The relationship between cryptocurrency exchanges and the the tokens have became more stronger as the need for tokens increases in cryptocurrency market. Token issuers prefers the popular cryptocurrency exchanges as the gateway, for their token. If a token has been listed in a popular cryptocurrency exchange, than sure it will be identified by many traders and in a very short term the token could get significant market cap or customer base. Where as exchanges prefers to list token to get more customers, also, they could become a business partner of a particular token and its company.
But,
Not all the exchanges supports token trading. To trade with token the exchange should be capable of performing cross chain trading. Because, some new tokens are arriving to the industry with their own separated blockchain protocol. It is impossible for an exchange to continusouly change its trading algorithm for each new kind of token. So many exchanges supports only limited token like ethereum, Tezos, EOS like that.
Exchange that could not perform trading, supports token with an another business model, that is “IEO”. IEO is just like ICO, Where as the entire token crow sales will be performed inside the exchange. Popular exchanges like binance are supporting token with IEO.
To perform IEO functions, An Exchange should be made with Launchpad features. Many cryptocurrency exchange development companies are keeping this as a big concern, and integrating launchpad as a primary features with their cryptocurrency exchange script, software, or source code.
Originally Published Article : Why Cryptocurrency Exchanges Supports Token Trading?