Changpeng Zhao, the former CEO of Binance, has publicly stated that Binance’s method of listing new tokens is in need of an overhaul. Centralized exchanges, or CEXs such as Binance, play a pivotal role in exposing promising cryptocurrencies to investors, potentially skyrocketing their value. However, Zhao explained that the current process, where an announcement precedes the listing by only four hours, leads to price manipulation on decentralized exchanges (DEXs) which can then negatively impact the token’s performance once listed on a CEX.
The issue came to a head with the recent listing of the Test (TST) token on Binance. Despite being introduced merely as part of a tutorial video for the Four.Meme platform on BNB Chain, investors snapped it up as a meme token. Miscommunication around the token drove its market cap up to a temporary peak of $489 million before dropping by over 50% to $192 million within days.
Zhao is advocating for an improved listing process, suggesting that an automatic system, akin to how tokens are listed on decentralized exchanges, could be the fix. “I think CEX should list (almost) everything automatically, just like DEX,” he said. However, as he no longer leads a CEX, his comments were that of an observer rather than a decision-maker.
Recent concerns around CEX listing practices have been gathering steam, with a report showing that over 80% of tokens listed on Binance saw a decrease in value in the first six months post-listing. However, the advent of Hyperliquid (HYPE), a token launched by the protocol on its order book rather than a centralized venue, marks a new decentralized trend in token listings – a fair launch system where tokens are launched and priced by the crypto community. This may signal the beginning of a significant shift within the domain of cryptocurrency listings away from centralized entities.