Chart of profit sharing in the currency circle

Binance's profit sharing program rewards users who hold BNB and actively trade with a portion of the exchange's trading fees, with potential profits varying based on BNB holdings, membership level, and trading volume.

Jan 11, 2025 at 01:02 pm

Chart of Profit Sharing in the Cryptocurrency Circle

Key Points:

• Overview of Profit Sharing Models in Cryptocurrency
• Binance's Profit Sharing Program
• Overview of 5 Major Crypto Exchanges
• Comparison of Profit Sharing Models Among Exchanges
• Calculation of Potential Profits from Profit Sharing
• Steps to Participate in Profit Sharing Programs
• FAQs on Profit Sharing in the Cryptocurrency Circle

Overview of Profit Sharing Models in Cryptocurrency

Profit sharing in the cryptocurrency circle refers to the distribution of a portion of an exchange's profits to its users. This model rewards users for actively trading, holding, and participating in the exchange's ecosystem. Profit sharing programs can vary significantly across exchanges, with different criteria, rewards, and payment structures.

Binance's Profit Sharing Program

Binance, the leading cryptocurrency exchange globally, introduced a profit sharing program in 2019. Under this program, a portion of Binance's trading fees is distributed to users who hold Binance Coin (BNB). The exact profit sharing percentage varies depending on the user's BNB holdings and membership level.

Eligibility for Binance Profit Sharing

• Users holding at least 50 BNB
• Users who have completed KYC and 2FA verification
• Active traders who generate a minimum trading volume

Profit Sharing Calculation

Binance distributes 20% of its trading fees among eligible users. The profit share is calculated based on the following formula:

Profit Share = User's BNB Holdings ÷ Total BNB Holdings in Binance Exchange × 20% × Trading Fees

Overview of 5 Major Crypto Exchanges

1. Crypto.com

• Profit Sharing Model: CRO Staking rewards
• Potential Returns: Up to 20% APY on CRO staking

2. KuCoin

• Profit Sharing Model: Share dividends in KCS
• Potential Returns: Up to 50% of exchange profits distributed to KCS holders

3. OKEx

• Profit Sharing Model: OKB buyback and burn program
• Potential Returns: OKB buyback value distributed to token holders

4. Gate.io

• Profit Sharing Model: GT token buyback and distribution
• Potential Returns: GT token distribution to eligible holders

5. Huobi

• Profit Sharing Model: HT token dividend distribution
• Potential Returns: Quarterly dividend distribution to HT holders

Comparison of Profit Sharing Models Among Exchanges

Exchange	Profit Sharing Model	Potential Returns	Eligibility Criteria
Binance	BNB Staking	0.00625% - 0.04% of trading fees	50+ BNB holdings
Crypto.com	CRO Staking	Up to 20% APY	CRO token staking
KuCoin	Share Dividends	Up to 50% of exchange profits	KCS token holding
OKEx	Buyback and Burn	Value of OKB buyback distributed	OKB token holding
Gate.io	Buyback and Distribution	GT token distribution	GT token holding
Huobi	Token Dividend	Quarterly dividend distribution	HT token holding

Calculation of Potential Profits from Profit Sharing

To calculate the potential profits from profit sharing, users need to consider:

• The exchange's profit sharing percentage
• Their holdings of the exchange's native token
• The estimated trading volume during the profit sharing period

For example, assuming Binance distributes 20% of its trading fees, a user with 100 BNB holdings and a trading volume of $100,000 during the profit sharing period could potentially earn:

Profit Share = 100 ÷ 100,000,000 × 20% × $100,000 = $40

Steps to Participate in Profit Sharing Programs

1. Choose an exchange that offers a profit sharing program.
2. Create an account and complete KYC and 2FA verification.
3. Purchase the exchange's native token and meet the minimum holding requirements.
4. Actively trade or stake the native token to increase potential rewards.
5. Monitor the exchange's profit sharing updates and announcements.

FAQs on Profit Sharing in the Cryptocurrency Circle

Q1. What is the average profit sharing percentage among crypto exchanges?

A1. The profit sharing percentage varies widely depending on the exchange. Binance offers 20%, while Crypto.com offers up to 20% APY on CRO staking.

Q2. How often are profit sharing rewards distributed?

A2. Profit sharing rewards are typically distributed daily, weekly, or monthly, depending on the exchange's policy.

Q3. Is it guaranteed to make a profit from profit sharing programs?

A3. No, profit sharing programs are not a guaranteed source of income. The potential profits depend on the exchange's performance, trading volume, and the user's own participation.

Q4. Can I hold multiple exchange's native tokens to participate in profit sharing?

A4. Yes, you can hold multiple exchange's native tokens to participate in their respective profit sharing programs, increasing your potential rewards.

Q5. Is profit sharing taxable?

A5. Yes, profit sharing rewards may be subject to taxation depending on the laws of your jurisdiction.