The Evolution of Altcoin – Part II: The Challenges
Last week we featured ‘Altcoin Evolution’, NewsBTC’s latest series on the market-wide challenges that altcoins face in getting to the market. We’re going to take a look at a number of different challenges that altcoins face in the general market, starting with accessibility.
Our framework for describing these challenges will generally be presented from the perspective of American consumers, as some of the exchanges, projects, etc. may not yet be globally accessible – a testament to the very nature of the topic under consideration. We’ll also look at these processes and challenges through the prism of a very casual to mid-market crypto consumer – who has a solid understanding of the broader landscape, but not necessarily the depth of more advanced crypto-native consumers.
Meeting the challenges: making a purchase
Without a doubt, the most difficult challenge for emerging projects – those like ECOMI (which we mentioned in last week’s ‘Altcoin Evolution’) or the Dapper Labs FLOW token (from the creators of NBA Top Shot), is the accessibility. FLOW and OMI tokens typically sit somewhere around the top 100 in market cap, making them big enough to be on the radar, but not a substantial threat to immediately become a top 20 token.
Let’s take a look at the very basics of securing this type of asset. Acquiring the OMI coin, for example, involves setting up an account on Bitforex, Gate.io, or OKEx, all of which are generally lesser-known crypto exchanges compared to major players such as Crypto.com, Binance, Coinbase. , FTX, etc. .
Our team has gone through the step-by-step process of purchasing certain OMI tokens to compare it to the major exchanges that more casual consumers frequent. We used Bitforex in this case, due to its reliability cryptographic reputation and the ability to offer a generally wider range of altcoins than many exchanges, with over 150 tokens supported. We have chosen XLM to transfer funds to the Bitforex account in order to take advantage of lower transfer fees than many other major tokens (fees can vary widely between different currencies, so it will be wise to do your research on how to minimize costs by looking at the acquisition of the desired token).
Some cryptocurrencies, such as XLM, may also require more information than a regular wallet QR code. If a TAG / MEMO is provided, it should be used in order to avoid delays or even potential loss of transfer funds. You can think of the TAG / MEMO line as an apartment number, while the QR code acts as a building.
A difference here from the Coinbase trading process, for example, is that you must first transfer your funds from your Bitforex wallet to a spot / trading account on Bitforex, which allows instant trading on the platform. The next step required us to trade XLM tokens for Tether, the USDT stablecoin pegged to the dollar. Once this conversion was completed, we were able to purchase the OMI part.
As you can see, compared to many streamlined buying processes that are leading the way in traditional markets, there are still a few hurdles to overcome. These often unknown additional steps with simple purchases of BTC or ETH on more popular exchanges can place underestimated limits on potential investors who acquire tokens, be it IMO or otherwise.
Basically, casual consumers are less likely to familiarize themselves with the process if they are not already familiar.
Prominent altcoin FLOW is leveraging premier partners to increase awareness, but the token will need more exchange support to increase consumer accessibility. | Source: FLOW-USD on TradingView.com
Related reading | Bitcoin stuck in the clouds, but better days could be ahead
The next ‘accessible’ step: how Altcoin projects can calm major exchanges
As crypto has gained legitimacy over the years, political frameworks have emerged for major exchanges on how they support new tokens.
Let’s take a look at the major Coinbase crypto exchanges. The company has historically implemented a core set of standards for crypto asset issuers, focused on compliance with Coinbase’s core values, technology, compliance, market supply, market demand, and crypto. -economy. In January, however, the company introduced the Coinbase Asset Hub.
Soon after, in early May, Coinbase released a guide to listing assets on the exchange on their blog page. The main sticking points that were touched on in the blog included the source code‘s adherence to industry standards, the degree of centralization (which may dictate the degree of possible collusion within the project) and the achievement of a real and bearable use case (read more about this in our next section of ‘Altcoin Evolution’).
Despite this, Coinbase is still looking to streamline the asset listing process even further. In a blog post in June, Coinbase CEO Brian Armstrong cited one of the top three opportunities for the company as bringing “more assets to Coinbase, faster.” This message came as the company announced its intention to launch a DeFi ‘crypto application store‘.
Despite these difficult accessibility battles, the future generally looks bright for emerging projects looking to increase their exposure. As the larger crypto space expands and matures, exchanges look to streamline their processes – legitimate projects will likely be given the platforms they need to reach the top.
In next week’s ‘Altcoin Evolution’, we’ll go over one of those main sticking points that Coinbase calls out in its guide to list assets – use cases and value. We will examine the importance of these traits and how projects can enhance them.
See you next week!
Related reading | Polygon Acquires Hermez Network, How They Will Improve Ethereum Scaling Solutions
Charts from TradingView.com, Image courtesy Jerry Sena