With the announcement of Binance’s decision to allow users on the platform to now convert their “dust” to BNB tokens, there are a lot of questions circulating about the BNB token. Not only are people are curious about the token, but other exchange tokens as well. Today, we’re going to take a look at two of the most well-known exchanges with their own tokens: Binance and KuCoin

Binance

The first exchange we’ll take a look at is Binance and the BNB token. The BNB token is a specific cryptocurrency used on the platform for a variety of things. The most common usage is for covering fees incurred when trading.

When traders are making a transaction on the exchange, they have two options. First, they can pay a trading fee in the new cryptocurrency they’re trading into. This means that a 0.1% fee will be subtracted from the cryptocurrency you’ve traded into.

For example, if you’re trading for BTC/ETH, then 0.1% of the ETH you would have received will be deducted from your balance (meaning you still get 99.9% of what you traded into).

However, users also have the option to use the BNB token to pay for their fees. The BNB token is another cryptocurrency with a variety of trading pairs on the Binance platform. When using the token to cover fees on the platform, users get a 50% discount, meaning that they only pay 0.05% in fees. This is a temporary feature for now and you can find out more about the fee structure and reduction on the official Binance site here. Additionally, according to the official Binance whitepaper (page 9 if you’re interested), the BNB tokens will also serve a function on the soon-to-come decentralized exchange the team is working on, known as “Binance Chain.”

KuCoin

Sometimes referred to as Binance’s “fiercest rival,” up-and-coming cryptocurrency exchange KuCoin is another big name in the cryptosphere. KuCoin is unique because their exchange cryptocurrency, known as KuCoin Shares (KCS), behaves significantly differently than Binance’s BNB.

KuCoin Shares takes the approach of offering users the same benefits one might experience from holding shares in a company (like stocks but in a much faster-paced environment). The exchange offers KCS for consumers to purchase, then rewards them for holding onto them.

Unlike the BNB token, KuCoin doesn’t use the token to simply cover fees and use as gas for applications. Instead, the coin is used to pay out dividends to shareholders on the exchange. KuCoin calls itself “the people’s exchange” because it’s somewhat of a combination between a co-op and a publicly traded company.

For those holding KCS, the exchange pays out “dividends” based on the number of “shares” (tokens) you hold onto . These dividends come from the trading fees paid on the platform. Theoretically, if you wanted to, you could use the KuCoin exchange to only purchase KCS and then sit and watch as your other accounts grow (slowly) over time.

Each time the exchange pays out dividends, KCS holders get a little of the fees paid by those trading on the platform. You won’t get rich overnight by buying one KCS, but it’s certainly easy to see the appeal!