According to the report by Autonomous Research, the market price to list a crypto token on an exchange reaches up to $3 million – or almost 10x the amount traditional exchanges request for securities.
Whoah… Can you give some detail?
Sure. According to the researchers’ sources, crypto exchanges take $1 million for a reasonably regarded token, to $3 million for an opportunity to get quick liquidity. NASDAQ or other traditional equity exchanges charge fully registered securities about $55-300k for listing, with annual fees of $100-500k to remain listed.
Why is it important?
Comes without saying, ICOs are highly dependent on crypto exchanges. After selling non-dilutive digital assets that are in many ways just free funding, project owners owe nothing to utility token buyers by law, and often overfund the project by a factor of 5-10x relative to early stage fintech startup.
As a result, ICOs are expected by buyers to get liquidity on the crypto exchanges, and preferably the bigger ones. That allows the latter to boost the fees – reportedly, in 2017, Coinbase have made a $1 billion in profits.
What can we learn from it
- When planning an ICO and a consequent listing on exchange, it’s important to factor in some hefty costs into the raise amount.
- Tokens are more attractive if buyers know they can trade them easily, so the choice of exchange (and, unfortunately, the amount you’re ready to pay) can define your ICO success.