Everything You Need to Know about the BANANA Token – The Native Token of ApeSwap Decentralized Exchange
ApeSwap is a disruptive Decentralized Exchange (DEX) and Automated Market Maker (AMM). I am optimistic that this platform will be a force to reckon with in the Binance Smart Chain (BSC), where it will favorably compete with the other decentralized cryptocurrency exchanges and Automated Market Makers (AMMs).
Today, we will not be talking about how impressive this AMM is. We would rather be focusing on the awesomeness of the BANANA Token, which is the native crypto token that powers the broader ApeSwap ecosystem.
WHAT IS BANANA TOKEN?
BANANA Token is the native crypto token that powers the ApeSwap Finance ecosystem. The name was obviously selected because of the significance of the name of the project – ApeSwap.
Apes, just like monkeys, are known to consume more bananas. So, the ApeSwap team thought it wise to use a similar name for the native crypto token that will power the platform. Hence, the selection of the name, BANANA as the token name for ApeSwap.
WHAT TYPE OF TOKEN IS BANANA TOKEN?
This where the twist is. For some cryptocurrency enthusiasts, it is better to create crypto tokens that are deflationary, because that is one of the best ways to facilitate an increase in the value of such tokens.
When the tokens are burned over time, the demands will be higher. That would, in turn, cause the value or price of the token to skyrocket.
However, that is not the case with the BANANA Token, the native crypto token for ApeSwap Finance AMM. The team has already provided some reasons why the token is designed to be inflationary instead of deflationary.
First, the BANANA Token is mostly used as incentives for Liquidity Providers (LPs), who contribute and provide liquidity used for facilitating transactions on the ApeSwap decentralized exchange. As such, designing or delegating the BANANA Token as a deflationary token may not work in this case because liquidity will be needed at different intervals. And the Liquidity Providers (LPs) need to be incentivized with the BANANA Token.
Second, the reduction of the supply rate for the BANANA Token may have negative effects on the growth of the ApeSwap exchange. For example, if there are no more tokens to be used as incentives for the Liquidity Providers (LPs), those LPs may have no other choice than to stop providing liquidity to the ApeSwap decentralized pool. When that happens, it will take more time for transactions to be completed.
Also, you will be required to pay higher transaction fees because the slippage will be high.
BANANA Token also has a fair distribution. According to the ApeSwap team, 25% of the emitted BANANA Tokens will be used as block rewards that are used for rewarding or incentivizing the Liquidity Providers (LPs).
The remaining 75% of the emitted BANANA Tokens will be distributed to the farms where yield farmers will either stake their crypto assets to farm the new token or stake their crypto assets for the long-term to earn more APYs.
BANANA Token may not be like the other exchange-based tokens in terms of the token type and minting mechanism, but it has a solid use case that cannot be ignored.
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