The entire industry exchange is switching and rotating, I started using the exchange in 2013, the earliest was Huobi, and from 2013 to 2017 many Chinese users were very fond of Huobi, every era always has one or two exchange founders who are willing to inject passion into their products. After 2017, people around me started discussing Binance and BNB, about ICO/exchange going overseas, in the past two cycles, under the leadership of @cz_binance and @heyibinance, the Binance team went overseas, conquered cities and strongholds, and has now become the largest exchange in the universe, with over 300m users. Here we come to the topic, about @binance having launched 19 early Launchpool projects cumulatively this year, and the recent market questioning of the listing fee discussion.
1. Exchanges cannot guarantee returns
Let's look at some data, the average ROI return of Binance's Launchpool projects this year is 2.13 times, with an average valuation of $326 million, and a total of $929 million raised through Launchpool, which is very impressive data. Retail traders generally do not blame the Nasdaq/Hong Kong Stock Exchange/Shenzhen Stock Exchange for the poor quality of the projects they have reviewed, causing them to lose money, because everyone knows that the platform has no way to guarantee that trading users can make money, but because users are getting airdrops of new projects while holding BNB or FUSD, so many users have a very simple mindset, some users don't care whether these projects are good or not, but choose to sell out and convert to BNB when they go live, and in this model, in a bull market, through the appreciation of new projects and the wealth effect, the project parties, the exchange, and the retail holders of BNB will all be very happy.
2. Where does the questioning come from? User mentality and investment trends
As the largest exchange in the universe, Binance has indeed borne a burden that it cannot bear, because users will always have higher expectations of it. From the launch of Launchpad in 2018 to the past two cycles, Binance has never stopped exploring and listing new projects, and looking at the long-term cycle, Binance and Launchpad's projects have indeed been mutually successful, and many people may have forgotten the ICO projects of OK and Huobi in the last cycle, but many of Binance's Launchpad projects still remain. Binance has thus become the Nasdaq with the best liquidity, and most projects have their tokens fully distributed and digested through Binance, better able to withstand bull and bear cycles. In the past two cycles, there were also many community users who seriously researched and admired Binance's investment and research capabilities, and would even often choose to buy in when a project went live (such as Ethena this year), but as more and more projects have shown a downward trend from the first day of listing, there are fewer and fewer retail buyers, and there have even been cases of a project having only single-digit new buyers.
3. The Binance model and routine are taking shape
From the perspective of the participants, as the largest exchange, Binance helps its BNB users get free airdrops from the project parties, further enhancing the potential value of BNB and increasing the trading activity of exchange users, and in the interest-related conditions, BNB holders/users naturally think that Binance has an obligation to help them find the best investment assets, and the tolerance should be very low. But due to various audits, there have even been professional "To Binance" model projects with fake data and VCs on the market, which can be packaged end-to-end in terms of user growth/data activity/TVL, and as this becomes more and more common, people will doubt Binance's professionalism. There has even been a recent trend where some projects specifically look at which KOL accounts @heyibinance is following on Twitter, and then bribe/sponsor these KOLs to post information about the project in order to attract their attention, because of the information cocoon effect on the Twitter platform, when you see more of this content, more similar content will be pushed to you, and I even feel that He Yi may be trapped in some kind of information cocoon when scrolling through Twitter, and many innovative industry researchers and new products are thus buried in the information flow.
4. How can Binance break through?
4.1. Information transparency, and severe punishment measures for problematic projects
Binance's way to break through has been moving forward, including currently developing an unlock information module for Launchpool related projects, which has been well received. But because the biggest open secret is that He Yi has become the final decision maker, all related stakeholders and resources will actively send some kind of signal around He Yi, and most of the introductions and understandings have become a pre-planned script. When the Ton ecosystem was hot, the best game publishing platform went online; when AI was hot, the social app with the most fake users was pushed; when meme was hot, the most web2 Instagram meme platform was pushed; and then when problems with the founders and teams of these projects were discovered, they could not be immediately delisted, because this would harm the interests of exchange users, so they are trapped, but do not take the most severe punishment measures against these projects, and these projects will still harm more platform users in the future. We can review the views of Western projects on Binance's listing fees in the last cycle and this cycle, around 2021, a European team invested by IOSG directly refused Binance's listing fee requirement on the spot, of course they must be regretting it bitterly; this March, a US team we invested in, as a serial entrepreneur, the founder mentioned the token amount required to be paid to the Launchpad and the corresponding valuation and proportion required to be given to the Binance investment department, and he said firmly that no matter what, he would pay this fee, because at the time it was the best listing time for them, and Binance was the best distribution channel in the market, so it was a win-win deal for both the exchange and the project party.But after going through two cycles, it took Western founders 3 years to understand the true meaning of the listing fee, so what method can make such a deal more transparent?This kind of rule consensus, increasing the transparency of the conditions and fees for listing, forming a window guidance, opening up more communication channels and constantly revising, to avoid some arbitrage opportunities between the primary and secondary markets.
4.2. Separation of departmental interests, and increased measures to avoid conflicts of interest
I think Binance needs to separate the listing and investment departments, because when there are terms of business dealings, the listing evaluation criteria are easy to deviate, and the listing department should not become a tool to help Binance's investment department generate revenue, but should be more objective and fair, helping users better screen the best projects and protect user interests. Of course, what needs to be clarified is the recent claim: the projects invested by Binance Labs, when they come to the listing department, a "Great Wall of China" has been deliberately built, which to some extent shows Binance's impartial attitude in handling listings. But this should not only be the "Great Wall of China", the Western teams facing Binance's investment should also have the same standards and requirements.
4.3. Prudent due diligence, multi-party decision making, and saying no to fraud
Fromthe BD-Listing process will determine the regular internal process of Binance, increase the interaction between Binance Research and the Listing team, increase the weight of research and publish it regularly. Many of Binance's research reports are also very cutting-edge and professional. The Binance Research team should be able to provide more guidance and discussion on the listing direction, and can even regularly disclose what kind of direction and projects Binance is interested in at a certain stage, and collect market feedback and issues in advance. Referring to the investment process of IOSG, we will have sufficient internal discussion and argumentation, from Pipeline-Summary-Memo,Theoretical research and respect for facts are very important. Which users are real and which data is falsified, which revenue models can be sustained,I believe that anyone who has been in a traditional investment research institution for three to five years must have a rigorous due diligence process and standards, sounless it is related to interests, Binance should not tolerate and allow those projects with known problems to be listed on the Binance platform. Internally, these theoretical research teams should also have higher decision-making power, so that the overall evaluation process is more comprehensive and the decision-making mechanism is more diverse and decentralized.In the upcoming bull market, the competition between exchanges will return to a white-hot degree. I believe that many exchanges, in order to attract traffic and hype, will not focus on the fundamentals. In such competition, Binance will also face a dilemma.
Previously, a Weibo user introduced the listing forms of Binance, Coinbase, and Upbit. It is still recommended that more startup teams should consider these 3 exchanges in this cycle, as they are still the best choices in the current market. At the same time, with the election of Trump, the next 6-12 months will be the golden window period for project listing, and the competition will be extremely fierce.
