How do crypto exchange users make money from crypto exchanges? Well, the first answer is trading. As crypto holders, you can try out various forms of trading over an exchange crypto platform, ranging from day trading to leverage trading, and more. But, do you know there is another way to make money with crypto exchanges? Yes, the answer is “revenue sharing”. The concept is just at its nascent stage at the moment and as of now there is just one single crypto trading platform that offers the facility. It won’t be too wild to expect that several other crypto exchanges too will soon join the revenue-sharing bandwagon to make their offerings more attractive for the users. Check out Multibank.io cryptocurrency exchange.
The post below offers a brief on the concept of revenue-sharing by crypto exchanges.
Revenue sharing by crypto exchanges
The concept of revenue sharing by an exchange crypto platform is based on the ethos of the shared economy. As per the norms of shared economy, an organization shares the profits earned with its community. It helps to facilitate a win-win situation for both parties.
How does it work?
You must be wondering how the process of revenue sharing works with an exchange crypto platform.
Well, in this case, the exchange crypto platform shares the revenue generated from the portal’s trading fees with all its investors. It’s more of like a loyalty program where you can expect something around a 6.2 percent rate of interest. To make it simpler, think of it like a company is paying dividends to shareholders. The idea is to create a share scale of the economy where everybody gets a part of the profit.
Also Read: https://multibank.io/page/leverage
Is there any condition?
Yes, there is a minor condition to be a part of the revenue-sharing program of the exchange crypto platform. The profit sharing program is especially designed for those investors/traders who hold the native token of the exchange crypto platform in the platform’s native wallet. Now, that doesn’t mean you won’t get the share if you invest in or trade with other coins on the exchange crypto platform. But, alongside, you will also have to make investment in the exchange’s own token to be eligible for the loyalty program. However, if you invest in or trade with only other cryptos on the exchange crypto platform and don’t invest in the platform’s native token, you won’t be able to receive the share of the revenue.
Benefits of revenue sharing
The revenue sharing model by an exchange crypto platform is certainly a welcome move in the crypto world.
The whole concept of shared economy helps to develop a reliable and healthy ecosystem where everyone is the winner. On one hand, the revenue-sharing model offers the exchange crypto platform to create a more inviting ambience for investors compared to other exchanges. On the other hand, investors feel pampered and excited to be a part of such an exchange crypto platform that rewards their investment with a handy passive income opportunity. And “happy clients” is the basic fundamental of a successful and sustainable business. The revenue-sharing model would go a long way in helping the crypto exchange to attract more investors. Also, the concept of shared economy would further help to scale up the investor retention rate for the exchange crypto platform.
Tips to choose the right exchange
As mentioned previously, as of now, there is just one exchange crypto platform that offers the facility of revenue-share. But, it can be expected that we will have several other crypto platforms adopting the same loyalty program to create a more welcoming ambience for the investors. However, you must be careful while choosing the right exchange crypto platform while planning for trading, investing, and/or being a part of the revenue sharing portal.
Rate of revenue sharing
Currently, the market standard for revenue share is over 6% interest rate. You can go with that rate. When other exchanges will start the same loyalty program and if you plan to switch to another exchange by then- make sure you are not getting a lesser rate.
High trading volume
As mentioned above, the only condition to be a part of the revenue-share model is to invest in the native token of the exchange crypto platform. Apparently, it’s a very nominal condition but think about it- what would you do if you can’t sell the holdings at a great price in future? When you invest in a coin or token, the basic goal is to make profit from selling the coin after some years at a high price. But, if the coin/token cannot earn high trading volume, your hard-earned money will reduce to nothingness. Yes, you will earn the loyalty reward from the exchange crypto platform but that amount is almost nothing compared to the huge loss you might have to encounter.
Bottom line is, always make sure that your chosen coin/token for the revenue-share facility commands decent trading volume. Now, if it’s a new coin, it is likely to show below average trading volume in the initial days. But, at least check the scale of progress of the coin/token in the first place. If the crypto shows a promising scale of growth, then you can trust it with your money.
The security factor
The exchange crypto platform needs you to store the crypto holdings in its own native wallet. But do you think it would be a safer option, especially when even the largest exchanges are not able to thwart hacker attacks? Well, probably it’s not that safe to store your crypto holdings in the exchange’s native wallet. But there are certain aspects to check out for that will help you to attain peace of mind while storing crypto holdings in the exchange’s wallet.
One is multi-factor authentication. This is a cutting-edge security protocol that provides multiple layers of security to the platform. Put simply, one has to go to multiple layers of access to finally enter the account. The other one is cold storage. It is an off-chain form of storage which keeps the funds safe from the reach of hackers. Besides, the exchange must also provide insurance as compensation for hacked funds.