Around Two months back I wrote an article about FCoin - Economics and Future of TransFee Mining : FCOIN as example. In my article I advocated that FCoin trans mining model is an innovation that is one step more than what Binance Did. I also suggested that investment in FToken is right. Since then FToken has appreciated apprx 80-90%.
The objective of this article is to describe FCoin Model in detail and compare it with the Binance Model.
Entire crypto system is in its early phase and is evolving every day. Yet the best part is that investment in crypto projects can be liquidated any time in most of the projects. To liquidate assets it is important that there are large number of liquidity providers - market makers and traders. The trading activity of large liquidity providers helps enable fair price discovery of the traded assets which motivates investors to take risks in assets knowing well that they can come out of the project at any time. Therefore, for crypto ecosystem to grow -it is essential that liquidity providers are properly compensated.
Trading is an activity that helps discover fair price and exchanges (Centralized or Decentralized) are the place where trading activity takes place.
Binance and FCoin both are crypto trading platforms. And both have their own tokens to incentivise traders/market makers to trade more using their trading incentive models. So the objective of both Binnace and FCoin is same - that is to increase trading volume which helps increase liquidity which leads to fair price discovery which leads to growth of crypto ecosystem. Therefore, both are helping grow the crypto ecosystem.
Binance Model
Binance trading fee is 0.1% of traded value. They incentivise traders/market makers by offering discount on trading fee to those who hold their tokens as shown below:
Current discount rate is 25%.
So the return on your investment by holding BnB is returned back to you in discount for trading fees. The earnings from trading activity are used to do buy back of BnB tokens in order to provide price support to tokens.
There are many other incentives e.g. lower maker fee than taker fee but they all are common in other platforms too.
FCoin Model
FCoin trading fee is 0.05%. They incentivize traders/market makers by reimbursing entire trading fee in their own token called FToken. They call it transaction mining. FCoin was first to introduce this innovative model.
Based on the community voting, the Trans-Fee mining model ended almost 10 months ago -Link. And no new FT are mined now.
The model now is changed to Sustainable Trans-Mining. For details about their model pls read Explanation on FCoin Sustainable Mining Mechanism. Under new model - the tokens to be distributed for various mining including Sustainable Trans-Mining come from FCoin Fund which holds 23% of total supply of FTokens. Total supply is 4,904,014,844.45 FT.
Binance vs FCoin Model
We can see that Binance reimburses part of trading fees which reduces with each passing year from 50% - 0% in 5 years.
And FCoin also reimburses part of trading fees in terms of their FToken. Additional advantages of FCoin are:
- FCoin is community lead exchange. It means that any new proposal is implemented when community members who hold FT stakes support the proposal
- FOne - This concept introduces community owned sub-exchanges. It means that community members can create their own exchanges where they can list any crypto asset for trading. 80% of the trading fee revenue will be given to those community members who have created the sub-exchange. This provides much higher flexibility to run IEOs.
- FCoin is launching derivatives trading platform FMEX
- FCoin is going to launch their own blockchain called Fractal to enable entire governance and FCoin ecosystem on a distributed blockchain platform.
Summary
In summary - binance and FCoin models are serving the same objective with slight twist to same concept. However, FCoin is able to lock higher trading volume for same pair(below pic shows for BTC/USDT pair) than binance:
Therefore, we can conclude that FCoin will be able to see similar or better appreciation of its ecosystem than Binance.
Outlook for FCoin
In my view similar projects can be compared for similar time frames. What I mean by that - that we need to shift back the start date of FCoin on CMC to the start date of binance on CMC for fair comparison and then plot the market cap together. Below is the resulting chart:
There is remarkable match between market cap growth of FCoin and Binance. The deviation around Dec'2017 - Feb'2018 is due to bull exuberance in crypto space.
Based on this, assuming FCoin will keep focus on its growth strategy as well as promotion, the fundamentals presented in my earlier article, referred in the beginning, and upcoming bull run prediction for entire crypto space Crypto Assets Price Prediction Using AI : Buy or Hold or Exit - it is safe to assume that FCoin ecosystem mcap will increase many fold in next 2-3 years.
FCoin Social Links
Telegram Group:
https://t.me/FCoinEnglish
https://twitter.com/FCoinOfficial
https://twitter.com/fcoin_asia
https://twitter.com/EuropeFcoin
https://twitter.com/FCoin_English
https://t.me/fcoinnode
Please do share your feedback. And if you like the view expressed in this article then please share it to your other social channels. Thnx.
Pramesh Tyagi
