As 2023 draws to a close, with Bitcoin prices returning to the $40,000 mark, enthusiasm for investments in the cryptocurrency market seems to have ignited in an instant. Major exchanges are offering various preferential policies to investors in response to this emerging bull market, aiming to bolster market confidence and attract more capital into the crypto sector. At the beginning of the bull market, with the core business remaining unchanged, various activities introduced by major exchanges have become the primary direction for users to participate in investments. How to choose among these activities is a common dilemma for users at present.
Spot Events
Market Value Management
Cryptocurrencies differ from traditional finance in that major exchanges are not listed companies, and their market values are not universally recognized. Evaluating the performance of an exchange is often done by examining the platform’s native token. Therefore, major exchanges focus on the management of their native tokens as part of their operations. This is analogous to traditional finance’s ‘market value management,’ involving the formulation of various value-driven operational strategies, the announcement of incentive policies, and efforts to enhance the value and investment enthusiasm for the native token. The operational strategies for native tokens are often communicated to users through various promotional events.
In the year 2023, the most successful exchange in ‘market value management’ is undoubtedly MEXC. Its native token (MX) experienced a staggering price increase of 337.5%. The underlying growth logic can be attributed to events related to spot trading:
Successful Incentive Mechanisms
As the spot trading fees (Maker and Taker fees) on major mainstream trading platforms are now zero, traditional profit models have been disrupted. Building upon its existing spot trading events (Launchpad), MEXC intensified the scale of its events (Kickstarter) and achieved a turnaround against the market trend in the year 2023. Both Launchpad and Kickstarter are token airdrop programs, with the threshold for airdrops being the possession of MX. However, the airdrop rules for the latter favor small MX holders more, as Kickstarter’s profit distribution employs a “tier mechanism”, significantly stimulating the investment desire of small MX holders.
Passing Benefits to Users
The valuation model of native tokens is similar to the stock ‘dividend discount model’: the price places a greater emphasis on the cash flow associated with the native token, and spot trading events serve as the source of this cash flow. Taking MEXC as an example, starting in 2023, from January to November of this year, this ‘cash flow’ has already been completed 1,113 times. Simultaneously, due to regular buybacks, MX creates an expectation of price increases with reduced circulating supply for users.
Futures Events
Focus on User Growth
Futures trading and spot trading have fundamental differences, with the former relying more on investment strategies and trading expertise. This requirement often cannot be fulfilled through the iterative development of the trading platform itself. Therefore, major exchanges stimulate user growth and achieve a win-win situation by developing ‘intermediate products’ such as demo trading and copy trading, as well as launching futures trading events. In the futures market, MEXC also boasts the lowest fees across the network (0% for Maker fees and 0.03% for Taker fees) and outstanding liquidity. The secure and stable trading environment allows users to maintain continuous profit expectations, encouraging user growth in trading.
Reasonable Event Mechanism
Futures events often achieve reward distribution by setting trading volumes, but excessively high trading volumes can dampen user trading interest. At the same time, an overly concentrated distribution of rewards with high thresholds can leave the majority of participants without a chance at the reward. Currently, on MEXC, there are six types of futures events that users can participate in:
- Get $1,000: As an beginner event, users can receive 10 USDT worth of bonus after completing a trading volume of 1,000 USDT within 7 days.
- Futures Competition: The trading volume threshold is set at 7,500 USDT. It is held monthly and participants can share the prize pool when their futures PNL reach a certain level. The total prize pool for December 2023 was as high as 5,000,000 USDT.
- Super X-Game: The trading volume threshold is set at 10,000 USDT. During the event period, participants automatically qualify for the event when they make futures trades at ≥21x leverage, with individual bonuses reaching up to 3,000 USDT.
- M-Day: The trading volume threshold is set at 30,000 USDT. As one of MEXC’s most popular futures events, the minimum trading volume for successful participation is 30,000 USDT.
- Hot Crypto Challenge: The trading volume threshold is set at 90,000 USDT. Featuring recent popular futures trading pairs like SOL/USDT, the prize pool for a single round of the activity (5 days) can reach up to 20,000 USDT.
- Futures Leaderboard: The trading volume threshold is set at 100,000 USDT with daily prize pools. The total prize pool for December 2023 reached up to 15,000 USDT.
This progressive structure of trading thresholds automatically stratifies users, allowing them to participate in different types of events based on their capabilities. Additionally, popular events, such as futures competitions, often distribute a substantial amount of prizes across mid-to-low-tier thresholds, benefiting a vast number of participants.
Conclusion
The changes and growth in the crypto market are rapid, and investors, when choosing to participate in any activity, need to understand the mechanism of the event thoroughly. Evaluating whether the mechanism is conducive to one’s growth and provides a stable investment environment is crucial. While enjoying the wealth brought by investments, it is also essential to be proactive and maintain vigilance at all times.
