Recently, there has been a discussion in the cryptocurrency community about the listing standards of Binance Exchange. The well-known cryptocurrency KOL @Aunt_ww criticized that Binance frequently lists projects initiated by venture capital institutions (VCs), the quality of these projects is uneven, resulting in the dilution of market funds and retail investors eventually becoming leeks.
@Aunt_ww said that Binance is currently frequently listing token projects led by VC institutions. These projects are generally of low quality and can easily enter the Binance exchange with high listing fees. After these "insiders"-led projects are bought in large quantities, there is often a serious phenomenon of draining liquidity pools, causing the prices of these projects to fall sharply after being hyped up. This not only dilutes the liquidity of the entire cryptocurrency market, but also makes retail investors the target of VC institutions.
This practice has violated the original intention of fairness and openness in the cryptocurrency market and harmed the interests of ordinary investors. She called on Binance, as an industry giant, to take responsibility for maintaining the healthy development of the cryptocurrency ecosystem, carefully evaluate token projects, avoid over-reliance on VC-led projects, and maintain fairness in the cryptocurrency market.
In response, Binance co-founder and CEO He Yi said that Binance's listing policy did cause some controversy, but this is an inevitable trend in the development of the cryptocurrency market, and Binance is just complying with market demand. There is a trend of decentralized funds in the cryptocurrency market. Even if Binance does not list these highly valued VC project coins, market funds are likely to be diverted to meme coins, Ponzi schemes, ETFs and other speculative products. As an industry leader, Binance has not violated the spirit of fairness of cryptocurrency. On the contrary, while providing investors with more choices, it has also promoted the development of the cryptocurrency market.
He Yi said that Binance's listing standards are not a simple black and white issue. Binance's listing standards include factors such as the technical level of the token project, the team's strength, and market demand. Projects will not be automatically listed simply because they are VC-backed. He Yi also pointed out that Binance's listing standards are not entirely determined by itself, but by community voting.
Binance only provides an open and transparent channel for listing coins, giving more projects the opportunity to enter mainstream exchanges. It is not fair to deny Binance's listing mechanism just because of some projects of varying quality. Binance has always been committed to providing more liquidity and services to the cryptocurrency market, but the allocation of market funds depends on the choices of investors.
In addition to the response from Binance executive He Yi, some other experts have further analyzed the reasons behind Binance's frequent listing of VC coins and their impact on the market. An analyst who wishes to remain anonymous said that Binance's motivation for listing VC coins may be two-fold: one is to obtain listing fee income; the other is to maintain trading volume and platform activity.
"As the largest cryptocurrency exchange, Binance must constantly launch new trading products to attract users. But this often sacrifices the quality of projects in favor of quantity," the analyst said. "As a result, market liquidity is diluted and the interests of retail investors are harmed."
In addition, there are also views that Binance's large-scale listing of VC coins may also cause the entire cryptocurrency market to fall into a bubble. A senior cryptocurrency investor said: This round of VC coins currently looks like a re-creation of the Internet bubble in 2000. A large number of infrastructure projects without many actual users are listed at a price of one billion US dollars, and the exchange users finally pay for it. I sincerely hope that as listed in the new plan, more small and medium-sized market value innovative projects will be supported to land as soon as possible, activate the potential new protocol ecology, and inject hope and confidence in positive development into the industry and market.
As the world's largest cryptocurrency exchange, Binance has always been a target for many project parties to go public. However, industry insiders generally believe that Binance's recent large-scale listing of VC-led token projects has indeed caused some concerns. Some analysts believe that these VC-backed tokens often have problems such as speculation and manipulation, and once they are launched, they are likely to fall sharply, bringing risks to ordinary investors.
However, some experts also said that as a leading exchange platform, Binance needs to meet the needs of investors from different backgrounds. It is not entirely a bad thing to appropriately introduce token projects led by high-quality VCs. The key is that the exchange should carefully evaluate, be transparent and open, and establish a sound risk control mechanism.
This means that Binance may be facing a helpless dilemma. On the one hand, frequently listing highly valued VC projects is likely to cause market controversy and question the fairness of the exchange; but on the other hand, if these projects are not listed, funds may be siphoned away by other assets, resulting in a decrease in overall market liquidity.
In this regard, Binance needs to find a proper balance between project quality, listing standards and market demand. It is necessary to maintain the fairness of the cryptocurrency market and prevent "insiders" from easily entering the exchange with their financial advantages; at the same time, it is also necessary to meet users' investment needs for emerging assets and maintain the overall market activity.
In fact, the trend of fund decentralization in the cryptocurrency market is not unique to Binance, but a common phenomenon in the entire market. In recent years, in addition to traditional head currencies such as Bitcoin and Ethereum, a large number of emerging token projects have emerged, including tokens in popular fields such as GameFi, DeFi, NFT, and Metaverse. These emerging tokens often attract a lot of investors' attention.
At the same time, as supervision becomes stricter, some Ponzi schemes and high-risk speculative products are also spreading, further exacerbating the decentralization of market funds. Industry insiders believe that this phenomenon of fund decentralization is an irreversible trend. The participants in the cryptocurrency market are becoming more and more diversified, and investors' preferences are also more dispersed. This also puts higher requirements on the exchange's listing standards and investor education.
For exchanges, how to strike a balance between regulatory requirements and user needs has become a major challenge. On the one hand, regulatory authorities have put forward more stringent requirements on the listing standards and risk management of exchanges. Stable listing mechanisms, effective risk identification and user protection have become key areas of regulatory focus. On the other hand, users also hope that exchanges can provide them with more investment opportunities in innovative projects to meet the needs of different risk preferences. Overly cautious listing standards may hinder the innovative development of the market.
Faced with this contradiction, exchanges must seek a balance between regulatory requirements and user demands. They must maintain market order and prevent the "bankers" from cutting leeks, while also creating more investment opportunities for investors and promoting the healthy development of the entire cryptocurrency ecosystem.
In general, the controversy caused by Binance's frequent listing of VC project coins reflects the many difficulties faced by the cryptocurrency market in its rapid expansion, which will be an important test for Binance and the entire industry. In the future, exchanges, regulators and the entire industry will need to work together to find a path to sustainable development.
