According to Cryptorank, there are 1,375 trading pairs and several hundred assets available on the Binance crypto exchange, each of which can be bought or sold in just a few clicks. For the crypto market, Binance is a kind of quality standard, offering users a convenient interface, liquidity and security, so the listing of a token on this site is a game changer for the project itself and a bullish signal for speculators.
In this article, we will look at what listing is, what criteria the largest crypto exchange uses to select assets, and how listing on Binance affects the token itself.
This article was produced by Incrypted and is intended for educational purposes. We hope that the material will help you better understand and study the cryptocurrency market.
What is listing on an exchange
The main task of a crypto exchange is to offer tokens for trading or purchasing. When an exchange adds a new coin, it is called a “listing.”
On exchanges, assets are traded in pairs: you give up one asset and receive another in return. The BTC/USD pair means trading Bitcoin with the dollar. BTC/ETH - Bitcoin with ethers, and so on. At the same time, enough liquidity has accumulated in the associated trading pair to cover trading volumes.
By what criteria does the exchange add a new token?
Each platform has its own set of rules by which they approve a listing application. But overall they are similar.
Popularity of the token: exchanges make money through volumes. Therefore, there is no reason for them to add coins that are not in demand.
Long-term business plan: for what purposes the team created the crypto project, and how it plans to develop it.
The technical side: a strong development team and technical security.
Compliance with laws: lawyers ensure that the asset does not raise questions from regulatory authorities. Especially recently, when US regulators began to call almost every coin a security.
In one of the interviews, the head of Binance admitted that he considers the number of users to be the main criterion for listing. CZ agrees that there are many other important indicators: the number of active addresses in the blockchain, subscribers on social networks, code audit results. However, the number of users is the "key" indicator:
“If a digital coin has a large number of users, we will list it. This is the most important feature. Take meme tokens for example: although I personally don't like them, if a lot of people use them, we start supporting them. The indicator is the community, my opinion does not matter here"
The exchange provides a complete list of criteria on its website. Here are some listing tips from the Binance founder himself.
Binance Launchpad и Binance Launchpool
The cryptocurrency exchange also offers important services for the development of startups - Binance Launchpad and Binance Launchpool.
Binance Launchpad helps projects raise their initial round of funding. This is an alternative to ICOs, which were popular a couple of years ago. At the same time, the exchange undertakes a wide range of services - marketing, PR, community management and much more. All this should help projects increase their recognition and reach a wider audience. Binance Launchpool helps young projects farm profitability.
Listing fee
Exchanges have repeatedly emphasized that they do not charge a fee for adding a coin. But there is some guile in this, because listing can still cost a considerable amount. Binance has something called listing fees. They do not set a specific amount and all proceeds from commissions go to the Binance Charity Foundation.
Binance fees have been the subject of several scandals. For example, in 2019 they were caught taking a “bribe” from Blockstack for listing STX tokens. Then they transferred $250 thousand to the exchange. Later, the parties called this a “unique agreement that emphasizes the seriousness of their intentions.”
Other crypto exchanges often come across paid listings. Bithumb Holdings and Coinone were recently caught doing this.
Impact of listing on value and trading volumes
For years there has been talk about the “Binance effect”. When new coins appear on this exchange, their price increases significantly.
An analyst at Ren& Heinrich researched this topic. He found that after listing on Binance, coins increased in value by an average of 41%. The expert examined 26 tokens added to the platform over the past 18 months.
However, such an increase only occurs on the first day. On average, on the third day, tokens fall by ~24%.
For example, consider a listing from the Magic project (MAGIC). After the announcement on December 12, the value of the coin increased by 75%. The listing itself took place the next day:
The first couple of days the listing really helped MAGIC rise in price. But then the token returned to the previous indicator. Later, after a couple of months, MAGIC has grown noticeably, but this is due to the project itself, which is developing its metaverse. The growth factor of the entire market since January of this year also had an impact.
To sum it up: listing really helps the project get temporary hype. But lasting success will only come if the team is interested in its brainchild.
What are tokens
Tokens are electronic assets that are not issued by a centralized authority and have no paper equivalent. This makes them independent from governments and regulatory authorities. Each coin has its own digital code, reliably protected by cryptographic algorithms.
But in order to buy tokens, they must be traded somewhere. For this purpose, there are centralized and decentralized exchanges.
In any case, listing on Binance will be an important plus for the project’s reputation. Therefore, startups are carefully studying how to get to this platform.
Listing on Binance: step-by-step guide
Binance has repeatedly emphasized that they have strict requirements when listing new tokens.
To begin with, there are 4 basics that any token must meet in order to be listed on the exchange:
Strong project team.
Reliable technological component.
Working platform.
Legal purity.
Managers are guided by these criteria when analyzing applications.
Point 1 means that they look at who is behind the development of the project. If this is a project with a strong name or respected specialists, then they have a better chance of getting credit than unknown people with private profiles on social networks.
The same goes for the other points. Specialists from different fields (technicians, lawyers) will carefully check each candidate. Therefore, the listing procedure is never quick. It takes several months, sometimes six months or more.
Listing process, application and other steps
The listing process on Binance can be divided into 5 steps:
Initial consultation, collection of information on the listing procedure.
Preparation of the application and necessary documents.
Perform technological tasks required for the listing process.
Other (non-technical) changes to the project that will make listing on Binance easier.
The listing procedure itself.
The first step is to apply for a listing. This is done from your account through a special form. There, first we indicate general information - the name of the project, the name of the token, the symbol, and our email.
Next, the support team contacts the participant and discusses the initial points, offering different listing options. After this discussion, the candidate submits a more detailed application and legal documentation.
Be prepared that you will have to fill out the application long and carefully. The following information is indicated there:
The name of the project, its website and a short description in one sentence.
Team size and composition, information about the applicant and project goals.
Whitepaper and roadmap.
Information about the token and tokenomics: market capitalization, maximum supply, number of coins in circulation, supported standards, etc.
Current status of the project, business model and market assessment of the project. In the audit, it is advisable to describe in detail the market opportunities, uniqueness, potential user base, etc.
Signed non-disclosure agreement (this is a mandatory requirement of Binance).
Partnership with a market maker or liquidity provider. It will be a big plus if the project can enter the exchange with a market maker.
In total, the Binance list can include up to 70 questions, depending on the project.
After approval of this step, the candidate passes into the hands of technical experts. They may ask you to remove any obstacles that may hinder the listing or integration process. In some cases, projects in the Binance DEX category will need to migrate to the Binance Chain network. So be prepared that the technical part will also take some time.
If everything goes well, then the final documents will be signed and details clarified. Also, a couple of days before the listing, the exchange will make an announcement on its website.
Delisting
Delisting is the removal of a token and all trading pairs with it from the exchange's offering.
The decision to delist can be made by the project team itself or by the crypto exchange. The reason is various factors:
Low popularity of the asset.
Failure to comply with listing rules.
Violation of the laws of one of the countries (then the token can only be shared from the local platform).
Technical difficulties of the project (for example, attacks, exploits, stopping smart contracts).
Criminal or reputational scandal associated with the project.
You can track tokens that are delisted on Binance here.
After delisting, users will be able to trade the token on other platforms that support it, as well as through OTC - over-the-counter transactions.
Conclusion
There are thousands of cryptocurrencies in the world today. But listing on Binance has become a kind of sign of quality. It shows that the project has been tested and has prospects for success.
And, of course, the listing of new tokens gives traders a chance to make money on the short-term hype. So don't forget to check for news about new listings on the Binance exchange.
