Recent data show that the market value and price of digital currencies associated with exchanges, such as Binance Coin and Uniswap, may differ from what has been reported on different platforms.
to the Report Coin Telegraph, data on the market value of Coin Binance shows that this digital currency has a larger share of the digital currency market than other tokens related to exchange offices.
Although there is no direct relationship between trading volume and Bainance exchange income and the economic condition of Bainance Coin tokens, traders seem to use this variable to predict the market trend of this digital currency. The controversial mechanism of burning Bainance Quinn units has lost its effectiveness since the Bainance White Paper exchange changed the token in 2019.
The old white paper included a program in which a Bainance exchange devoted 20 percent of its monthly income to buying Bainance Quinn tokens and then burning the purchased tokens out of the network cycle. However, Bainance removed the program from the agenda in 2019 with the release of a new white paper.
However, giving up the 60 million Bainance Quinn tokens that have never been released will drastically change the outcome, as these extra tokens are going to burn over time.
Tokens for digital currency exchanges are inflated, which means that their delivery speed is very high. Uniswap, for example, has delivered 611 million tokens so far, but that number is expected to reach 1.14 billion in the next 10 years.
The difference between Binance Coin and other tokens related to digital currency exchanges
In addition to reducing transaction fees, Bainance Quinn has another real use in Bainance Exchange, and that is to play the role of the main token of China Bainance Smart Network. Part of the $ 17 billion capital locked in China’s Binance Smart smart contracts is in the form of Binance Coin, and this digital currency has decent market share and good trading status in decentralized exchanges.
But can analysts use these simple numbers to value Binance Coin 50 percent lower than other tokens in digital currency exchanges? As mentioned earlier, traders seem to set the price of a coin based on the volume of binary exchange transactions, so it makes sense to use this variable to value a coin.
The average daily trading volume of the Uniswap exchange is $ 1.63 billion, while this exchange is decentralized and only supports instant digital currency transactions. Thus, this figure can be compared with the average daily trading volume of Bainance, which is $ 24.3 billion. It should be noted that in this case, Bainance derivatives markets transactions are not considered.
Using ion-swap exchange volume, which is 93.3% lower than Bainance, the gross market value of this digital currency is estimated at $ 10.3 billion. Calculated based on 50 percent of Bainance Quinn’s $ 76.7 billion market value, it is 36 percent lower than the actual ion-swap market value.
The average daily trading volume of PancakeSwap, the largest active exchange in China’s Bainance Smart network, is estimated at $ 750 million. Using the same 50% market capitalization method, the estimated market value of the CAKE token should be $ 4.73 billion, which is surprisingly consistent with the token’s actual market value.
The price of FTX and Sushi Swap tokens is lower than estimated
If we look at centralized exchanges, the trading volume of FTX exchanges, taking into account derivative market transactions, is $ 1.7 billion. As a result, the trading volume of this exchange should be compared with the average of $ 54 billion in binance, in which derivative transactions are also considered. Taking into account the trading volume of the Futures X exchange, which is 96.8% lower than Bainance, the gross market value of the Futures X tokens is estimated at $ 4.83 billion, which is 11% more than the current market value of this digital currency.
Comparing the average daily trading volume of $ 5.4 billion at Huobi Exchange and $ 54 billion at Bainance, which includes derivatives, the estimated market value of the Hobby Token is $ 15.34 billion. However, when considering Hubby’s unprecedented inflation model, the sharp difference between the estimated market value and the actual market value of this token makes sense.
Last but not least, the Sushiswap exchange, with a daily turnover of $ 305 million. Comparing this figure with the daily trading volume of the Instant Bainance market, which is $ 24.3 billion, shows that the same estimate for the swap sushi token was $ 1.92 billion, which is 33% higher than the current market value of this digital currency.
It is worth noting that these estimates can not be considered as investment advice. This gross and primitive method shows that traders effectively use the trading volume of exchange offices to value tokens related to these platforms.
This method may have worked well in the past, but common legislation, the customer authentication process, and the reduction of leverage in centralized derivatives markets could affect the effectiveness of this method in the future.