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Research indicates that 80% of tokens introduced on Binance in the last six months have depreciated in value due to inflated prices during trading, adversely impacting retail investors. The exchange intends to assist small and medium-sized projects to mitigate this issue.
The cryptocurrency exchange Binance has reached out to small and medium-sized projects to address the issue of low liquidity and fully diluted valuation (FDV) of tokens. This initiative aims to support projects with viable business models and solid fundamentals, which should promote the growth of the blockchain ecosystem and enhance trust in cryptocurrencies.
Binance’s initiative followed the release of a report by an on-chain analyst known as Flow, who discovered that more than 80% of tokens listed on Binance over the past six months experienced a decline in value after their listing on the platform. Only a handful of projects, such as Dogwifhat (WIF), Memecoin (MEME), Jito (JTO), Jupiter (JUP), and Ordi (ORDI), were exceptions.
Flow pointed out that most new tokens on Binance are supported by venture capital, launched at elevated prices, yet lack genuine users or a robust community. The average market capitalization of these assets at the onset of trading is approximately $4.2 billion, with a peak valuation reaching $11.7 billion.
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Flow also stressed that the current strategy for token launches is not sustainable and undermines the credibility of the crypto industry. He advocated for reforms to avert further exploitation and long-term detrimental effects on the sector. In response, Binance’s research team observed that launching with a low circulating supply is becoming increasingly prevalent in token projects that reserve a significant portion of token supply for future distributions. Consequently, Binance plans to revise its approach to token listings by inviting small and medium-sized projects to apply for listing initiatives such as Launchpools and Megadrops.
Projects from any segment of the crypto market are eligible to apply for listing on the exchange. The primary criteria that Binance will evaluate include:
- allocating a substantial number of tokens for users: airdrops, community rewards, etc.;
- moderate token float during token generation events (TGE);
- strong product-market fit (PMF);
- self-sustaining business model;
- minimum viable product (MVP);
- organic user base and consistent user growth.
Binance retains the authority to determine at its discretion whether a project qualifies for listing on the platform. To apply for participation, projects must complete the relevant form.
Analysts at CoinGecko estimated that approximately 5,300 new tokens are created daily, and in April 2024, the total number of digital assets surpassed 2.52 million.
Сообщение Binance Changes Approach to Token Listing появились сначала на CoinsPaid Media.
