In this post, I will try to address some of the questions that our community members have raised about our recent listings and the solution we are offering to balance our two main commitments of spreading the freedom of money and keeping users safe.
If you haven’t read the Binance Listing Tips, please read that first.
Large Selection of Coins
Binance started as a crypto exchange hosting a relatively large selection of coins. Offering access to crypto is one of our key features. We don’t list every coin under the sun. We have a selection process that is often viewed as overly strict, especially by project communities that haven’t been listed yet. Out of hundreds of thousands of tokens created on the blockchains, we have only listed about 300 coins/tokens currently.
Through our rigorous listing process, we have earned the trust of many in the crypto industry when it comes to our listings and we’re thankful for the support.
We fare well relative to the rest of the industry when it comes to IEO-related listings.
But as the new DeFi sector is hot now, we face a different problem. Do we list new DeFi tokens? Should we list them quickly, or do we wait for a couple of years until they are “proven”?
Listing new projects wasn’t a problem in 2017 when Binance was a new exchange. But now, Binance is bigger and has a wider user base. Different users have different opinions about how and what we should list. Some prefer that we list everything under the sun, while some only want us to list the most reputable coins. We believe that, as for most things in life, there is a balance somewhere between the two extremes.
Exchanges List Popular Coins
We need to list (provide access to) popular projects while trying to avoid scams or otherwise “bad” projects. While this sounds simple in principle, it is hard to achieve perfect - or even good - balance in real life (especially at speed), as everyone’s definition of “popular” and opinions about projects are different.
In order for exchanges to stay competitive, we need to list popular coins. This is a no brainer, right?
So, in keeping on-trend and delivering what our users (you) want, we (Binance) will continue listing DeFi coins, some of which may be from projects that have decentralized teams with no explicit founders. This leads us to my next point.
The “Founder Confusion”
One of the many things we ask in our listing guidelines is for the project’s founder to be the one submitting the listing application. This has created some confusion with some recent listings. But, understand that we have listed many coins where we were not in contact with the founders at all, or where the founders have not submitted a form, like BTC (unfortunately, Satoshi was unavailable), ETH, UNI, etc. There really is no conflict here.
If your project is “popular” and already has a large active user base, then exchanges will list it without anyone applying for listing. We don’t have a rule that says we will never list coins that don’t apply. If we didn’t list your coin already, and you want us to list it, then the thing you should do is to ask the founder to submit a listing application form. We typically only look at forms submitted by a founder, to filter out spam.
Nevertheless, we understand that with the dawn of DeFi, crypto moves faster than ever. And we are going to adapt with the times, with the creation of the Innovation Zone.
Our team has created the Innovation Zone, which will allow users to trade newer token offerings from the comfort of their Binance account, while at the same time protecting less suited users from being exposed to the “risk” that comes with trading them.
What led us to create the Innovation Zone is our dedication to giving Binance users a safe place to trade new, innovative projects. Right now, the typical way of accessing many of these tokens and projects is through DEXs (decentralized exchanges). However, trading on a DEX or directly from a self-managed wallet requires a high degree of capability and understanding. Forgot your password/seed phrases? Your funds are gone. Sent a wrong tx? Better luck next time.
By forming the Innovation Zone, we can provide our users with a safer space for accessing newer tokens that will likely have higher volatility than other tokens. This way, we are able to prevent more untoward scenarios for our users who just want to access certain projects.
To gain access to the Innovation Zone, you will first need to correctly answer the two questions below on the site:
1. What is the likelihood that you will incur losses or even a total loss to your principal capital by trading in this zone?
A) 50% or more
B) Less than 50%
If you answer 'less than 50%', you won’t be able to trade in the Innovation Zone. Good traders can lose more than 50% of their trades and still make profits. This typically comes in the form of many small losses and a handful of big wins. This question is to filter out people with mindsets that are incompatible with the Innovation Zone, like those who think trading is “low risk.”
2. If you incur losses, or even a total loss, whose fault and responsibility is it?
A) Your own, it was a choice that you alone made.
Obviously, if you blame the exchange (or anyone else for that matter), then you probably shouldn’t be trading at all and should reevaluate your approach in general. Remember, no one is forcing you to trade. And buying everything an exchange lists without doing your own research is not a good strategy. Projects may have multiple positive and negative developments at any time that affects their price. You must understand what you are buying.
We hope by asking the very explicit questions above, we will be able to filter out those who should not be trading Innovation Zone projects from the more advanced traders who have the right mindset, risk management, etc. This way, we satisfy both groups of users.
I will close with this. Once, not too long ago, Binance (BNB) was a “high-risk investment.” Since then it has returned more than 200x to early investors. Imagine if those investors were not given the same opportunity just because we think some tokens are “too risky.”
As always, DYOR (do your own research). Some of the projects may do incredibly well, but most will likely not. Take care.
- CZ, Binance CEO