Analysis: Chinese Crypto Exchanges’ Financial Products
Financial products of the major crypto exchange in China are focusing on depositing crypto to generate interest, and the interest comes from the income of leverage trading is lower than the average level; Crypto wallet is the most used access to provide financial products, involving deposit, Staking, funds, options, among which the earning of Staking is the highest; DeFi’s lending assets are dominated by stable coins, and the income fluctuates greatly.
Crypto exchanges sacrifice profits to predominate in market shares
Chinese major crypto exchanges such as BitMax、BKEX、Gate.io、OKEx and Binance all allow users to deposit their coins to generate interest, which includes fixed deposit and time deposit. Usually, fixed deposit products are sold within a limited time and amount. And time deposit products also have their caps.
The income of financial products allocated by OKEx and Binance mainly comes from the partial lending interest of the leveraged trading. The financial products’ income of Gate.io mainly comes from the platform profit. BitMax and BKEX have not yet published the sources of income on the official website.
Generally speaking, currently, the deposit and interest-bearing products are focusing on mainstream cryptos like BTC, and the sources of income affect the kind of supported coins and anticipated annualization of financial products.
Lending assets are dominated by stable coins, whose interest rates are lower than other financial products
At present, the supply of lending funds for lending products far exceeds the demand for borrowing, and the number of deposit operations on chain is also higher than the number of loan operations.
The income of lending assets provided by lending products is with the greatest change in all financial products, which is related not only to the conditions of the secondary market, but also to the rate of deposit to loan assets, as well as to the mechanism of the lending products themselves.
The average income of all lending products is about 4.81%, which is only slightly higher than that of some time deposit products provided by wallets and exchanges, and much lower than that of fixed deposit and Staking products.
Earlier this month, Binance announced the acquisition of crypto exchange JEX which offers spot and derivatives (including options and futures) trading in cryptocurrencies. More and more Chinese crypto platforms are eyeing on financial products to cater to almost all the market needs.
Exchanges, wallets, mining pools and DApps in China have unlocked the deposits of crypto, but most of the deposit and fund products are managed by centralized addresses. How to balance the efficiency and security of interest generation will be the focus of the investors.