“When will you list your token?” This is the main question any ICO community manager receives before, during, and after the token generation campaign — from one in two participants on average. “Why so long?” And this one will be the next for sure. Token holders are absolutely right in their desire to achieve coin availability on the exchanges as fast as possible, but for projects, listing can be a nightmare. In fact, the listing process depends on an exchange. So the problem is to choose a worthy one from about 200 exchanges on the market. It seems our team at Humaniq has found a way to solve this.

Is the exchange market fading?

The cryptocurrency market has changed a lot since Humaniq held its ICO in April 2017 — more than a year ago now. The overall capitalisation of the market has grown tremendously since then, reaching as much as $800 billion in January of this year.

There’s no rise without a fall, however, as the rest of 2018 has seen a protracted bear market, with the total capitalisation struggling to hold at $300 billion.

The surprising thing is that this hasn’t really affected the ICO market, as the amount of funding collected in ICOs for the first six months of 2018 is double that of 2017. Hundreds of projects have held their ICOs since ours, with more than half of them dying within a few months. However, even if we don’t take the failed ones into account, there are still more than a thousand tokens all looking for a home in the various exchanges.

Problems

Huge fees

When the demand for something is higher than the supply, its value rises. It is obvious that listing on an exchange has become a privilege in this environment, and the exchanges have naturally started asking for listing fees, which sometimes go into the multi-million range.

In the last few months, we have explored dozens of exchanges, ranging from the top-tier to the almost-unknown. All of them asked for the payment of a listing fee, meaning that we needed to carefully consider what was the best use of our resources.

Unfortunately, in the vast majority of cases, the fee they requested was disproportionate to the benefit that the exchange offered. Not all of them are created equal, and the listing fees are mostly arbitrary: some low-volume exchanges asked for more money than statistically-superior competitors.

Notably, some asked for 100 BTC (more than $8.000.000, according to the current rates) — an absurd amount for any company that puts its product above fleeting token price gains. For comparison, undergoing an IPO costs about $1.000.000, a lengthy process requiring many regulatory checks and ultimately considered as “the big exit” for startups that have achieved massive success.

Long latency period

Because of high demand, the exchanges put the projects on a waiting list that can be quite long so you can wait for as long as 1–3 months for your turn. The process of negotiations will also take some time, as well as the technical process of embedding a crypto coin into trading operations.

Things are out of control

In 2017–2018, crypto exchanges were not lucky enough. Ones were closed while others were arrested, DDoS-attacked or robbed. This summer, Colombian banks have closed all the accounts of South American cryptocurrency exchange Buda.com without warning or explanation, Bitfinex bounces back after a DDoS attack, and Coincheck lost $400m after hackers’ unauthorised access.

The largest exchanges have solved their legislation and safety problems, however, the crypto market is growing and changing so fast that no one has any insurance from acts of God (or hackers and governments).

Age issues

Crypto exchange is a very young business. The majority of exchanges are not older than three years (or even younger) and they are still getting established, which is obviously not easy in the crypto field. So the industry has a lot of downscale platforms where a listing is meaningless where it is not worthwhile to spend your efforts and fees. Moreover, there are scam projects and projects with crafty managers who can just grab your fees and disappear.

Humaniq hints

Do your research

The most important lesson we learned was: you need to research the crypto exchange market in the same way that you study your potential audience, and look for opportunities to integrate them in the optimal and cost-effective way.

Humaniq carried out a comprehensive study of more than 200 crypto exchanges analysing their traffic, trading volume, and growth rates. We used CoinMarketCap’s 24-hour volume rankings to estimate the parameters.

Subsequently, we developed four criteria with which to evaluate an exchange: the amount of visitors in the last month, recent visitor growth dynamics, countries where the exchange is popular, and trade volume.

At first glance, we found nothing particularly surprising: the exchanges with large traffic have large trade volumes. Binance with a total turnover of $835,929,788 USD has about 50 million visitors per month on average, OKEx ($958,283,705) and Huobi ($478,543,126) have more than 5 million. In addition, the exchanges with large trade volumes always have visitors from the US and China in their Top-5.

It was much more interesting to correlate the growth rates with the trade volumes. It turned out that exchanges with growing traffic show a very progressive trade volume growth.

Most top exchanges show a gradual decline in traffic.

We realised that we needed to adopt a different strategy, one involving finding hidden gems — those exchanges showing the potential to become major players in the near future. We decided to take a closer look at exchanges with the highest growth rates.

In total, we found about 40 exchanges with these sort of charts. As a matter of interest, almost all of them had the US and China in their Top 5. Furthermore, we compared their fees and latency periods with the top exchanges. It is logical that both these parameters were several times lower. It seems it is obvious what to do.

Explore the countries

What other recommendations can we give to those who choose an exchange for listing? First, you should analyse the visitor audience: usually, it can say a lot about the quality and horizons of a platform. For instance, we monitor the dominance of certain country citizenships in the top visitor lists. Generally, it means that the exchange was founded in that country. Then, we explore the legislation towards crypto market in the country and the risk level to avoid areas where an exchanges are shut down or else fraud is only a matter of time.

Search for Stable

Our advice is to focus on exchanges with the option to withdraw in USDT. It’s a signal that a site supporting stable coin will allow the trade of large amounts of tokens (and have a much stronger market position, financial prospects, and even legal defense sometimes).

Don’t hesitate to delist

In case you see one of the exchanges your coin is traded on is becoming more and more insecure don’t wait a tragedy to happen — delist your token. It’s not only the support of your token holders but also your public image that in crypto world means everything.

What about traders?

How can the exchanges with the growing traffic help a trader? First, trying to occupy a market share, they offer the user options and opportunities that are not available on other exchanges. E.g., localization, unique or easy-to-use features, simpler verification or withdraw, more safety options, and lower commissions.

Second, if a trader is already registered on a particular exchange and has an investment fund there, the listing of a new high-quality coin is an opportunity to diversify the portfolio and to get a new trading tool.

Our results

The deep research led to the creation of a fairly extensive shortlist of 30 exchanges. We have entered negotiations with all of them, making sure to get the best possible deal. Very soon, in the list of 6 exchanges supporting HMQ trading, you will see new ones. In addition, we will continue our work on decentralized exchanges. Humaniq has 2 DEX platforms in its pool now, however, we believe we should extend our list of decentralized exchanges, supporting the trust of crypto community.

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