Original author: Ice Frog, cryptocurrency researcher.
As the top player in the industry, Binance has recently faced increasing market FUD. Simon, marked as the CEO of MoonrockCapital on platform X, claimed that Binance charges 15%-20% of the total token amount as a listing condition, which sent ripples through the market, rapidly raising the discussion's intensity with both supportive and opposing voices; some even harshly believe Binance may be the biggest tumor in the industry, while others argue that this is not Binance's responsibility, but a problem of the project party or the industry's own development issues.
Ultimately, Binance's top lady publicly responded on social media: if it hasn’t been screened by Binance, no amount of money or listing fee can get listed on Binance; token distribution is all public, and Binance cannot possibly charge such a high proportion of token distribution.
Regardless of whose statements behind the mutual insults are the truth or if it is just a case of commercial competition, at least from the top lady's response, we see her using her own reputation to save Binance's reputation, proactively and timely addressing such doubts. The top lady has earned the community's respect in the past and present with her honest and direct attitude.
However, this type of doubt is neither the first nor the last; it highlights Binance's development dilemma in recent years under external regulatory crackdowns and peer squeezes, and internal community skepticism. The real crisis has never been hidden in superficial challenges, just like defeating Binance will certainly not be another Binance.
1. Is FUD really just rumors: 'Victim mentality' and 'who the enemy really is.'
Let’s assume that the response from the top lady is true; FUD is indeed a dark side of commercial competition. But unfortunately, the public never possesses independent thinking; otherwise, it cannot be called the public. From countless historical lessons, an obvious truth is: the collapse of rumors never relies on the public's self-awareness but on irrefutable factual truths. The guidance of KOLs only temporarily disrupts perceptions and does not signify the disappearance of doubts; they could even be the cause of the next more intense FUD.
When FUD is attributed to a conspiracy of commercial competition, the victim mentality implied behind it is unhelpful in resolving disputes. Perhaps there are indeed peers stirring the pot, but that might not be the whole story. When the platform has sufficient persuasive evidence, no one would choose to use such a thankless method to challenge an industry leader; this method only works when you have your own flaws. This is the most basic business logic.
In the face of FUD, first look for problems within yourself, rather than suspecting your competitors; this is the posture a great company should have. The real enemy has always been one's own arrogance, not others. If FUD is viewed as a business tactic, it actually neglects the true underlying crisis.
2. Where does the crisis come from: the transfer of pricing power and liquidity.
1. Liquidity determines pricing power, but the source of liquidity is users.
Binance, at least for now, remains the largest liquidity center in the industry. Those who control liquidity control pricing power; this is an unchanging truth in the financial world. However, from a longer-term perspective, short-term pricing power is generally determined by institutions/exchanges, but in the long run, it always returns to users. If pricing power is abused, the speed of its transfer will accelerate further.
A significant sign of the abuse of pricing power is the indulgence of projects with extremely unbalanced chip structures and poor reputations. Among the projects listed by Binance, there are many with low circulation and high market value, coupled with Binance taking a significant proportion of the chips. This results in investment institutions, project parties, exchanges, and market makers controlling the vast majority of the chips, leaving retail investors to passively take on the burden. Take the recent Scroll as an example.
The initial circulation accounted for only 19% of the total circulation, and an additional 5.5% was allocated for Binance mining, with the remaining various tokens subject to different unlocking requirements over time. A simple arithmetic question: with such a large and continuous selling pressure, who will support it? Assuming the project party has a good reputation and self-sustaining ability, the selling pressure could receive some backflow, further smoothing the entire price curve. The reality is that after the airdrop and TGE, data was almost instantly cut off, and worse, this fundamental collapse was nearly 100% predictable before going on Binance.
Here comes the question:
1) Everyone knows that this is a situation where the fundamentals will continue to be poor, and the token distribution is extremely unreasonable, the reputation is terrible, and it is easy to form continuous control and selling pressure. Why did Binance choose to list it?
2) From the perspective of interests, which side does Binance's screening mechanism stand on?
Combining these two questions, one can at least draw a clear conclusion: from the perspective of interests/user experience, Binance does not give the impression of standing with users, or at least does not prominently consider the interests of the majority of users.
If we truly stand from the user's interest perspective, no competitor can tarnish Binance's reputation, as the sustainable wealth effect in the crypto circle is the greatest truth.
A more notable comparison reflects the role of users as the ultimate pricing power, which is the Grass project, whose financing amount is less than 1/10 of Scroll, yet the former currently has a total market value of over $1 billion, while the latter is over $500 million.
Even in the pressure of token unlocks, Grass's early circulation was not significantly large; however, its fair and sustainable airdrop earned the project a good reputation among users, ultimately reflected in substantial ongoing purchases by users, allowing the project to continue increasing incentives for users, thereby continuing to give back to users.
The same environment, the same project, different fates. It clearly reveals that no matter how top-notch the technology or splendid the financing background, even with the enhancement of top exchanges, if users do not buy in, the speed of the collapse of this harvesting chain will only accelerate, and each collapse consumes the foundation on which Binance stands, and the transfer of pricing power will also speed up.
2. The transfer of liquidity: human nature chases greed, but the premise is fairness and transparency; on-chain Dex has incomparable advantages.
Whether the crypto circle is a big casino is momentarily aside, but it absolutely adheres to the basic laws of casino survival: it is not afraid of you making money, but afraid of you not playing. Contrary to most people's intuition, legitimate casinos in Macau often focus significantly on fairness, justice, and transparency to dispel gamblers' concerns; casinos do not rely on cheating to make money, they rely on statistical advantages to amplify profits.
In terms of fairness, transparency, and justice, decentralization naturally has a stronger advantage than centralization. The growth of Dex is mainly constrained by user experience, but in the face of the wealth effect, the impact will be minimized. Data confirms this: according to The Block & Defillama's data, by October, the ratio of Dex's spot trading volume relative to Cex has risen to a historic high of 13.84%, and this ratio is steadily expanding.
Not to mention that due to the recent popularity of MEME, platforms like Pump.fun have successively spawned several MEME tokens with a market cap of over $1 billion, with daily transaction numbers exceeding 670 completed trades and daily trading volume averaging over $1 billion.
The data behind reflects that liquidity is gradually being seized by on-chain Dex or hot topics like MEME. Although the risks on-chain for novice players are higher, few question the problems of decentralized platforms because they provide a relatively fair gaming environment.
The important difference between Cex and Dex lies in the foundation on which centralized exchanges are established: users return the power to select tokens to the platform. Either you treat everyone equally without setting thresholds or set a low threshold, or you establish a high threshold but ensure sustainable value. The worst-case scenario is establishing a high threshold and choosing a garbage project.
There is also a misconception that some centralized exchanges easily fall into an elite agency model; they do not believe they are choosing a garbage project. Most personnel responsible for such businesses have impressive resumes and institutional backgrounds, and they overly trust that capital can change the world, harboring unrealistic fantasies about so-called technology, naturally inclined to believe in institutions, or think they can see the future direction of the industry, calling it: the direction of the industry.
Taking Scroll as an example again, besides appearing technically advanced and having impressive financing, where does its true value lie? Is it really irreplaceable? If it is not irreplaceable, what is the logic behind choosing it? The so-called strict screening mechanism loses its meaning if it does not consider the project's reputation and the vision of the founding team.
Binance's listing of a coin signifies whether a project succeeds or fails; this is the power that users give to Binance. If this power is not well used, users' doubts are entirely justified.
3. Some discussions: The crisis of Binance and the industry crisis.
Nobel laureate in behavioral economics, Richard Thaler, has a famous theory: in decision-making, people weigh interests unevenly, giving more consideration to 'avoiding harm' than 'seeking benefit.'
From 'anti-VC coin' to 'MEME craze,' this is essentially a vivid demonstration of this theory. In the visible range to the naked eye and through a telescope, the risks of buying VC coins continue to increase. If you account for the time cost of being trapped and the potential upside of high valuations, the profit space becomes extremely narrow. Thus, for ordinary users, VC coins listed on Binance have turned into an event where the 'harm' outweighs the 'benefit.'
You might say Binance is just a trading venue, like a casino, an objective and neutral third party; trading naturally has wins and losses. However, the objective reality cannot replace the objective facts. The real objective fact is: even casinos do not launch games where you lose ten times for every ten bets. In the case of VC coins, almost no retail investors have won, and this consensus is indisputable at this stage.
Furthermore, regarding project selection, if a truly objective and neutral exchange exists, the rules should be transparent, just like the NYSE or NASDAQ. Currently, in this industry, the listing process of leading exchanges remains a black box, relying on people's guesses and inferences, thus possessing supreme power; some exchanges have a semi-transparent listing state, offering close to zero threshold (you can get listed by paying). Both are undesirable because the former specializes power, likely leading to arrogance and a small circle of interest groups even without corruption; the latter monetizes power, charging exorbitant tolls, which raises project costs and slows down innovation.
From a broader context, the current industry crisis is apparent. Without greater liquidity overflow, BTC is becoming independent of the entire crypto market; it is gradually being controlled and priced by Wall Street capital. Other altcoins either cannot find a path forward like Ethereum, or completely turn towards MEME. A sense of worthlessness looms over the entire crypto circle, especially after most valuable coins have been repeatedly debunked, more users have lost faith in whether projects are being built. After all, when even the largest exchange chooses to believe in these so-called project teams rather than users, this confidence and sense of worthlessness collapses even faster. The rise of MEME itself is a loss of confidence in the narrative of so-called industry development.
As the de facto industry spokesperson, Binance should bear more responsibility and user expectations. Pushing problems onto peers is not as good as facing its own systemic loopholes. What users need is fairness; damn it, it's fairness. For projects like Scroll, Binance took a large proportion of the chips with almost no cost, making it hard to say this is fair, and even harder to argue that this is beneficial for the project and industry development.
From the perspective of traffic and status, you could say there’s no problem, but don’t forget where the traffic comes from, and an old saying: water can carry a boat, but it can also capsize it.
Do we still need Binance? There is no doubt that we do; no one denies the tremendous contributions Binance has made to the industry. We still believe in the professional ethics of industry pillars like CZ and He Yi. However, as previously mentioned, this is not an individual issue; it involves the operation of the entire mechanism and the ecological problems of the broader environment. How to solve these issues remains unresolved, and there is no clear path yet. What we expect is that Binance truly stands on the side of users, leveraging its influence and substantial energy to reverse the current situation, allowing users to rebuild their confidence in 'valuable coins' and the entire industry.
From Binance's own perspective, whether users can do without Binance, and whether its irreplaceability is declining is a question worth pondering for Binance's management, especially in an industry environment where Dex trading volumes continue to rise, on-chain MEME continues to be popular, regulation is becoming stricter, and competition is intensifying.
Remember, historically, no company has ever gone bankrupt due to too many rumors; most have collapsed due to the confirmation of those rumors, ultimately fading due to arrogance.
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