The 2020 and 2021 bull market was very different from 2017 and 2018. The massification of stable currencies such as the USDT, DAI and USDC, as well as its expansion into other networks such as Ethereum’s ERC20 and Tron’s TRC20 managed to attract more users to the crypto market.
However, there is a reason why so many new holders and speculators came and stayed: the improvement in the services provided by CEX or centralized exchanges.
Users and consumers do not arrive alone. In a market as competitive as CEX, the use of referral marketing helped greatly to attract new customers from the retail sector. Here we will explain some of these techniques.
Affiliate marketing versus referral strategy
Referral marketing is not a pyramid scheme, rather it is a non-traditional strategy of advertising and attracting more purchases. In Amazon there is Affiliate Marketing, which is quite similar. Every time we look for information about a dryer or some pans we find thousands of pages that redirect to a purchase link on Amazon.
However, this type of affiliate marketing usually only benefits the multinational, the seller (if different from Amazon) and the owner of the affiliate page. In the vast majority of cases the buyer sees no benefit in buying through those links.
Referral marketing on cryptocurrency exchanges is different because it offers a service and not a product.
In addition, commissions for trading within a CEX are quite low, which certainly attracts a lot of retail investors, regardless if they can only trade a few dollars or euros a month. It is common for commissions to operate in Spot to be less than 0.5%.
Buy cryptocurrencies as referred
Unlike affiliate marketing, exchange referral strategies often offer advantages for both referrers and referrals. The main one is that the exchange assigns a part of the commission to the referent and the referee is discounted, so when registering with a referral code, the referee is sure that he will have a discount on all the transactions he makes in the exchange.
Do you want to buy cryptocurrency without an exchange or referral code? Or exchange ADA to BNB on Changelly? You can do this through Changelly.com, where you don’t have to worry about the high withdrawal fees imposed by centralized exchanges.
Video bloggers, influencers and streamers, especially if they focus on crypto issues, are the ones who send the most referrals to centralized exchanges. Of course, with word of mouth someone can convince two or three friends to buy crypto, but content creators have a large following that can register with CEXs.
A rewarded education
There is a motto that is constantly repeated in the crypto world: DYOR (Do your own research), which implies that everyone should do research before investing.
But with so many blockchains, concepts, protocols, and analysis concepts, it’s not easy to learn about cryptocurrencies.
That’s why many CEXs offer rewards for learning about cryptocurrencies through videos. Examples include the airdrops offered by CoinmarketCap in partnership with Binance, or the reward satoshis offered by OkEx for learning about cryptocurrencies.
Exchanges usually do tests or exams to check that users have learned and finally assign cryptocurrencies.
There is another case where learning is not rewarded, but rather demanded. Many exchanges ask their users to pass tests on how to trade cryptocurrencies, especially when it comes to margin trading and derivatives trading, where money is risked more easily.
The growth of exchanges
Without a doubt the crypto option has increased over time. There are many reasons for this, such as the growth of stable currencies and the encouragement of the Coronavirus in the United States. Among them, referral strategies and crypto rewards offered at exchanges may have contributed more than you think.
An example of this is Binance, which is currently considered the centralized exchange with more users in the world. In 2017 it had 5.8 million users, while in 2020 there were already at least 100 million. Other centralized exchanges offering referral programs are OkEx, KuCoin, Uphold and Ho