Valuing Exchange Tokens – Is OKEx’s $OKB A Winner?

In a recent article titled, “OKEx: Defining Blockchain and Redefining Finance,” OKEx wrote that “the number of crypto exchanges has been booming rapidly, recording over 20,000 exchanges globally…” That’s an amazing number of exchanges, excessive even, with many sure to rise and fall over the next several years. This brings me to revisit a series on exchange token values I put together in 2018 which included the following nine exchanges:

1. Bancor (BNT Token)
2. Bibox (BIX Token)
3. Binance (BNB Token)
4. COBINHOOD (COB Token)
5. COSS.io (COSS Token)
6. Huobi (HT Token)
7. IDEX (IDEX Token, previously AURA Token)
8. KuCoin (KCS Token)
9. Waves DEX (WAVES Token)

Of the exchanges included in this analysis, which died, which thrived, and how does the value of OKEx’s OKB token compare? Today I’ll compare past and present TVEV ratios for the above exchange tokens, and consider where OKB coin fits in the mix.

What is the TVEV ratio?

For valuing exchange tokens against one another and to better understand how the cryptocurrency market prices different token utility models, I use a variation of the Bitcoin NVT (Network-Value-To-Transactions) ratio called the TVEV ratio (Token-Value-To-Exchange-Volume). A cryptocurrency exchange token’s TVEV is calculated by dividing the total market cap of the exchange token by the 24-hour exchange volume.

To find the baseline TVEV for each crypto exchange token, this ratio needs to be tracked over time. An understanding of this data point allows a trader to better determine when an exchange token is under- or over-valued. Unfortunately, I’ve only tracked these ratios at a few points, so determining an average TVEV value for an exchange token is difficult. However, there is value in comparing the TVEV values of exchange tokens against one another even in the case where there isn’t an understanding of TVEV averages.

In general, it is said that a higher TVEV ratio means the market is more bullish on the token’s prospects. There is a higher perceived token utility, a more valuable token model, and/or the market is more bullish on the prospect of capital appreciation. Conversely, a low TVEV ratio could mean that there is a low perceived utility and/or poor token model. It is also possible that a low TVEV ratio may indicate an undervalued exchange token, so consider this data point as only one metric in your research. Let’s dig into the tokenomics …

Tokenomics by exchange:

Below you’ll see the tokenomics by exchange first for 8/30/2018, and then for 10/15/2019, approximately one year later. You also see the TVEV values for the following periods: 8/17/2018, 8/30/2018, 9/14/2018, and 10/15/2019.

1.Bancor (BNT Token)

• Tokenomics on 8/30/2018:
  • Price: $1.66
  • Circulating Tokens: 52,773,898 BNT
  • Total Supply: 77,443,096 BNT
  • % Tokens in Circulation: 68.15%
  • Circulating Market Cap: $87,746,246
  • Total Market Cap: $128,555,539
  • 24-Hour Volume: $2,064,007
• Tokenomics on 10/15/2019:
  • Price: $0.33
  • Circulating Tokens: 62,226,057 BNT
  • Total Supply: 68,259,543 BNT
  • % Tokens in Circulation: 91.16%
  • Circulating Market Cap: $21,091,886
  • Total Market Cap: $22,525,649
  • 24-Hour Volume: $485,077
• TVEV:
  • 8/17/2018: 41.51
  • 8/30/2018: 62.28
  • 9/14/2018: 49.65
  • 10/15/2019: 46.44

Interestingly, based solely on the above data, it could be said that BNT token is fairly valued right now with a TVEV closely matching that of one year ago.

2. Bibox (BIX Token)

• Tokenomics on 8/30/2018:
  • Price: $0.50
  • Circulating Tokens: 102,339,166 BIX
  • Total Supply: 267,941,449 BIX
  • % Tokens in Circulation: 38.19%
  • Circulating Market Cap: $51,657,685
  • Total Market Cap: $135,248,537
  • 24-Hour Volume: $205,457,159
• Tokenomics on 10/15/2019:
  • Price: $0.15
  • Circulating Tokens: 107,187,126 BIX
  • Total Supply: 260,729,409 BIX
  • % Tokens in Circulation: 41.11%
  • Circulating Market Cap: $16,769,598
  • Total Market Cap: $39,109,411
  • 24-Hour Volume: $790,016,506
• TVEV:
  • 8/17/2018: 0.67
  • 8/30/2018: 0.66
  • 9/14/2018: 0.56
  • 10/15/2019: 0.05

Much lower market cap with much high volume reported yielded a much lower TVEV value. But one would wonder … is this volume real? These numbers aren’t believable in current markets and something seems fishy.

3. Binance (BNB Token)

• Tokenomics on 8/30/2018:
  • Price: $10.66
  • Circulating Tokens: 95,512,523 BNB
  • Total Supply: 192,443,301 BNB
  • % Tokens in Circulation: 49.63%
  • Circulating Market Cap: $1,017,735,000
  • Total Market Cap: $2,051,445,588
  • 24-Hour Volume: $1,123,624,761
• Tokenomics on 10/15/2019:
  • Price: $18.40
  • Circulating Tokens: 155,536,713 BNB
  • Total Supply: 187,536,713 BNB
  • % Tokens in Circulation: 82.94%
  • Circulating Market Cap: $2,861,188,227
  • Total Market Cap: $3,450,675,519
  • 24-Hour Volume: $940,564,705
• TVEV:
  • 8/17/2018: 1.39
  • 8/30/2018: 1.83
  • 9/14/2018: 1.79
  • 10/15/2019: 3.67

This is a picture that makes sense. Volume is down for Binance from one year ago, but the market cap is much higher based on investors finding value in the token model and a reduction in total token supply from token burn (Binance bases token burn on exchange profitability). More circulating tokens hasn’t inflated away investor profit because of Binance’s strong business.

It’s no surprise that the TVEV value for Binance has doubled over the last year – surely Binance’s influence has at least doubled. What is worth noting is that 82.94% of BNB tokens are already in circulation.

4. COBINHOOD (COB Token)

• Tokenomics on 8/30/2018:
  • Price: $0.03
  • Circulating Tokens: 371,314,905 COB
  • Total Supply: 1,000,000,000 COB
  • % Tokens in Circulation: 37.13%
  • Circulating Market Cap: $13,272,199
  • Total Market Cap: $35,744,000
  • 24-Hour Volume: $5,381,900
• Tokenomics on 10/15/2019:
  • Price: DECEASED
• TVEV:
  • 8/17/2018: 12.10
  • 8/30/2018: 6.64
  • 9/14/2018: 6.12
  • 10/15/2019: DEAD EXCHANGE

REKT

5. COSS.io (COS Token)

• Tokenomics on 8/30/2018:
  • Price: $0.05
  • Circulating Tokens: 118,810,622 COSS
  • Total Supply: 200,000,000 COSS
  • % Tokens in Circulation: 59.41%
  • Circulating Market Cap: $6,732,425
  • Total Market Cap: $11,333,000
  • 24-Hour Volume: $692,535
• Tokenomics on 10/15/2019:
  • Price: $0.01
  • Circulating Tokens: 173,453,046 COSS
  • Total Supply: 200,000,000 COSS
  • % Tokens in Circulation: 86.72%
  • Circulating Market Cap: $2,992,270
  • Total Market Cap: $3,450,200
  • 24-Hour Volume: $7,080,102
• TVEV:
  • 8/17/2018: 18.47
  • 8/30/2018: 16.36
  • 9/14/2018: 30.00
  • 10/15/2019: 0.48

Lol … another exchange with obviously fake volume.

6. Huobi (HT Token)

• Tokenomics on 8/30/2018:
  • Price: $2.16
  • Circulating Tokens: 50,000,200 HT
  • Total Supply: 500,000,000 HT
  • % Tokens in Circulation: 10%
  • Circulating Market Cap: $107,803,104
  • Total Market Cap: $1,080,000,000
  • 24-Hour Volume: $627,366,914
• Tokenomics on 10/15/2019:
  • Price: $3.61
  • Circulating Tokens: 234,205,523 HT
  • Total Supply: 500,000,000 HT
  • % Tokens in Circulation: 46.84%
  • Circulating Market Cap: $846,361,614
  • Total Market Cap: $1,805,000,000
  • 24-Hour Volume: $561,853,930
• TVEV:
  • 8/17/2018: 0.95
  • 8/30/2018: 1.72
  • 9/14/2018: 1.71
  • 10/15/2019: 3.21

This picture also makes sense – volume down from last year, but with higher market cap based on investor sentiment and exchange performance leading to a much higher TVEV. Watching this one closely along with Binance! Also note the nearly 37% increase in circulating tokens.