Over the course of just 188 days, AAX has now burnt 50% of the total supply of AAB, cutting the supply down to 25 million AAB.
Since launching AAB in mid-April, every day we have used 100% of all trading fees collected on AA Futures for the burning of our platform token. Unlike other exchanges that burn on a weekly or quarterly basis, we went for the most aggressive burn frequency, enabling our users to directly take part in driving demand for AAB and maximizing coin burns by increasing daily trade volumes.
Since April, we’ve seen more registrations and consequently saw futures volumes rise from an average daily trading volume of 10 million USD to more than half a billion. Given the fact that AAB has been trading below $0.5 USDT for quite some time, users were able to see just how impactful these coin burns were as they chipped away at the total supply.
Now, the game has changed.
From the perspective of investors in AAB, scarcity now needs to start factoring into price. This means driving demand for AAB and incentivizing HODLing.
That there is such demand is beyond doubt. When we launched AAB, just one month after the stock market crash of March 2020 and in the midst of the pandemic, we saw more than 9 million AAB sell out in just under 3 days. Subsequently, during our bi-weekly and later weekly flash sales, we were able to see batches of half a million AAB sell out in just 1 hour, 10 minutes and later 57 seconds.
The long-term challenge in crypto is always to advance the maturity of the asset in the real world and in the eye of its (potential) holders. Speculative trading is one of the defining features in the crypto markets, but over time, as more capital continues to be channeled into the market, and as more institutional investors take up positions as well, we can expect this to change.
An asset such as Bitcoin is appraised in the context of the wider economy, with some comparing it to gold while others see a better comparison with fine wine or whiskey (i.e. a luxury product that increases in value over time). AAB, however, is appraised in the context of our industry, and in particular in the exchange space.
This means looking at AAB’s utility as well as AAX at large.
Already, holding AAB makes it 20% cheaper to trade on AAX. Furthermore, AAB Plus, our savings product for AAB, offers a highly competitive interest rate. To further drive its use, we will be rolling out new products – around trading, gamification and wealth management – where AAB will play an important role.
As for the exchange itself, we will be organising more competitions targeting all users from regular day traders to high-frequency API traders. Also, we will continue to expand our futures offerings to enable our users to hedge their positions. This includes introducing new features (e.g. cross margin, trailing stop loss) to optimize the trading experience of our users.
For those simply seeking to manage their funds, without actively trading, we will be building out our savings products which currently offer the best interest rates in the market.
But the real key to growth and price appreciation of AAB will lie in our ability as an exchange to offer our users the best investment opportunities and tools for portfolio management. We do this through partnerships with token issuers and projects, but also by offering free weekly market analyses to help our users make better trading decisions.
As we build out these services, our users should expect AAB to increasingly take center stage, either as a means to get discounts, vote, participate in special sales, gain access to data or certain markets, and as the base currency for games and other socialized activities.