The cryptocurrency market is experiencing a wealth creation movement, and exchanges are using "three axes."

This article is an original piece by Chain Catcher, authored by Hu Tao.

Assets such as exchange platform tokens and DeFi tokens have successfully withstood the recent downturn in cryptocurrency prices, attracting increasing attention due to their outstanding performance. As an important part of the crypto ecosystem, leading CEXs and DEXs play a significant role. So, which assets and projects are worth paying attention to?

On May 13, Tesla CEO Elon Musk tweeted a post titled "Tesla & Bitcoin," stating------

“Due to concerns regarding Bitcoin's impact on the environment, Tesla has suspended Bitcoin payments. Cryptocurrency is a great idea, and we believe it has a bright future, but it cannot come at a great environmental cost. Tesla will not sell Bitcoin, and once its mining is transitioned to sustainable energy, we will resume using it for transactions. We are also considering using cryptocurrencies that consume less energy (<1% of Bitcoin's energy consumption).”

The influence of the world's richest person is undeniable.

Two hours after this tweet, Tesla's official website removed the Bitcoin payment option, and shortly after, Bitcoin's price "plummeted," dropping from nearly $60,000 to the $50,000 range. Even more "terrifying" is that this decline does not seem to have rebounded as quickly as in previous instances. On May 17, Bitcoin's price fell again, and according to Coingecko data, as of the time of writing, it had dropped to $44,960.40, with a 7-day decline of 22.6% and a 30-day decline of as much as 26.7%.

However, during this severe setback in the cryptocurrency market, the platform tokens of leading centralized exchanges (CEXs) such as Huobi, Binance, and OKEx, as well as some DeFi tokens from decentralized exchanges (DEXs), surprisingly did not suffer much from this market turbulence. At the same time, during the market correction, these types of tokens also led in terms of decline.

Overall, compared to the downturn of the "king of cryptocurrencies," Bitcoin, the recent performance of exchange platform tokens has been relatively good. With significant market fluctuations, people are concerned about the rapid switch between bull and bear markets, leading to the question, "Which assets have strong anti-cyclical properties?"

The leading exchange platform tokens and DeFi tokens can be considered assets with clear anti-cyclical characteristics. Although they cannot compare to the explosive growth seen at the beginning of the year, the overall performance of these tokens is still better than the market average.

1. Finding Signals from Data

The table below compares the market performance of platform tokens from three leading centralized cryptocurrency exchanges (data from Coingecko, data extraction time May 17, 2021, 22:08):

We also compared the market performance of DeFi tokens from leading decentralized exchanges (data from Coingecko, data extraction time May 17, 2021, 22:08):

Generally speaking, the performance of platform tokens can be seen as a "barometer" of the operation and value of cryptocurrency exchanges. Their value depends on the exchange's own value and the construction of its ecosystem. The more popular an exchange is, the larger its trading volume, and the better its ecosystem construction, the higher the value of its platform token. Conversely, if an exchange's popularity declines, trading volume stagnates, and ecosystem construction is poor, the price of its platform token will inevitably drop.

Data does not lie. From the analysis of the above table, it can be seen that Huobi's HT is currently the best-performing platform token among the three exchanges, with positive growth indicators for 7 days, 14 days, and 30 days. In contrast, Binance's BNB has negative growth for both the 7-day and 14-day periods, while OKB has a negative growth for the 14-day period. Although HT's 30-day growth is slightly lower than OKB's, it remains one of the few platform tokens that have consistently maintained positive growth recently.

It is worth mentioning that Huobi destroyed a total of 5.615 million HT (approximately 10.4269 million USDT) in April, with the amount destroyed increasing by 54.2% compared to March. As of May 15, 2021, Huobi had destroyed a total of 26.573 million HT. Generally, in a less favorable market environment, destroying platform tokens and reducing the total supply can create deflationary expectations for users, which also indicates potential for appreciation.

However, in terms of trading volume and visitor traffic, Binance's performance is more outstanding, while Huobi and OKEx are roughly comparable.

In fact, Binance's BNB has also performed notably well recently, having solidified its position as the third-largest cryptocurrency by market capitalization. With the support of Binance's public chain BSC, BNB, as a platform token with inherent functionality and value, plays a complementary role in the Binance Smart Chain ecosystem. Currently, the Binance Smart Chain ecosystem has captured a loyal user base, primarily consisting of steadfast BNB holders and platform supporters, who have recently benefited from the rise in BNB's price.

It must be said that as the most important part of the cryptocurrency and blockchain ecosystem, exchanges always bring new directions to the market. The reason why some leading exchanges' platform tokens can withstand the impact of the market downturn is largely due to their early strategic positioning, which has also brought tangible benefits to users, injecting new momentum into their own development while benefiting users.

2. Exchanges Use "Three Axes"

As mentioned earlier, platform tokens reflect the fundamentals of the overall operation of cryptocurrency exchanges and are a direct representation of the exchanges' own value. The counter-trend performance of exchange platform tokens is actually related to a series of comprehensive "wealth creation movements" they have recently undertaken.

Exchange "Wealth Creation Movement" Starting Move: Establishing a Solid Compliance Foundation. Frankly speaking, the "wealth creation movement" of cryptocurrency exchanges has not been reckless; the first thing they prioritize is establishing a solid compliance foundation. Taking Coinbase as an example, since completing its listing in April, its compliance has been recognized by regulators, as any company listed on NASDAQ must obtain approval from the U.S. Securities and Exchange Commission. In terms of compliance, another leading cryptocurrency exchange, Huobi, has also performed well:

• On August 3, 2020, Huobi Technology's wholly-owned asset management subsidiary, Huobi Asset Management (Hong Kong) Limited, obtained a Type 4 (advising on securities) and Type 9 (asset management) license from the Hong Kong Securities and Futures Commission, which became effective on March 3, 2021;

• On August 24, 2020, Huobi Technology's indirectly wholly-owned subsidiary, Huobi Wallet Hong Kong Limited, obtained a Trust or Company Service Provider (TCSP) license to operate trust or company services in Hong Kong;

• On December 22, 2020, Huobi Technology's indirectly wholly-owned subsidiary, Huobi Trust Company (Huobi Trust), obtained a trust company license in Nevada, allowing it to engage in trust company business as defined by Chapter 669 of the Nevada Revised Statutes and its regulations.

Additionally, another leading cryptocurrency exchange, Binance, also places great importance on compliance. Although it was recently reported to be under investigation by the U.S. Internal Revenue Service, it is simultaneously cooperating with regulatory agencies and law enforcement around the world to establish a robust compliance program, including anti-money laundering principles and tools for financial institutions to detect and handle suspicious activities.

Exchange "Wealth Creation Movement" Second Move: Accelerating the Listing of High-Quality Tokens. On the foundation of compliance, the speed of listing new tokens by mainstream cryptocurrency exchanges has noticeably increased. Since successfully completing its listing, Coinbase has added several new tokens to its trading platform, such as The Internet Computer (ICP), Cartesi (CTSI), iExec (RLC), Mirror Protocol (MIR), and Tellor (TRB) in early May.

Recently, Huobi Global also officially announced the establishment of a new Asset Center (Listing BU), primarily responsible for asset-related work, including token listings and delistings, asset evaluation, and asset operations. This department aims to select high-quality digital assets for all Huobi global users and provide full lifecycle services and standardized management for listed assets, helping the industry move towards compliance and standardization.

At the same time, the new Asset Center will provide projects with more industry resource support, including market and community resources from Huobi Global, technical guidance, contract security, and compliance advice, fully supporting the progress of projects and promoting the compliant development of the industry. On this basis, Huobi's recent speed of new token listings has gradually increased, and the quality of listings has further improved, with market performances of crypto projects like O3, XCH, ICP, CSPR, and LAT being quite good.

Ciara Sun, Huobi Global's Vice President of Business and head of the Asset Center, stated that the Huobi Asset Center will focus on promoting more high-quality assets to be listed on Huobi Global, achieving transparency in the listing and delisting processes, ensuring proper information control, standardizing asset evaluation criteria, and eliminating any form of "insider trading" behavior to protect the interests of Huobi users and reshape the company's image.

The evaluation of projects will not only consider application prospects, technical strength, core team, and background of investment institutions, but also comprehensively assess the project's community reputation and popularity, fully considering community user needs, and conducting multi-dimensional project scoring and screening.

Exchange "Wealth Creation Movement" Third Move: Empowering Platform Tokens with Public Chains. While compliance and token listing are becoming increasingly important for ecological fundamentals, leading cryptocurrency exchanges are also beginning to view market development with foresight and a holistic strategic vision.

In fact, since 2020, exchange public chains have become a focal point of industry attention and a key tool for exchanges to elevate their competitive positioning. Based on high-performance public chains, cryptocurrency exchange platform tokens have begun to showcase their potential.

Taking Huobi as an example, the recent counter-trend rise of HT indicates that platform tokens have become an excellent means of empowerment through public chains. The Heco ecosystem itself is a concentrated embodiment of Huobi's ecological momentum, while complementing the platform token HT, which can provide funding, traffic, and resource support for the Heco ecosystem. The healthy development of the Heco ecosystem and its continuous empowerment of HT can enhance HT's application scope and market demand, while the resulting siphoning effect can further benefit the Huobi ecosystem.

Currently, among the "HBO" exchanges, Binance and Huobi have become leaders in the field of exchange public chains------

• According to official data from Binance Smart Chain, as of May 16, 2021, the total transaction volume on BSC was 475,754,580, averaging about 1,822,814 transactions per day over 261 days;

• According to official data from Huobi's Heco ecosystem, as of May 16, 2021, the total transaction volume on Heco was 314,935,875, averaging about 1,897,204 transactions per day over 166 days.

From the comparative data above, although Huobi's Heco ecosystem has not been online as long as Binance Smart Chain, its average daily transaction volume has successfully surpassed that of Binance, making it one of the leading exchange public chains with the highest amount of mainstream assets locked on-chain, the most active users, and the fastest development speed.

Of course, some projects on the Heco ecosystem have also experienced sharp declines, including the leading project MDX, which saw its price drop significantly from nearly $10 to around $3, while BAGS fell from nearly $500 to the $110 range. While "no child is without mistakes," investors still need to pay attention to ecological risk issues.

On the other hand, the fundamentals of DEXs such as Uniswap and Sushiswap are also continuously strengthening, providing strong support for the prices of UNI and SUSHI tokens. According to the latest data from May 18, Uniswap V3, which has been online for only two weeks, has already reached a locked volume of $1.1 billion, with a 24-hour increase of 12.98%; SushiSwap has a locked volume of $4.7 billion, with a 24-hour increase of 6.44%------ these DEX tokens have risen against the backdrop of Bitcoin's continuous decline, becoming a "fresh force" to withstand the recent downturn in the cryptocurrency market.

3. Conclusion

From accelerating the listing of high-quality tokens to the counter-trend rise of platform tokens, cryptocurrency exchanges have launched a combination of strategies in the new round of "wealth creation movement." Unlike previous "wealth creation movements" that focused on short-term effects, we find that centralized cryptocurrency exchanges are now placing greater emphasis on comprehensive layouts of platform tokens, compliance, and public chain infrastructure, gradually sharing the long-term development dividends of the market with users. Decentralized cryptocurrency exchanges are also increasingly accepted and used by more users, with their value depth continuously increasing.

Who can bring real benefits to users in this "wealth creation movement" ultimately depends on the "hard power" of each exchange. From the historical development of the industry, there may still be many variables in the future, and market competition will become increasingly fierce.