Binance co-founder publishes a long article responding to the recent coin listing standards

Sep 18, 2024

Author: He Yi

Original link: https://www.binance.com/zh-CN/square/post/13659356461810

This article is the author’s personal opinion and does not represent the views of WuBlockchain

Is the Crypto Space Coming to an End?

Recently, many pessimistic posts about the blockchain industry have gone viral. Many people outside the industry are asking me if the so-called “crypto scam” is over. Insiders are wondering if the industry still has a future. What stage of the cycle are we in? Bad news tends to grab headlines more easily than good news, and bad news also attracts more traffic and attention. What could be more mock-worthy than crypto enthusiasts criticizing the crypto space? These behaviors and sentiments spread, fueled by the ever-growing flow of traffic. Some even magnify the retirement of certain OGs as evidence that “the crypto space is dying.” Even some die-hard idealists in the industry have shown anxiety and confusion during my conversations with them.

But it’s not just the crypto space that’s anxious. We live in a world where we are inseparable from our environment, water, and air, just as the vibrancy of investment markets cannot be separated from the economic cycle. Whether the economy is booming or shrinking determines where people allocate their budgets. As regular individuals, we prioritize our basic needs — food and clothing — before considering investments. That’s why each message from the Federal Reserve is seen as a market signal by seasoned crypto players. Especially as the overall market cap of the crypto space continues to grow and large financial institutions enter the field, the blockchain industry is gradually maturing. With the approval of Bitcoin and Ethereum ETFs, the crypto market and stock market have become two sides of the same coin, as “allocatable assets” within the investment world.

In hindsight: What has changed in the crypto space over the past decade? I’ve previously likened the crypto space to the Wild West, where early entrants are like the gold miners of that era. During an economic boom, even a small overflow of funds into the crypto space could result in exponential growth. In the early, wild-growth phase of the blockchain industry, taking a high-risk, all-in bet could easily yield a hundredfold or even thousandfold return. This was due to the dual forces of a niche market and macroeconomic trends. In such an environment, if today’s all-in bet goes wrong, you could recover tomorrow with a successful one. But over time, as the economy enters another cycle and global consumption declines, more players have joined the gold rush, upgrading their shovels, while more professional players from traditional primary and secondary markets have entered. Everyone now feels that “the crypto space is not as lucrative as it used to be.”

Bitcoin has been repeatedly labeled as a “Ponzi scheme” by countless people and has faced fierce criticism in mainstream media. But it has persevered to the point where Bitcoin and Ethereum ETFs have been approved, which is undeniably a significant victory. Meanwhile, we see the trading volumes of crypto-related products in traditional finance steadily expanding, such as those on CME and through ETFs. Yes, the big players have arrived, but not in the way people might have expected, where capital mindlessly rushes in. Just as the internet changed the publishing and television industries, the transformation doesn’t happen overnight. It’s subtle, like rain quietly soaking into the soil, and it’s not just about Bitcoin’s price rising.

Has Binance Given Up?

We are like pigs riding the winds of change, hitting the pulse of the times and standing alongside our users, which is how Binance has reached where it is today. We hope the blockchain industry is not just a playground for niche players; we hope that Binance will serve a billion users in the future, and we aim to become the infrastructure for the future world. We’ve been working toward this goal all along. When we aim to drive mass adoption of blockchain, when we seek to meet the needs of the majority, and when we must protect the rights and safety of most users’ assets, it means we need to find a balance between ideals and reality. Binance is no longer a child, so we need to make peace with the world, comply with regulations, ensure anti-money laundering measures, and follow the established rules of the traditional financial industry. History repeats itself — during the early days of the internet, countless technological innovations emerged, but the turning point came when companies that served the masses became today’s internet giants. The extreme libertarianism of the early internet eventually gave way to the dark web.

We cannot predict the future, so we must learn from history. A product must serve the majority to have a chance at becoming the financial infrastructure of the future world. Binance’s products started with trading but have expanded beyond that, as seen in offerings like Earn, the marketplace, Pay, and the web3 wallet. We want to experiment and explore ways to bridge the gap, to truly popularize blockchain technology so that ordinary people can use it, not just speculate on it. They might not know what blockchain technology is, but they can benefit from it — just like your grandmother may not understand internet technology but can still enjoy the convenience of a smartphone. The bubble may burst, but products that truly solve users’ needs will change the world and create history.

Is Your Coin Listed on Binance?

Recently, there has been a heated discussion in the community about Binance’s listing process. We have carefully reviewed everyone’s opinions. Whether it’s the view that Binance listing VC-backed coins is a betrayal of the community, or that listing MEME coins lowers the listing standards, or the criticism that Binance listing TG game projects is reckless, all of this feedback comes from the more engaged studio players. Even rumors of insider trading are being investigated. We’ve been paying attention to these issues and reflecting on them constantly. “The deeper the love, the harsher the criticism.” People who don’t care won’t spend time on you. Binance has come this far because of our users, and we value every user’s opinion. Let me try to explain the general framework and process behind our controversial listing decisions:

Binance’s listing process involves four stages: business development, research team evaluation, committee review, and compliance audit.

To summarize the preferences of past committees:

1) Listing projects that users want: Projects with a user base and traffic. In the past two cycles, we missed out on many opportunities. Early on, we indeed didn’t take MEMEcoins seriously enough, so we were late to list projects like Shib, PEOPLE, PEPE, and even recent MEME projects, often after their prices had already skyrocketed. This experience has taught us that as a trading platform, Binance cannot decide what’s good — our users should decide that.

In the debate between “major” and “minor” MEME projects, we reflected deeply due to community criticism. If the essence of the MEME community is another “anti-Wall Street movement,” then are tokens that are highly concentrated, artificially pumped, and in a bubble still truly MEMEs, or just Ponzi schemes dressed up as MEMEs? Hence, we’ve chosen to list projects that are relatively more decentralized and have smaller market caps. We initially screened more than a dozen MEME projects, but many failed during the compliance review due to issues like token concentration.

2) Listing long-lasting projects: In the last two cycles, some traditional VCs aggressively entered the crypto space, making frequent and generous investments. As a result, any project with a hint of potential saw its valuation soar. Project teams, backed by these VCs, secured hundreds of millions or even billions of dollars in funding, giving them ample resources to experiment and pivot. The era of low-valuation infrastructure projects like Matic selling tokens is long gone. With large amounts of cash on hand, who would willingly sell their tokens at a valuation of tens of millions when they’re valued at billions? Their token prices aren’t decided by Binance but by tokenomics, liquidity, and market forces. These top teams, with their high valuations, have advisors and market makers to help maintain their value, and many exchanges are eager to list them. With the rise of DEXs through AMMs, they don’t necessarily need centralized exchanges either. But undeniably, while other projects rise and fall, these projects tend to last longer and have more opportunities.

Many people say this shows that Binance is losing its influence. Yes, we don’t have absolute control anymore. But that’s precisely the decentralized nature of the industry, a result of both professional financial players and the rise of DeFi, both of which are crucial to moving the industry to the next level. Without the involvement of capital, how would crypto become a hot topic in the U.S. elections? Decentralization means no absolute authority, and isn’t that the charm of this industry?

3) Listing projects with a solid business model: Over the past decade, we’ve often heard the claim that “crypto projects don’t need a business model; once they do, their valuations become calculable.” But I believe that whether in Web2 or Web3, the essence of entrepreneurship is creating something the world needs, and naturally, people will pay for it, whether the customers are businesses or individuals. The methods of financing may change, but the essence of entrepreneurship does not. Since the ICO craze of 2017 with Ethereum, I’ve been promoting the idea that issuing tokens is like issuing debt — backed by long-term credibility to secure initial funding. It’s easier than seeking VC funding and provides greater liquidity, but it also comes with greater responsibility. If someone sells off their tokens right after issuance and retires, their personal bankruptcy in terms of credibility is the real bankruptcy.

We appreciate projects with a solid business model and revenue streams. We want teams that are trustworthy, have entrepreneurial potential, and can take responsibility. We also hope these projects won’t be overvalued and can grow alongside the community. We want projects that empower their tokens because if you stand with your users, they will stand with you. If any project meets these standards, feel free to contact us, leave a comment on this post, or fill out information through the public application link.

Official Business TG contact: @BResearchBD

As for the listing process and the prevention of insider trading, Binance, as a system, has taken measures to isolate information at every stage. As has been mentioned externally, Binance’s listing team has gone through several rounds of scrutiny. Currently, those doing research at Binance don’t discuss business deals, and those negotiating business terms don’t know which projects have entered the observation pool. Each person only knows about the progress of their assigned project. Even after passing the IC vote, these projects must still go through strict compliance checks and can be canceled at any time.

Per exchange compliance requirements, all Binance employees must complete mandatory compliance training. Additionally, Binance has an independent audit team that investigates such violations. If proven that there’s any information leakage or suspicion of insider trading, Binance will immediately initiate legal proceedings against the individuals involved. In severe cases, they will face criminal liability.

While we can establish rules to constrain people, we cannot rule out the possibility of blind spots in the current system. Therefore, we have issued a large reward: We welcome reports of any corruption or misconduct related to the listing process, or any other blind spots in our system. If verified by the Binance team, we will reward you with a bounty of $10,000 to $5 million. The whistleblower email: audit@binance.com.

If We Disagree, Maybe You Are Right

Over the past few months, I’ve posted very little on social media. The more I read, the more I realize how little I know, and I’ve developed a growing sense of awe toward the world. We are all just grains of sand in the vast tides of time, carried to the crest of the wave by various coincidences. Everything I’ve achieved today is a product of the times — of the rapid economic growth brought by globalization, the flattened access to information thanks to the rise of the internet, and the opportunities that came with the birth of the blockchain industry. It’s not because I’m exceptionally gifted; I was merely fortunate to rise during the early days of an industry where “heroes were scarce, allowing ordinary people to rise to fame.” This means, “I might not be right.” By the logic I mentioned earlier regarding coin listings, if Bitcoin were born today, it might not even pass an IC review. A casual, incomplete, or inaccurate statement from me could lead to unnecessary misunderstanding or over-interpretation within the community, which has only made me more reluctant to express myself. Occasionally, I try to clarify certain misunderstandings, but often, the more I explain, the worse it gets.

Each person sees the world from their own unique perspective. We may just be intersecting from different parallel realities. If anything I’ve said resonates with you, encourages investors to DYOR (Do Your Own Research), or inspires entrepreneurs to settle down and keep moving forward, I would feel deeply honored. Everyone can only see their own future. What you believe shapes what you build. We will continue to explore the future, just as we did on our very first day in this industry. Thank you for being on this journey with us.

Wu Blockchain

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