Binance: “97% of [altcoin] applicants are rejected”
Getting listed on a major exchange can send a cryptocurrency to the moon, but what criteria is used to choose one altcoin over another?
In the world of cryptocurrency, an exchange is a great bazaar. It is here that prospective traders can come to buy and sell assets to each other as their value shifts up and down in this volatile market. If you’re the creator of one of these assets, like a new altcoin, then you need to get your product into as many shopfronts in that bazaar as possible. Because the higher your visibility, the more the demand and the greater your altcoin’s value.
We’ve seen it happen before. When Bitcoin Cash arrived on major exchange Coinbase, its value jumped 218%! Binance is another huge exchange. At the time of this writing, it’s ranked second globally on CoinMarketCap’s 24 Hour Volume Rankings, which shows the amount of business its handled in that period. Getting your altcoin on Binance would be a huge win, but what metrics does the exchange consider before listing a new cryptocurrency?
It's certainly not uncommon for exchanges to publicly detail their methodology for listing altcoins. Ahead of the expected arrival of Ripple on Coinbase, the exchange – which is also connected the GDAX – detailed its policy for why altcoins are approved or rejected. Now we know how Binance approaches its listings.
Secrets of Exchanges – Why altcoins are rejected?
At the Blockchain Connect conference held in San Francisco this past week, Binance co-founder Ted Lin addressed this very topic. He revealed his company’s secrets in the panel Secrets of Exchanges: Who Are Buying Tokens and What Are They Buying? While a number of the panellists – all hierarchy from major exchanges – spoke about similar strategies within their company, it was Lin who went into the most detail. Finder was at the Panel, and we captured his answer on why some altcoins are rejected. Here is what he said:
“I travel the world and go to lots of conferences and I always get asked two questions; one is, what are you going to list next? And the other is, “how do we [choose who we] list? I think that has become the craze as people want to jump on the next big thing. Different teams from all over the world are trying to realise their project by being funded by crypto and appealing to the masses.”
“There are only a few different ways [an altcoin can get listed] outside of meeting the team and understanding what they do. It starts with Googling, to really understand if you have picked the right product. Exchanges are, naturally, one of the few ways you can look for reference on whether or not a coin is on the blacklist.”
“Binance actually has a proprietary methodology, where we combine the basics of the good old world - is the team good and does it have a good track record - [with questions like] have they made an actual product or is it in just in alpha mode or whitepaper mode, and do they actually use the Blockchain technology for real or did they just make whatever and slap Blockchain on the end of it hoping to raise money.”
“We like to see projects that are looking for traffic and not money. We don’t like people who shove a few lambos in their tab and claim that they need us. We like people who are modest. We like teams who have an existing user base. Apart from that there are a lot of propriety considerations we take into account that we’re not prepared to openly share because if we share those metrics, then they might be engineered. Just like when people look to see how many Facebook fans you have, and then that metric becomes a vanity index.”
“We actually pass less than 3% of all applicants in our reviews. So don’t be alarmed or worry if your project is not approved for listing on Binance as that is actually the norm. 97% of [altcoin] applicants are rejected, and that is good news for investors as well.“ - Ted Lin, co-founder of Binance
- Expert analysis: Bitcoin primed to hit AU $67k in the near term
- Ethereum’s London hard fork (EIP-1559) launches tomorrow – what you need to know.
- Ethereum’s price rallied ahead of EIP-1559, but is a correction on the way?
- PayPal CEO claims Bitcoin has been highly profitable, and plans to expand crypto operations
- Ethereum may hit AU $19k if it is able to maintain its current path, expert suggests