In a recent discussion with friends, we talked about which coins should or shouldn't be listed on Binance. It's important to understand that the cryptocurrency market operates as a free market. The liquidity and trading volume across centralized exchanges (CEX), decentralized exchanges (DEX), and various trading platforms form a collective pool. CEXs are not isolated markets. Even if Binance doesn't list certain projects, these projects will still exist and their trading volume and funds will flow into other parts of the industry.
Funds and trading volume will be diverted to various areas, including VC-backed projects, meme coins, native tokens of specific blockchains, and schemes designed to exploit market conditions. Once ETFs are approved, traditional financial markets will also start drawing funds that would otherwise flow directly into the cryptocurrency space.
Looking at venture capital (VC), it's true that some VCs contribute to inflated prices. However, VCs typically raise funds from limited partners (LPs) with a 7-year lock-up period (4+3 years), collecting management fees and dividends. Many VCs unlock their investments one year after the Token Generation Event (TGE), though this isn't universal. Some VCs in the crypto space are going bankrupt, and LP investments can potentially return to zero. Projects with significant funding have better chances of surviving market bubbles, but the fundamentals of a project's token price and governance model are determined by the project team, with no standard answer.
Therefore, before investing, it's crucial to conduct a thorough analysis of project tokens, considering factors like token use cases, release schedules, holding ratios, and initial circulation. There is no universal answer. The rise of DeFi has brought more liquidity to the industry and increased market freedom, complicating the efforts of CEXs to set rules. However, this is part of the appeal of the free market in the crypto world. Always do your own research (DYOR).
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