Popularly known as the ‘Chinese Ethereum’, the Neo cryptocurrency was introduced in the year 2014. It has been gaining plenty of positive attention from all quarters over the past few months and has been in a resurgent mode ever since its drop in 2018. New users often find it difficult to shortlist exchanges for their needs.
This guide will discuss some important aspects/questions, including the meaning of a Neo exchange, how such exchanges work & differ from broker platforms, key points to keep in mind when selecting an exchange and the best Neo exchanges in 2022.
Our List of the Top Neo Exchanges
This guide will shortlist some of the best Neo exchanges in the market today, and their advantages and unique features.
What is a Neo Exchange?
In the context of cryptocurrencies, a Neo exchange can be termed as an online platform where buyers and sellers can get together and freely exchange Neo and its tokens, against fiat currencies or other cryptos. The platform functions as a mediator between buyers and sellers and is usually paid a commission for its services.
How do Neo Exchanges work?
While different Neo exchanges might have different interfaces and processes, when it comes to using the platform, there’s a basic procedure that must be followed by all traders. This involves registering with the platform, making a deposit, indulging in trades, and making withdrawals whenever needed. Let’s go through these steps below.
You will need to first register with the Neo exchange and complete all its account-opening formalities, before starting to trade on it. The process may involve uploading a government-issued ID, an address proof as well as providing various personal details like name, email ID, residential address, contact number, etc., depending upon the KYC (Know Your Customer) measures taken by the exchange. On the other hand, some may ask for nothing more than a simple email verification. Please note, trading on a KYC compliant crypto exchange can help you steer clear of antisocial elements, as these platforms normally have strict AML (Anti-Money Laundering) and CFT (Combating the Financing of Terrorism) processes in place.
Making a deposit
Once your account is opened, you will need to deposit funds through fiat and/or cryptocurrency accepted by the exchange. These exchanges usually permit deposits via multiple payment methods including crypto wallet transfers, credit/debit cards, PayPal, e-wallets and bank transfers. You can begin trading once you have funds in your account.
Trading on the Neo
Like a conventional stock exchange, you can trade on a crypto or Neo exchange through ‘Buy’ or ‘Sell’ orders. The prices are normally matched with the help of software used by the exchange. You are also allowed to place ‘Market Orders’ and ‘Limit Orders’ that can enable you to get the best possible deal.
You can place a withdrawal request and easily withdraw your holdings to a preferred fiat currency or cryptocurrency of your choice (so long as it’s offered by the platform). The good crypto exchanges provide a lot of options in this regard.
Using an Exchange Vs a Broker
A crypto exchange is normally a platform where you trade Neo and other cryptocurrencies with multiple buyers/sellers. Functioning as an intermediary between the two parties, the exchange charges a commission for this work.
A crypto broker on the other hand functions as an intermediary between the trader and the crypto market. It’s the broker who sets the price and may earn through multiple revenue channels like spreads, premium etc. In a broker’s case, an exchange happens between the trader and the broker.
Where these two platforms fundamentally differ from each other is the types of trades they facilitate. Whilst crypto exchanges allow for unleveraged trading, wherein you must exchange actual ownership of the cryptocurrencies to complete trades, broker platforms make leveraged trading possible by offering crypto derivative products such as Contracts for Difference (CFDs), Options and Futures. There is no exchange of ownership in the latter and you can get the same exposure level as on a crypto exchange, without tying up large amounts of capital.
Types of Exchanges
Crypto exchanges can be of different kinds depending upon the traders they cater to. Let’s go over the four popular types seen in the market nowadays:
Centralised Exchanges (CEX)
These are crypto exchanges where a central authority holds the entire control over the exchange’s operations. If looked at closely, a centralised exchange’s concept is quite contrary to the whole idea of cryptocurrency, which was to eliminate the need for any such singular entity from the financial world. In such exchanges, it’s the platform that holds the traders’ funds, and the provided trades can be fiat-crypto, crypto-crypto, or both.
Decentralised Exchanges (DEX)
Decentralised crypto exchanges make it possible for traders to indulge in peer-to-peer trading. Almost every single operation of the exchange, including order matching, capital deposits, exchange of currencies, and order book maintenance is decentralised, just what the blockchain technology was meant to achieve. There is no possibility of a single-point failure.
These online entities work more on the lines of a local dealer which buys/sells cryptocurrencies from/to you, and offers/accepts the local currency. Although you can place buy/sell orders with such exchanges, there’s no hard-core trading facility on offer.
Fiat vs Pure Exchanges
While Fiat-Crypto Exchanges are the kinds where you can easily buy crypto using fiat money, a pure exchange is one where you can indulge in only crypto-crypto trades. As can be guessed, the former is quite popular amongst the new crypto investors/traders and make a purchase of cryptocurrencies possible for the general population.
Key Things to Consider when Choosing the Best Neo Exchanges
Anyone who wishes to trade via a Neo exchange should ensure that they opt for the right crypto or Neo Exchange, based on their unique requirements. It is very important to go through all the features offered by the shortlisted portals and refer to their various terms and conditions. In general, there are certain key points you can keep in mind to make the best pick. Some of these are:
- Security - This should be the most important aspect when you go looking for a crypto exchange. The exchange should offer all updated security features, including two-factor authentication (2FA).
- Fees - The commission charged by the trading platform for your trades shouldn’t be higher than other exchanges. Furthermore, the fee structure should be transparent.
- Payment methods – There would be no point signing-up with an exchange if it doesn’t accept your preferred deposit/withdrawal method. All reputed crypto exchanges offer a good variety of payment methods such as credit/debit cards, wallet transfers, bank transfers, etc. to the traders.
- Privacy – If anonymity is high on your priority list, you must opt for a crypto exchange that asks for minimum personal details.
- Customer service – The exchange should preferably offer round-the-clock customer service via all popular mediums like live chat, phone, email, and social media.
- Ease of use – The platform should have a simple and easy-to-understand user interface, making it suitable even for beginners.
Pros and Cons of Using Neo Exchanges
Users should carry out trading only on a reliable Neo exchange where you can be sure of the security of your funds. In view of all this, we shared with you some important details related to Neo exchanges in this article, such as the meaning of a Neo exchange, how it works & differs from a broker platform, key points to remember while selecting one and the pros & cons of such portals.
Frequently Asked Questions
The buy/sell prices on a Neo exchange are mostly derived from the buyer/seller activity.
Yes. Please note, the charged fee is not based on the profit/loss figure, rather the amount traded.
Yes, many crypto exchanges offer a downloadable app and/or a mobile-friendly site version, which enables you to trade any time of the day/night from your mobile phone.
No, as long as you use a reputed, reliable and preferably a KYC-compliant exchange.
These exchanges employ multiple revenue streams including market-making, listing fees and commissions.
Neo exchanges are legal in most countries of the world but cross-check about their legality with your local laws.
Select any of the options such as bank transfer or credit/debit cards to deposit funds.
No, most crypto tokens have high divisibility and you can easily buy/sell small-portions of them.