Some exchange operators have discovered a new technique to artificially pump up their trade volume. They are straight rewarding users with their own issued tokens for creating transactions, something critics call a backdoor ICO ripe for manipulation.Trading as Mining High trade volume has
been a step bitcoin exchanges contended on for a long while now. And some apparently utilized different techniques simply to increase their numbers along the years, from zero-fee deals to motivating algos. Just recently there were even accusations that some hired their own market makers just to constantly trade and even counting both sides of any trade, efficiently doubling the genuine action. And now some have actually begun to simply pay traders for utilizing their platforms instead of waiting for organic growth.Apparently developed by Fcoin, a platform just recently established by previous Huobi CTO Zhang Jian, the\”deal fee mining\” model is suggested to assist clients offset trading expenses by handing them exchange tokens. While this is a new development in crypto, it has precedents in other fields. FX and stock brokers in some cases provide cashbacks or other rewards(such as complimentary iPads )based on volume to increase customer trading. Here, nevertheless, the tokens are arguably a form of dividend-bearing securities, and offering control in the exchanges themselves … which is something that can not happen without crypto tokens.Stealing Binance\’s Thunder?A number of exchanges using the trans-fee design have turned up following Fcoin, including Singapore\’s Coinbene and Hong Kong\’s Bit-Z. The platforms have actually been able to rack up massive trade volume numbers in short time thanks to this technique. Naturally, the business that is most upset about this is Binance which, naturally, has its own token but dispersed it in an ICO.Binance CEO Changpeng Zhao slammed the practice as a disguised ICO on Chinese social networks and apparently< a href =http://news.8btc.com/binance-ceo-changpeng-zhao-fcoins-trading-is-mining-is-a-disguised-ico target= _ blank rel =noopener > specified:\”If an exchange\’s survival depends mainly on the price increase of its own token rather than on deal fee profits, it needs to drive up the token rate. In this regard, less knowledgeable traders and retail financiers can hardly have the upper hand in the trading competitors with those crypto whales, specifically the exchange whale.\”Do you appreciate and rely on the reported trade volume by exchanges in the bitcoin ecosystem? Share your thoughts in the comments section listed below. Images thanks to Shutterstock.Verify and track bitcoin cash transactions on our
BCH Block Explorer, the very best of its kind throughout the world. Likewise, keep up with your holdings, BCH and other coins, on our market charts at Satoshi\’s Pulse, another initial and totally free service from Bitcoin.com.The post This Brand-new Technique Assists Exchanges Synthetically Pump Up Their Trade Volume appeared first on Bitcoin News.