction costs by 50 percent while also providing a dividend, BNB is a must own for all Binance traders. The cost to trade on Binance is 0.1 percent compared to Bittrex’s 0.25 percent; this is actually very minimal in comparison. However, if you possess the BNB token, this 0.1 percent is halved to 0.05 percent. If you own BNB on Binance the same trade on Bittrex would cost, you 500 percent more. Even without factoring in the dividend this is a fundamental reason to own BNB. An added benefit of decreasing your cost of trading 50 percent is the dividend that is continuously growing due to increasing volume on the exchange over the last six months (and regular BNB token burns).
BNB is a must own for all traders on Binance even if you are not interested in the passive income it provides. With a market cap of approximately $690 million and a coin value of $6.99, BNB should be a staple in all Binance portfolios.
KuCoin Shares: KCS
KuCoin Shares (KCS), is as you guessed, the KuCoin exchange token. There are many overlapping similarities between KCS and BNB regarding their formats. KCS is an ERC-20 token as well. Similarly, there were 100 million tokens distributed during their ICO. The breakdown of the trading service fee on KuCoin is; ten percent to KuCoin, 40 percent to the referred individual, and 50 percent to KCS holders. If you chose to refer a large number of traders to KuCoin prior to their halting the referral program, you’d be receiving 40 percent of their trading fees. If you own KCS, you receive 50 percent of the trading fees for all volume on the KuCoin exchange. The remaining ten percent is KuCoin’s portion.
It seems the highest value is owning the KCS token as long as volume continues to build on KuCoin. BNB has more benefits to holders who also trade on their exchange. KCS doesn’t benefit the holder in the sense of decreasing costs to transact similar to how BNB lowers the costs to trade by 50 percent. However, as more and more individuals are fascinated with crypto markets and these exchanges continue to build volume, coins like KCS should be held even if you are not active on KuCoin.
KCS has a market cap of approximately $435 million with a value of $4.78 per token. Binance has more volume and provides a greater value if you are active and own the BNB, but KCS delivers a higher percentage dividend based on total volume. Your passive income will be higher from KCS, while your benefit for holding and trading will be greater for BNB.
Currently, COSS is valued at $0.45 per coin and has a market cap of $29 million. This coin is a small cap when compared to BNB and KCS. COSS also has much lower daily volume than both BNB and KCS. However, with lower volume comes more incentives to begin trading, and a great dividend program. COSS is a centralized exchange that pays COSS coin holders 50 percent of total revenue at the end of every week (on Sunday). This is a nice dividend and will only continue to grow as COSS grows in popularity.
Remember exchange tokens are tied directly to the volume traded on them; this is the main reason BNB and KCS have market caps more than ten times that of COSS. COSS is very active on social media as they were alleged to be a scam shortly after their ICO which they have dispelled repeatedly. Since, they’ve maintained a functioning exchange platform with a peak in price January 15, 2018. The COSS coin becomes a valuable asset if crypto markets continue to drive in new traders.
When compared to BNB and KCS it seems like the third best option due to the volume traded on the COSS exchange and the popularity of both Binance and KuCoin. COSS may have a great future ahead of it, but it is competing with multiple platforms in an already crowded space to attract the attention of traders.
Huobi is launching a token but is clearly claiming it is not an ICO. The manner in which you go about procuring the token is ingenious enough to avoid the tag “ICO.” Having been one of the top cryptocurrency exchanges out of China, they have been very careful with how they phrase everything from their exchange platform to the naming of their token sale event. Huobi committed to the ERC-20 standard supported by the Ethereum blockchain; this was an interesting choice as NEO is more popular in China and has an almost identical platform for functionality.
Huobi has reiterated repeatedly that the token launch, “is not an initial coin offering.” Instead 300 million HT (Huobi Tokens) will be provided to users who purchase a service fee package at a discount on Huobi Pro using Tether (USDT). USDT is a cryptocurrency pegged to the U.S. Dollar but is currently embroiled in a scandal of their own (is there really $3 billion in trust, and if so prove it!). Huobi is an exchange based out of China which is even more concerning as China revealed the final, ‘Nail in Coffin,’ plan to use the, ‘Great Firewall’ to block bitcoin and crypto-related websites on February 5.
The Huobi token issuance, or ICO (they wouldn’t want you to call it that), is moving forward regardless of the fact that Tether may not be pegged to anything and that China as of February 5, 2018, clamped down on cryptos even further. Previously there were restrictions in place to protect investors from ICO fraud, but this ban has a much wider sphere of influence. To avoid China’s original crackdown on domestic exchanges, the founder of Huobi, Leon Li, stated how they shifted their model to an over-the-counter (OTC) trading model while focusing on overseas markets. Their trading book service was shuttered on September 15, and their OTC service began November 1. The difference in those two weeks decreased volume to four percent of what it was on September 15. The impact of crackdowns on exchanges can be very significant depending on the country of origin of the exchange, and their target trading demographic.
Currently, the plan is to use HT to offset trading fees similarly to how BNB is used to halve Binance trading fees. Huobi has also stated they will buy back HT from the market with 20 percent of its net profit every quarter. If Huobi had a better set up dividend program and was not based out of Beijing, this would truly be an ICO (well token sale) the King would consider.
Conclusion: Best Coin Depends on Your Goal
In analyzing multiple passive income, exchange-based tokens it becomes clear there isn’t always the “perfect” coin. If you are looking for a coin to yield a passive income, there is one option. If you are looking for a coin to decrease your personal costs of trading dramatically, there is an alternative option. However, what is important to note is there are more dividend related coins out there, but if the volume is not on their exchange it does not matter if they pay ten percent or 90 percent of total revenue. Focusing on the purpose of why you are holding a specific coin will yield more benefits than deciding solely based on the highest dividend.
Best Coin for Traders: BNB
For those who actively trade the winning token to possess is the BNB. Binance already has fees that are very low when compared to most exchanges and by holding the BNB the cost to trade decreases another 50 percent while providing a nice passive income.
Best Coin for the Dividend/Passive Income: KCS
If passive income is your goal than the KCS token is the best choice in the short term as their dividend is the highest from a passive income standpoint, out of all the dividend-yielding exchange coins. Their volume spiked dramatically when Binance froze new users from signing up. Expect a significant pump from KCS if any of the major exchanges refuse new sign ups again.
If you actively trade and also want to enjoy a passive income, it is always a good idea to stay diversified and own both! This way you are not trying to predict the flow of volume on exchanges but instead are focused on both long and short-term picks, while decreasing your cost to trade and creating a passive income based on the dividend provided.
To read the King’s prior articles, to find out which ICOs he currently recommends, or to get in contact directly with the King, you can on Twitter (@JbtheCryptoKing) or Reddit (ICO updates and Daily Reports).
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