The crypto industry is full of new and innovative projects that spring up every day. One thing that many of them have in common is the desire to raise funds and awareness, which are crucial to success.
For a long time, one of the most popular ways to do this was to hold a token sale i.e have members of the public buy into the native token of the project to raise funds as well as drum up publicity.
These days, however, many of these projects are instead opting to have their tokens listed on exchanges rather than managing a whole token sale by themselves.
You might be considering getting a token listing for your upcoming project but might have questions. How many platforms should you aim for? Is it enough to simply be listed on Uniswap? How do you even get your tokens listed in the first place?
Why Do You Need to List your Coin?
Blockchain and crypto product developers spend small fortunes and jump through hoops to have their tokens listed on exchanges and there is a good reason for this.
- Price discovery: One of the biggest and most important benefits of listing your token on an exchange is price discovery. This refers to the setting of the market price of an asset based on the forces of supply and demand. When you put a token out into the market through an exchange, the price of said token is constantly adjusted automatically to meet the current demand and supply.
If you were to run a token sale yourself, you would set a starting price and have to adjust it over the course of the project’s existence to match the demand and supply in the market. But when it is listed on an exchange, this is done for you.
- Distribution/shareability: When you launch a new crypto project and want people to buy the native token, having it listed on an exchange is one of your best bets. This is because people tend to trust exchanges more than they do independent platforms. Asking people to buy your token from a reputable exchange will likely lead to a better response than telling them to sign up on your website.
- Marketing and communication: Having a token listed on an exchange provides a significant amount of publicity for the token itself and the project that it is attached to. From announcements across social media to the fact that many crypto investors learn about new projects from exchanges, getting the word out about your crypto project will be easier when it is on an exchange.
- Public visibility: Having a token on an exchange not only lets customers find it with more ease but also lets other firms discover it as well. Within the crypto industry, a token being listed on an exchange signals that it has gone through and passed a vetting process which earns it more trust.
For example, coin listing sites like CoinMarketCap and CoinGecko will not list a token unless it has already been listed on a number of exchanges. This is yet another reason to have a toke listed so as to gain access to these types of opportunities.
The Trouble With Third-Party Exchanges
When many crypto and blockchain entrepreneurs choose to get their tokens listed on exchanges, they typically opt for external, third-party exchanges.
The logic behind this is that these exchanges have a pre-existing userbase that will help their token find their footing within the crypto market.
However, there are a few issues with pursuing a listing on a third-party exchange. First, getting listed on a third-party exchange is not a cheap affair.
For the average project, getting listed on a major exchange can cost thousands of dollars in fees and other associated expenses. If you make use of a listing agent, they will take a percentage off the listing fee, which increases your expenses.
Additionally, the final cost of a listing is not known at the beginning of the process. Depending on a number of factors, including the popularity of the token, the volume of tokens released and so on, the cost of listing might end up being much more than expected.
Even if the said project is listed, there is no guarantee that it will be handled well. For a new project to receive the full benefits of being listed on a third-party exchange, it would need to be properly mentioned in press releases, on social media platforms, and on crypto-focused media.
This will require the project either already being an established one or a team to constantly follow up with the exchange. Needless to say, this route may not be the best for a new and budding crypto project.
Are DEXs the Solution?
In light of the many issues that sometimes come with listing a token on a centralized exchange, some entrepreneurs are considering listing on decentralized exchanges (DEXs) instead.
After all, listing a token on a decentralized exchange is usually free and also cheap in some cases depending on blockchain fees, and with the current popularity of DeFi, you could tap into an aggressive and passionate market of crypto lovers.
However, this might not be the grand solution that some make it out to be. First, having a token listed on DeFi exchanges and having it actually succeed will require substantial capital invested in market making.
Another downside to the low entry barrier for the DeFi space is that so many tokens are listed there constantly and to compete, a project would regardless require significant backing and budget to stand out.
Additionally, this means that for a token to be at the forefront of a DEX (such as having its logo displayed and gaining traction).
It would require high amounts of on-chain transactions (which is expensive considering blockchain fees on Ethereum today) and for this to happen, they would typically need to spend a lot of money on pre-publicity and promotions.
In the case of DEXs, there is more accessible but severe loss of branding control that can be detrimental to a crypto startup project.
Self-Created Exchanges: The DIY Crypto Solution for New Projects?
The two biggest issues that new crypto projects face when it comes to having their tokens listed is a lack of control over token branding and high listing costs.
These two issues, however, can be solved with the ownership of an exchange.
If the team behind a project owns its own exchange, they are in the driver’s seat of the listing, branding message, coin issuance rate and launch process.
First, they can cut costs by not having to pay for exorbitant coin listing fees and coin management costs associated with a third-party exchange. Once they own an exchange, all their projects are made significantly simpler and coins can be seamlessly listed for investors to buy into.
They likewise enjoy all the benefits of exchange association such as greater trust from the public and a more seamless purchase pipeline. Not to mention higher security as you aren’t trusting funds to a third-party.
This trust is typical because having a token listed on an exchange implies that it has been verified and legitimized by an institution. Having ‘infrastructure’ (the exchange) grants legitimacy and trust because the infrastructure indirectly upholds the perception of the value of a coin or coins listed on the platform.
However, some blockchain entrepreneurs are discouraged from pursuing their own exchanges due to their perceived technical requirements.
In reality, you don’t necessarily need to know how to build a crypto exchange before you can own one of your own. This is the same way you don’t need to know how to code a website from scratch before you can start your own website or eCommerce platform.
You only need to think of Shopify as an example which has made it easy for anyone to start a store online. Thanks to the abundance of open-source software on the market, entrepreneurs can create their own crypto exchanges or other blockchain-related projects with ease. Even NFTs are in the realm of possibility.
If an entrepreneur chooses to use cryptocurrency exchange software, they can have their projects listed on an exchange within days.
They will also enjoy a lot of fine-grained control over the token rollout or issuance process and is often much simpler than going with a full out blockchain issuance. Instead it can be internally issued as a first step.
These steps can include the dates that the token is listed on, the price set, the purchase requirement, and so on. They will not have to consult anyone to put any of these processes in the pipeline and instead can self-execute on all these sensitive and important processes.
You can also customize your exchange as you like. We all have our preferences when it comes to exchanges, from their colour scheme to their login process and you can create a custom exchange that is tailored to both your and your customers’ tastes.
You will also have direct access to your investors and can put out statements, receive feedback and make adjustments when needed without interfacing with middlemen and third-party exchanges.
When looking into how to start a cryptocurrency exchange, however, you will likely come across many white-label exchange platforms.
As more and more entrepreneurs are seeing the benefits of having their own exchanges, more options are popping up to accommodate this growing need.
When you begin your search, make sure to seek out crypto exchange software kits that offer features that meet your specific needs.
Take HollaEx for example, a white-label crypto kit that allows you to self-assemble your own exchange platform. It is designed to not just launch crypto exchanges and coins, but also allows businesses to connect to the whole world through blockchains.
For example, many businesses that launch tokens and coins can also offer NFTs for sale or they may develop their own metaverse economy around their products and services with HollaEx Kit.
NFTs are some of the biggest digital assets in existence these days and a metaverse is not only a dynamic way to connect the business world with blockchains but will likely be a core part of the incoming world of Web 3.
HollaEx supports both of these and rather than signing up for multiple services to access these and then integrating all of them, a user can sign up for these themselves using HollaEx.
HollaEx furthermore allows users to create exchanges and use them for free until they are fully ready to launch and moreover allows for both local hosting and cloud hosting.
This can be done using HollaEx’s easy 5-step crypto project creator process. Simple, give the project a name, add a logo, add assets, make the markets and select where it will be hosted.
A good place to start would be consumer review websites that offer good software comparisons of the crypto kit offerings on the market.
Forums on Reddit and Telegram will also give an idea of which white-label services are the best and which should be avoided. When you eventually decide on the one to use, make sure to leverage all the best crypto tools and resources provided to get the best results for your business or project.
The old way of pushing a crypto project by listing its native token on a centralized exchange has proven unsustainable. A decentralized exchange, although a great supplement, is unrealistic to solely rely upon.
From the high costs to the relinquishing of control, these options do not put projects in a very competitive position.
As such, some white-label crypto software and exchange kits are providing an alternative for these projects. Not only are the costs reduced, especially for DIY exchange operators but they provide the much needed control over tokens and project messaging, this ultimately means less risk and straight-forward token launch for all.