Just a few days ago, the Coinsuper exchange was nowhere to be seen - and now, it is among the top four exchanges, lining up with Binance, OKEx, and Huobi. The exchange rose from 16th to fourth in about a month. While it is possible for the new market to see robust volumes, the sudden growth of volumes to nearly $1 billion is puzzling, and once again raised comments on the techniques for faking volumes on exchanges.
Recently, Coinsuper launched its CEN token, not listed on CoinMarketCap, in order to support the exchange ecosystem, also known as the Coinsuper Ecosystem Network. Coinsuper will also implement transaction mining from July 16:
Transaction mining is, in fact, a form of reward system for trading. No coins are mined, but users see a forfeiture of fees, and a reward of up to 500 CEN, for trading and transacting on the exchange. This way, Coinsuper is incentivizing its volumes. This is still not anything like fake volumes, but may make the CEN digital asset more prominent.
“The mining progress of the hour and the day will be shown on the homepage and the account page respectively. Continued trading activities beyond the limits will be charged the standard trading fee with no CEN reward,” explained the exchange in a recent publication.
The rise in trading and positions of Coinsuper coincided with the launch of rather obscure new markets, which immediately boasted significant volumes. Exchanges like Bitforex, recently listing the No BS Crypto Project tokens (NOBS) started receiving criticism about their unrealistic volumes.
While there are no detailed reports of losses or failed trades, the issuance of native exchange coins is raising some skepticism, especially if the asset is over-promoted. Some believe exchange coins go through unwarranted pumps, including Binance Coin (BNB) and KuCoin Shares (KCS). There is also skepticism about Bibox Token (BIX). Exchange tokens add another form of liquidity, and sometimes serve to hedge price risk from other assets. However, their price also fluctuates, and their large supply may create the possibility of forced liquidity. Some traders suspect faked orders.
WhalePanda, also a skeptical user, stated a similar scheme of creating an exchange with inflated volumes.
Buying and holding onto exchange tokens, even ones that promise rewards or dividends, may be yet another risk. The model of Binance is being copied on new exchanges, but their security and other qualities are still untested. And since crypto exchanges are largely unregulated, orders and liquidity pose risks for staged activity.
Neither the author nor the publication takes any responsibility or liability for any investments, profits or losses you may incur as a result of this information. Cryptocurrency trading and investing is risky and market participants are advised to always conduct a thorough research.