What’s the difference between BEST and other exchange tokens?

What are crypto exchange tokens?

As the name suggests, an exchange token is a digital asset that is native to a cryptocurrency exchange and that is minted, or created, by that exchange. Exchange tokens are launched for a variety of reasons, but most often it is to offer customers of that particular exchange special rewards, benefits, incentives and discounts on trading fees.

Still, exchange tokens function like any other cryptocurrency. You can buy the exchange token directly from the exchange itself and hold it, trade it or sell it on.

What is the Bitpanda Ecosystem Token (BEST)?

Our goal has always been to give our users an investing experience that is safe, simple and rewarding. The Bitpanda Ecosystem Token (BEST) was created with just that in mind: to give back to our loyal Bitpanda community and to reward them by adding more value to their Bitpanda experience.

Simply put, BEST enables you to participate in Bitpanda’s loyalty and rewards programme. Holding BEST and trading on Bitpanda Broker allows you to receive a wide range of benefits and perks, like receiving weekly BEST rewards, higher staking rewards and special access to our platform. BEST is not used to collect transaction fees, nor is it used as insurance for traders. 

How does BEST work?

Unlike other exchange native tokens that are used to borrow against and take part in financial transactions, the BEST token is used to reward active Bitpanda users. BEST is Bitpanda’s loyalty programme to incentivise customers to own and earn BEST throughout the whole Bitpanda ecosystem.

From a technological point of view, BEST is issued on the Ethereum blockchain as an ERC20 token. An amount of 1 billion BEST was created (never to be increased) and 500,000,000 BEST was offered during the IEO, while Bitpanda holds the remainder as company reserves.

From the initial mint of 1 billion BEST, we have burned more than 198 million BEST. The burning process means fewer tokens in circulation, consequently rendering our token more valuable, and we will continue to burn monthly until reaching a maximum of 75% of the total BEST supply has been burned. 

BEST vs. other exchange tokens

Cryptocurrency exchanges typically launch native exchange tokens for several key reasons; 

• Raising capital and improving liquidity
• Providing user incentives for staking 
• Covering transaction costs 
• Serving as a governance mechanism 
• Giving the users special discounts on trading fees 
• Providing access to special rewards and discounts

In the case of FTX, the FTT token powered their exchange by facilitating the collection of transaction fees and forming an insurance fund for traders. It was also used to borrow against highly-inflated holdings that financially underpinned the economic viability of the platform, which was ultimately their downfall. 

CRO is the native token of Cronos, a decentralised blockchain that stems from the Crypto.com network. The token is primarily earned as a reward for processing and verifying transactions and each node is able to stake a fixed amount of CRO tokens in exchange for the opportunity to participate in the network’s operations.

BNB, the native token of the Binance platform, also started as an ERC20 token, but is now hosted on its own chain. BNB was initially launched to offer users discounted trading fees, and currently sits in the top five cryptocurrencies based on market cap. Its use cases have expanded to cover transaction fees on the Binance chain and to pay for online services. 

Unlike other exchange tokens, BEST enables customers to participate directly in major perks like receiving weekly BEST rewards and higher staking rewards. BEST is almost exclusively traded on Bitpanda, which means we are not subject to liquidation risk from other exchanges, and it is not used as collateral in any financial transactions. BEST is a pure trading token that is a prerequisite to participate in the voluntarily offered loyalty and rewards programme with exclusive benefits on our platform. 

The bottom line is Bitpanda is not dependent on users to buy and hold BEST, it’s simply a way for us to reward our most dedicated users. 

Bitpanda is safe, secure and regulated 

We recognise and understand the scrutiny and distrust currently circling the crypto world, but rest assured the safety of our customers and their assets is our top priority. The Bitpanda Group diligently follows European law and regulation, and Bitpanda GmbH is a registered virtual asset service provider (VASP) with the Austrian, French, Spanish, Italian, Czech, and Swedish Financial Authorities.

Bitpanda Payments GmbH possesses a payment service provider licence under PSD2, recently becoming an E-Money Institute and Bitpanda Financial Services GmbH holds a MiFID II investment firm licence with strict user verification processes that are fully compliant with AML5. We also operate in accordance with the EU’s General Data Protection Regulation (GDPR) with strict security measures that meet high international safety standards. 

Find out more about Bitpanda

Learn more about us, our values and our vision for the future of investing.

Disclaimer

Please keep in mind that Bitpanda may at any time terminate the BEST Rewards and may decide not to pay them out. BEST rewards, as any other feature within the Bitpanda Loyalty Programme, do not represent a claim on or against Bitpanda or any of its affiliates and shall not be deemed legally binding. See also Bitpanda Loyalty Programme Terms for more details.