An announcement by Binance that it will list the Coinbase fractional stock token (COIN) could lead to some confusion on the part of newer investors.
Let’s start with this – Coinbase, like Binance, is a cryptocurrency exchange. Coinbase and Binance both offer their own cryptocurrency pairs, and the ability for traders to get onto the platform and move digital assets to and from digital wallets.
The Binance declaration that it will list a Coinbase token called COIN means that traders who purchase this asset on Binance (or elsewhere) will be buying small micro-amounts of Coinbase stock.
In fact, just this past February, press releases showed Coinbase going public with a direct listing in lieu of a traditional IPO, with its class A common stock, which now also has the same ticker name: COIN. COIN trades for $250 per share with a collective value of $66.5 billion.
So the COIN token allows traders to buy portions of COIN shares. And they can do that on Binance.
When you get your head around the idea that the token is just a portion of the stock of the same name, the Coinbase equity system makes more sense. Then, when it comes to an exchange listing another exchange’s token, Binance leader Changpeng Zhao has explained that companies which don’t make these additions can miss out on some good opportunities.
“Some exchanges resist listing #bnb as they think it may help @binance,” Zhao tweeted this morning. “Their loss. They miss out on the 3rd market cap coin and ecosystem. We evaluate/list peer exchange coins same as any other coin. If they have users, we list. Win win. Open mindset.”
Indeed, this idea, the idea that an exchange can gain by listing the tokens of competitors, says a lot about decentralized finance and how it differs from traditional money business. In the wake of new consensus-based value models, digital asset technologies, and the kind of asset tokenization evident with COIN, we are seeing new ways to do business and move money for the twenty-first century.