Binance has released a fresh set of regulations for the inclusion and support of new projects. Following a surge in the creation and listing of meme assets, Binance is reevaluating its guidelines. The platform is now focusing on supporting projects that have clear utility and a long-term plan beyond just launching a meme token.
During the recent bullish market, there has been a significant increase in new listings as everyone tries to get in on the hottest projects. While some of these listings have been successful in attracting liquidity, both Binance and Kraken are being cautious about which crypto projects they admit. They aim to standardize and expedite their listing process.
In the past, Binance has delisted multiple assets, but it has now decided to be more open in onboarding tokens. However, the ultimate decision to list a new project still lies with Binance, and all projects must comply with the new listing form.
One of the key requirements for new listings on Binance is that tokens must have a wide distribution and minimal allocations outside the community. Several new projects have already started applying under these guidelines.
Startups often sell tokens to the community while also providing incentives for developers and venture capital (VC) investors. However, this can lead to market dumping, even if there is a vesting schedule in place over several years.
The listing pages on Binance will now provide a comprehensive history of the project, including tokenomics. This will enable potential buyers to access all the necessary information in one place to make informed decisions. One challenge for Binance is when projects launch with a small float and a high valuation, which obscures their potential Fully Diluted Valuation (FDV).
These types of projects often become victims of hype and fail to sustain their initial price when too many people jump in. Another reason for small community allocations is the renewed interest in crypto startups from venture capital buyers. This results in projects having a small user base but significant holdings in the wallets of funds and VCs.
It is worth noting that only 24.7% of top blue-chip tokens are fully diluted, indicating that large-cap coins and tokens are more secure, with 54% being fully diluted.
Among the newer launches and high-profile tokens, a few have caught attention for having a small float. Worldcoin (WLD) has the smallest correlation between market capitalization and fully diluted value, followed by Cheelee (CHEEL), Starknet (STRK), and Saga (SAGA). These four cryptocurrencies also have the lowest float and have plans to release new coins over the coming years.
The meme coin craze has diverted some funds away from these low-float assets. The crypto community has expressed skepticism towards some of these projects, dubbing them “VC Coins”. Despite the volatile nature of meme assets, their strength lies in building a community and achieving wider distribution.
One of the reasons for the presence of low-float, high-valuation listings is the resurgence of VC funding for crypto projects. This leads to startups that may appear promising on paper, with strong teams and significant financing, but have reserved a large portion of their tokens for early backers, funds, and other “whales”.
Projects that secured funding during the peak market times in March 2024 are now striving to secure listings and liquidity. Investment activity is on the rise and is spread across various asset classes, including NFT projects.
Some investments are coming from crypto insiders who are looking to diversify their portfolios and generate new value. VC funding has flowed into all major trending token classes, with DeFi and AI leading the way, as well as data services. Funds are also returning to the gaming sector, aiming to revitalize play-to-earn models with a more sustainable approach.
Reporting by Hristina Vasileva for Cryptopolitan.
