Unless you’ve been missing in action, then you must have read earlier reports that Hong-Kong based cryptocurrency exchange, Bitfinex raised $1 billion in a couple of days through private sales of a new token that it dubbed, UNUS SED LEO.
With the distribution of the token now complete and trading beginning today, we look at the odds of Bitfinex’s utility token catching up with Binance Coin, the native cryptocurrency of another leading exchange, Binance.
The comparisons take into consideration the fact that both tokens have similar use cases even though BNB is the leading candidate having existed for nearly two years.
BNB Use Cases
The native token of the newly launched Binance Chain and thus is used to fuel transactions.
Offers holders trading fee discount on Binance exchange
Serves as a unit for determining participants in initial exchange offerings conducted on the Binance IEO platform (Launchpad).
Commercial uses cases in travel, virtual gifts, investments etc.
UNUS SED LEO Proposed Use Cases
Serve as a utility token for products and services offered by iFinex and its subsidiaries.
Reductions of fees and other discounts on BitFinex and EthFinex as well as future products.
Aside from the use cases above, Bitfinex could further similarly use its token as BNB with a derivatives exchange, security token and IEO platform all in the pipeline.
Having established that both tokens have similar use cases, another factor worth mentioning is the fact that even though they served as fundraising tools, the time of arrival dramatically differs.
When Binance conducted its ICO in 2017, the then unpopular cryptocurrency exchange only raised $15 million. The exchange turning that capital into a $4 billion market cap cryptocurrency in the space of 22 months including a twelve-month bear market, no doubt attests to its excellent management of critical situations such as a 7000 BTC hack. At press time, 1 BNB which was sold for $0.1 during the ICO is now worth $28.74 a 9000% gain.
Conversely, the UNUS SED LEO token that raised $1 billion comes at a time when 2012 launched Bitfinex has already amassed over 1.5 million users.
Although there are doubts regarding whether the amount Bitfinex said it raised is correct since it would mean they raised $100 million daily and $4 million every 4 hours during the ten days that its IEO lasted. Further allegations of wash trading since trading in LEO started today, also refuses to go away.
Nonetheless, the exchange still ranks behind the younger Binance exchange, which has over 3 million customers and fewer controversies.
It is also worth noting that Bitfinex has had to deal with two major hack incident leading to the loss of roughly $73 million. However, the exchange has also excellently dealt with the ugly event which looks all but in the past now.
Putting the above scenarios into perspective suggests that Bitfinex’s token would have a stronger head start than Binance’s BNB and is perfectly poised to excel if there are no significant changes soon.
After all, user base and interest in a particular product or service are what matters most in the crypto industry, and Bitfinex already has a significant dose of both.
In the end, we are poised to witness the growth of another exchange-issued token that could bring either sorrow or joy to investors. Its closest competitor has already yielded a positive return, and anything short of that may be unacceptable.