If you’re considering investing in the crypto world, it’s important to select a blockchain, crypto, and exchange that will benefit you the most. The future of crypto involves complex tokenomics that will benefit coin holders and incentivize investors. Some tokens will even allow coin holders to sway decisions within the network. If you’re considering making a crypto investment soon, here are some basics you should know before you begin investing.
Tokenomics has to do with the rules and regulations built into the design of a new crypto token. Each token can be designed in unique ways to benefit the coin holders and help maintain the coin’s value. When you begin investing, take a look at the whitepaper of each token you are considering to gain insight into the goals and reasons behind the token’s design. Like the new FTT token by FTX, some tokens are designed with many benefits and incentives for the coin holders. These benefits include a built-in burn mechanism as an automatic deflationary practice which will help maintain the number of FTT tokens on the market, thereby regulating the value and maintaining an appreciation of the token. Another benefit that FTX and other crypto projects offer is airdrops of crypto. Airdrops are random drops of tokens given freely to anyone holding the coin. FTX will be giving its FTT holders regular SRM token airdrops to encourage them to utilize the new Serum DEX and keep FTT as an active token in the crypto ecosystem. Some crypto projects will also allow their users to take an active role in crypto governance. FTX is one of the first crypto projects to offer this, but now, FTT holders, called FTX BFFs, will be able to join the FTX crypto community and share their ideas, host events, and offer their opinions on the use and governance of the token. As the crypto space evolves, coin holders will have more significant opportunities to influence the market and support the blockchain projects that benefit them the most.
Your Exchange Matters
One of the most influential aspects of the crypto world is its ability to create a decentralized economic system. The exchange you select when trading crypto heavily impacts how you trade and the benefits you get from your coin. Most exchanges are centralized, meaning they act as third-party intermediaries between traders and therefore require a fee and typically prolong the trading process. Decentralized exchanges, however, do not require intermediaries and provide many benefits to users looking to make quick, regulation-free crypto exchanges. Though centralized exchanges are generally more user-friendly, their central nature makes them a big target for hackers. At the same time, decentralized exchanges are not typically targeted by hackers, though they can be more challenging to use from an investment perspective. Crypto projects such as the Serum DEX created by FTX and Alameda Research are attempting to build a more user-friendly decentralized exchange with high liquidity and all the benefits of DEX trading without the complexity. The future of crypto is intertwined with the future of decentralized finance as projects like NFT videogames and the metaverse continue to take shape.
Having a solid understanding of the principles of decentralized finance and the goals and benefits of each cryptocurrency will help you make more informed investments and could allow you to speculate on the long-term success of each blockchain and cryptocurrency.