When it comes to cryptocurrency, not being listed on an exchange can be a hindrance. It no longer happens to be a potential purchase option for users who were not able to get it during the ICO. Also, users must be able to exchange crypto into fiat currencies through crypto exchanges. It is because every transaction is not possible through crypto. In a nutshell, coin listing on the exchange is essential for the functioning and acceptability of a cryptocurrency. Find more below.
How to select a crypto exchange?
Choosing the right cryptocurrency exchange platform has a substantial impact on the success of crypto investments. In the following section, we will explore the ways to choose a proper cryptocurrency exchange for your investing requirements.
1. Be Cautious
Being cautious is the first thing you need to do when looking for a crypto exchange platform, and also when considering cryptocurrency investments. With lots of frauds and scams out there, finding a reliable crypto exchange can be challenging when it comes to coin listing. Thus, make sure to be cautious and watch your moves.
2. Do Your Research
When choosing a crypto exchange platform, reputation is something that you need to look for. Before you start the process by creating an account, take your time to analyze the crypto exchange you are considering. Find out what others have to say about the platform. Dig deeper and find the maximum information you can. Also, do not ignore looking for potential negative reviews that the exchange platform executives might not want you to see.
3. Opt For Higher Security
The more challenging an account creation process is, the better. If you find it too simple to create an account, that indicates that a crypto exchange is not trustworthy. And, if your digital assets suddenly disappear, you might have to face a lot more trouble retrieving your money and tracking them down. Despite the exchange you pick, it is a sound idea to store the majority of your digital assets in some offline storage service such as a cold wallet. Cryptocurrency exchanges should follow the same when it comes to assets that are not needed for liquidity.
4. Beware of Pairs and Fees
Trading fees and currency pairs are the two factors that differentiate different cryptocurrency exchanges. Most crypto exchanges will have a fee for transactions, and these can be according to the level of your activity, the volume of transaction or unrelated to any of these. Learn more about the trading fees and consider the ways they would impact your trading style and investment. Perhaps make sure to consider a crypto exchange with a lower trading fee.
How do Cryptocurrency Exchanges Select Coins?
Crypto exchanges use several parameters to decide which tokens or blockchains should be listed. These include security audits of the smart contract or the blockchain itself, the quality of the project, along with the maintenance status and availability of the source code. Other than these parameters, they adhere to the applicable rule.
Some crypto exchanges also consider factors like the range of use cases, innovativeness of blockchain solutions, market indicators, as well as experience and reputation of the team behind the project. The method that leads to new coins getting listed on the platforms is conducting a full review.
To offer more high-quality options for investment while safeguarding the interest of the users, sometimes, the voting, collaboration, and community building are also used. In this case, all applications concerning the token listing vote go through a preliminary process of review by a coin listing review committee. The weightage of the preliminary review is 50% of the whole process. Furthermore, the applications are examined based on the different listing criteria.
Procedure
Laying importance to coin listing for any cryptocurrency exchange, crypto exchanges need to understand the process for listing on a crypto exchange platform. If you are wondering how to list a coin, follow the key steps below.
The primary step involves communication with any chosen crypto exchange platform regarding the potential for coin listing on a particular exchange. A detailed evaluation needs to be done on the background of the crypto exchange and its operation. Here are some of the parameters often discussed.
- Whether the crypto exchange works in the areas where you need the flow of your cryptocurrency?
- Whether the crypto exchange is centralized or decentralized?
- Does the cryptocurrency exchange allow conversion only between cryptocurrencies or from fiat currency to cryptocurrency?
- The listing prices charged by the crypto exchange
- The technical details of the platform and the token
Highlighting complexities of problems to be considered in the process of listing on the exchange, it is recommended that the token issuers should reach out to a professional with years of experience in the coin listing process. The specialist can help with narrowing down a list of crypto exchanges to simplify the process for listing.
In the following step, the crypto exchange through the specialist communicates a few documents that would be needed for the coin listing process. Usually, the professional take care of documents like a legal memorandum on account of the token issuer. There are legal experts with experience in the legal evaluation when it comes to the compatibility of a coin with the current legal framework.
The next step includes the filing up of the application form with the needed documentation and payment. After the form fillup process is finished, the expert will usually communicate on your behalf to track the progress of your application process.
In case you find the application to be accepted, the ultimate stage includes the technical integration of the coin with the crypto exchange and mode of the payment method concerning the issuance of new coins and any change of an extra fee for coin listing.
Step by Step guide
Coin listing happens to be a complicated process – it is even more so in terms of the process than proper listing. Completing all the formalities might need a lot of time and money, particularly if you want to deliver your coin to a notable crypto exchange. Even if an organization has enough risk appetite and capital to it, authentication is never ensured. Companies usually tend to get their customers on crypto exchanges with a 99% success rate. Nonetheless, it is quintessential to realize that these organizations are only agents, plus they do not get to make the final settlement. It is a pattern of interaction that can help in preparing all the documents competently, although it is the project partners always that hold the primary liability.
With that being said, it is essential to analyze and research thoroughly what precisely is happening during every step. Here, we are going to discuss five primary steps crucial for successful coin listing.
Step 1. Prepare your community
Coin listing brings opportunities for users wanting to buy coins. Usually, they think of it as an investment, particularly when the project remains new and seems promising. They purchase tokens and hold them, anticipating the price to increase sooner or later.
Every exchange happens to be a new opportunity. It brings more media attention and customers to a project. But, the primary objective of this operation refers to fundraising. Coins are needed to be marketed to make coin listing a financially viable marketing process.
Due to this, each new inclusion in a cryptocurrency exchange comes with a promotion campaign. It is essential for users to know that coins, sooner or later, will be available and be widespread.
A community preparation consists of two things: a promotional campaign targeting a potential audience and announcements for current holders. The former is the simple one. Usually, cryptocurrency projects use their social media profiles to let investors know about future events. And, it does not demand too many resources, as most of your community generally opt-in by themselves. Also, in this case, the project teams need to keep their holders within a loop.
Apart from building a community, there are promotional campaigns that happen to be an expensive one. But, being significant, it is a must for attracting new audiences and new funds. An organization needs to use all well-targeted and available channels of promotion. For mid-sized cryptocurrency exchanges, promotional banners on the website and social media announcements work. But, for big exchanges like Bitrump, all kinds of promotion needs extra effort.
Step 2. Choose a crypto exchange
There are two crypto exchange types: DEX (decentralized cryptocurrency exchanges) and centralized exchanges. The former is simply a blockchain platform that keeps transaction histories in various cryptocurrencies. Such exchanges can be easily accessed. Also, their trading fee is affordable for small-margin projects, and authentications are done automatically. However, there is a difference. A coin listed on such a platform needs to be capable of procuring transactions.
For centralized exchanges, the process is entirely different. Each project aims to cover as many exchanges as possible, and coin listing on a centralized exchange comes with a lot of expenses. Thus, you need to choose wisely.
After choosing an exchange, the project team must narrow down a list of favorable exchanges they are going to apply. Listing is a method that needs to be supported; hence, every inclusion needs to be planned. Smaller exchanges will be in front of the queue, and the project should aim for hitting a bigger platform each time.
Step 3. Find reliable partners
Startups typically do not possess much legal expertise—that is why they require trustworthy associates for successful coin listings. Many legal businesses and lawyers are specializing in the blockchain industry. Their service can help projects without a legal department.
When talking about the top crypto exchanges, working with agents is inevitable. These exchange platforms do not trouble themselves to reach out to every project individually. They assign these concerns to their associates, which indicates an extra commission. Sadly, sometimes it happens to be the only alternative to communicate with a big platform. As we have said before, coin listing on top crypto exchanges is an expensive affair.
Step 4. Pass due diligence
Due diligence refers to the verification of each project element. Crypto exchanges need to make sure that coins are legally and technically acceptable. Some of them impose an additional commission for such work. In many cases, crypto exchanges assist the project team in paying for due diligence when the coin has been rejected. Otherwise, they receive some commission from transactions.
The more prominent a crypto exchange is, the better it handles due diligence. Project managers have to acknowledge that even after paying all the fees and fulfilling all the conditions, the coin listing may still not be guaranteed. Most crypto exchanges demonstrate the reasons for rejection so that the business can work better for their next attempt.
The procedure begins with the confirmation of the data given by the project partners. Filling up a form remains the primary step of communicating within an exchange. Exchange platform representatives review all the data and often ask for additional data.
Due diligence indicates providing each of the available data. It needs to be prepared carefully adhering to the exchange’s laws. After that, the team needs to wait for additional requests or final decisions. This method usually needs a couple of weeks. If it happens to end with approval, the exchange representatives state the coin listing requirements, and the coin instantly gets listed on the exchange platform, available for trading.
Step 5. Keep the project in the public eye
Big exchange platforms discard coins that do not have enough daily volume to remain valuable — and being eliminated from a crypto exchange is damaging to reputation. That signifies why a post-listing campaign happens to be vital. The company needs to keep its project in the public eye for stimulating trading. It can be done in several ways, beginning with promoting and ending with distinct features. It signifies the ongoing development and improvement. Coin listing happens to be an excellent way to boost funds and make things possible.
Time required
As far as the time is concerned, the coin listing on the exchange requires approximately 2-3 weeks with all the formalities and conditions followed.