Binance seems to currently prefer projects with low valuations and high circulation.
Compiled by: Deep Tide TechFlow
Binance's listing standards have always been a topic of great interest in the cryptocurrency industry. Both project parties and VCs hope to understand Binance's listing preferences through various means. Recently, Binance's frequent listing of projects within the Ton ecosystem has sparked controversy. Some believe that these projects lack substantial significance, while others argue that at least they have reached a large number of end users, which is better than infrastructure without users. In fact, Binance publicly announced its latest listing standards in May this year. In summary, Binance currently favors the following types of projects:
Low valuation and high circulation. Correspondingly, Binance seems to currently not favor projects with high valuations and low circulation.
Need to reserve a large amount of token distribution for community users, and reduce distribution to non-community users, which I understand to be VCs and project parties themselves, through airdrops and other means.
Need to have a healthy and viable business model, with at least one minimum viable product.
Must have a real, large, and continuously growing community of users.
In addition, Binance also has its own bottom line, so Binance has stated that it reserves the right to decide whether a project is suitable for listing on the Binance platform.
According to the above standards, several recently listed projects do indeed fall within their framework.
The following is Binance's announcement regarding listing standards:
Dear Binance users,
Binance is committed to creating a healthy and sustainable market environment, always putting the interests of users first. In recent months, we have observed a trend where tokens are issued with high valuations but low initial circulation. We discussed this trend and emphasized its impact in the report titled "Low Circulation and High FDV: How Did We Get Here?"
In order to cultivate a healthy industry and attract various market participants, including projects with low to medium valuations, Binance is taking the lead in attracting small and medium-sized projects. We hope to invite these high-quality teams and projects to apply for our listing program, including direct listings, Launchpools, Megadrops, and more. We aim to promote the development of the blockchain ecosystem by supporting responsible industry participants, small and medium-sized projects with strong fundamentals, organic community bases, sustainable business models, and professional teams.
Why is this important?
Issuing tokens with high fully diluted valuations and low circulation during token generation events (TGE) may lead to future dilution unlocking, which could create selling pressure on the tokens. This market structure is detrimental to retail investors and loyal community members of the project. We are committed to reshaping this trend and creating a more diverse market environment for our users and all market participants.
What are we looking for in projects:
Industry: Projects from all industries are welcome to apply for listing.
Valuation: Lower or medium valuations compared to their industry peers.
Token Economics:
Reserve a large amount of token distribution for community users (airdrops, community rewards, etc.)
Moderate token float during the token generation event (TGE)
Reduce distribution to non-community users
Business and Product:
Good product-market fit (PMF)
Self-sustaining business model
At least one minimum viable product (MVP)
Preference for technological or design innovation
Social Engagement and Community Base:
Organic user base
Sustainable user growth
Compliance:
Responsible market participants, considering regulatory and compliance standards
What are the benefits:
Achieve organic and sustainable growth in the industry based on more reasonable valuations and token distribution.
Better alignment with retail users and the community through fairer TGE.
Binance Launchpool and Megadrop can help increase project visibility and attention.
How to apply:
If your project meets the above conditions, please fill out the application form. If your project passes our internal screening process, Binance will contact you.
Closing remarks:
In order to promote the sustainable development of the cryptocurrency market, we are committed to creating value for users while safeguarding their interests. Actively supporting small and medium-sized capital projects is one of our methods to mitigate certain risks in the market. We sincerely invite all eligible projects to apply for listing on Binance and work together to create a more balanced and robust market environment.
Important note:
Binance reserves the right to decide whether a project is suitable for listing on the Binance platform.
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