Binance, the world’s largest cryptocurrency exchange, is taking a stricter approach to listing new projects following the boom in meme tokens and concerns about protecting investors. This move comes at a time when the crypto market is experiencing a bull run as new projects compete for attention and exchange listings. Previously, Binance had a more liberal policy regarding the acceptance of new tokens, which had led to many delistings in the past. Now the exchange aims to standardize and speed up the listing process, while also prioritizing projects with clear benefits and long-term plans beyond just meme-driven hype.
Binance and Kraken impose new rules on altcoin listing
During the most recent bull market, new listings exploded trying to capture the hottest projects. Some have succeeded by quickly withdrawing liquidity. Kraken and Binance are still ready to add new tokens to their various trading layers, but they are also careful to accept the right type of crypto project. One of Binance’s biggest concerns is the implementation of projects that provide large allocations of tokens outside of community distribution for developers and venture capitalists (VCs). This can lead to significant market declines despite long vesting schedules as early investors try to cash in.
To address this issue, Binance’s new listing rules emphasize a broader distribution of tokens with minimal allocation outside the community. This aims to create a more stable market environment and prevent price manipulation by large token holders. To support informed user decisions, Binance will now require projects to provide a full history of their tokenomics, including details such as total supply, distribution schedules, and vesting periods. This information will be easily accessible on listing pages, allowing users to evaluate potential risks and rewards before investing.
Obligation to disclose FDV
Another focus is on projects that have a small “float”, meaning a limited number of circulating tokens compared to the total supply. This practice can inflate valuations and create misleading market values. Binance aims to prevent such situations by requiring projects to disclose their Fully Diluted Valuation (FDV), which takes into account all tokens that end up in circulation. Interestingly, even established tokens show a complete lack of dilution; Only 24.7% of top blue chip tokens are fully diluted.
Large-cap coins perform better with a 54% dilution, while newer launches and meme coins generally have a much smaller volatility. While the meme coin craze has attracted funds and built communities, it has raised skepticism due to its volatile nature and focus on virality over utility. This phenomenon, combined with the resurgence of interest from venture capitalists in crypto startups, has contributed to the low-volatility, high-value listings that Binance is now trying to organize.
The boom in the crypto market has seen the return of VC funding for blockchain projects. This trend results in well-funded startups with strong teams, but often a significant portion of tokens are reserved for early backers and VCs. Binance’s new rules aim to ensure that these projects exhibit broader community distribution as well as financial support.
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