China’s FCoin Crypto Exchange Trading Volumes Raise Eyebrows from Community
The FCoin crypto exchange is one of the newest in the industry right now, and they’ve adapted to their own revenue model to profit. However, unlike other platforms, they’ve seemed to experience instant success, which has forced them into the spotlight of the industry. To be more specific, they have passed some of the largest exchanges worldwide, with their $5.6 million in trading volume being more than the sun of all top-10 platforms, according to CoinMarketCap.
Much of their success is credited to the use of “trans-fee mining,” which China has deemed controversial in the media. Other exchanges, like the wildly success Binance platform, has also criticized the use of this method. Founder Zhang Jian of FCoin says that the business model basically makes crypto-trading and mining a process that requires no middleman.
The whitepaper for FCoin restricts them to a 10 billion cap, though only 51% will be released to the public; the rest remains with FCoin. Rather than promoting an ICO or even an airdrop, the tokens are planned to be immediately available on their platform in exchange for transactions taking place. Every fee is paid to FCoin with bitcoin or Ethereum, while the platform reimburses them entirely, but with FTs, which are the tokens from FCoin. Plus, anyone who maintains their FTs all day long will receive a portion of the 80% of profit from the fees.
Despite continued success, the media in China has speculated that these profits that FCoin has had isn’t completely real. Instead, they suggest that the company has used bots to simulate activity and create fake transactions, though Zhang himself has denied these actions. Binance’s founder and CEO, Zhao Changpeng, posted on his Weibo account about this issue, saying,
“You pay transaction fees to the platform with BTC and ETH. Then the platform pays ‘100%' back to you with its token. Isn't it just buying platform token with BTC and ETH? How is this different from an ICO?” His accusations continued, turning to price manipulation next. “If an exchange doesn't get revenue from transaction fees and solely profits from the price of its token. How would it survive without manipulating the token price? Are you sure you want to play against a price manipulator? The same price manipulator who controls the trading platform?”
Changpeng made another post the following day, saying that it looks just like the user is getting paid interest for holding FT tokens. Even with these concerns, Hong Kong’s OKEx said that they’ll be creating their own program that will help crypto platforms adapt to using trans-fee mining as well. Anyone that maintains 500,000 OKB, which is the OKEx token, will get support from the platform as they adapt.
Binance has still yet to let go of this issue, saying that they would partner with 1,000 teams to develop 1,000 new platforms that would do the same. The co-founder of Binance said,
“Now that people love trans-fee reimbursement, how about giving back 200 percent? One exchange is not enough, let's do a thousand. Users have different needs, so we are now providing different choices.”
At the moment, FCoin has not commented on these new plans with other companies or the heckling from Binance.