1. History

2. Trans-Fee-Mining

3. References

Fcoin is a Chinese cryptocurrency exchange open to crypto investors from all around the world.^[1] The Exchange only provides crypto-to-crypto trading functionality and does not allow users to trade using traditional fiat currencies or other assets. It is most well known for creating the Trans-Fee-Mining model, which has been adopted by many of the largest crypto exchanges in the world like Bitforex, Coinbene^[2], Coinsuper^[3], and others.

History

FCoin was founded Zhang Jian, former CTO of Huobi, one of the world's largest cryptocurrency exchanges, and author of the book "“Blockchain: Defining The Future Finance and Economic Landscape." The exchange was established in May 2018, and set out to be the world's first fully transparent digital asset trading platform.

Prior to launch, the exchange received investments from some of the largest investment firms in the digital asset space, including Danhua Capital, Node Capital, Singer Capital, Timestamp Capital, 8 Decimal Capital, The Zipper Fund and others.^[4]

Unlike other cryptocurrency exchanges of the time, Fcoin launched its own cryptocurrency called the FToken. Unlike other digital assets of the time, this token gave users unique benefits, in that it allowed them to receive daily dividends generated from transaction fees collected by the company and the right to decide and participate in decisions affecting the Fcoin community.^[5] This model, called the Trans-Fee-Mining model, was truly unique at the time, and led to a surge in popularity for the platform, before many realized its potential effects on the long term price of the token and its potential to inflate trading volumes. The initial excitement led to a surge in price for the token from $0.10 to $1.05 in just a few months.^[6] After the hype a massive sell-off ensued leading to the token stabilizing near its initial price.

In the last year the team has made a range of changes to its model, allowing it to maintain a sizable portion of its initial user base. The community remains active, and new decisions are made by FToken holders frequently.

Trans-Fee-Mining

This model is what brought Fcoin its initial popularity. Although Fcoin didn't invent the model, it was the first to popularize it.^[7] The model has since been adopted by a range of other cryptocurrency exchanges, showing that the model clearly had merit, despite the negative attention it had received. Currently almost all of the top cryptocurrency exchanges have adopted some form of the model including, Coinbene, Bitforex, Coinsuper and others. Each of these exchanges has launched a proprietary token that allows holders to reap some form of benefits, whether it be dividends or reduced transaction fees. Even the largest exchanges like Binance and Huobi have launched their own tokens, which similarly provide benefits to the token holders. While they don't promise dividends like other using the model they instead offer discounts on trading fees. Binance even offered a tiered model to give users with more of its token more benefits.^[8]

References

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