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80% of tokens on Binance are inactive since listing: SwissBorg researcher
Venture capitalists and the centralized trading cartel have rigged the game in favor of cryptocurrencies, says SwissBorg’s “tradetheflow”.
Most projects backed by Tier 1 VCs have no real users, says SwissBorg’s tradetheflow.
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Posted May 20, 2024 at 2:03am EST.
The so-called “Binance effect” could be a thing of the past, thanks to tokens launching with a high fully diluted value (FDV) and industry insiders using the listing as an opportunity to cash out and make huge gains at the expense of Retail. investors.
According to analysis by SwissBorg DeFi and investment researcher “@tradetheflow”, more than 80% of new token listings on Binance in the past six months are down on their listing date.
Everyone’s talking about the VC+CEX cartel where teams are pressured to launch the highest FDV possible on Tier 1 CEX and provide exit liquidity to VCs and insiders
The result: new coins are no longer a great investment
But how real is all this? I wrote the number for you 👇
— flow (@tradetheflow_) May 17, 2024
The most notable drops have been seen in tokens like AEVO, which was backed by Coinbase Ventures, Pantera Capital, Paradigm, and Dragonfly, and is down 68% since its listing on Binance on March 13. Other tokens such as AXL and W, which also launched with major venture capital funding, have lost more than half their value despite listing in the past two months.
The only notable exceptions noted were memecoins like MEME and WIF, which likely recovered in the wake of the continued momentum of these tokens becoming a major market storytelling for cryptocurrencies this year, JUP and JTO, driven by momentum around Solana, and ORDI which was not backed by a major venture capital firm at launch.
“Most of Binance’s new listings are Tier-1 VC-backed tokens and are launching at insane valuations. The average FDV on Binance’s listing date is over $4.2 billion, with some even reaching a ridiculous FDV of over $11 billion [billion]”, said tradetheflow.
“And often these projects don’t have real users or a strong community behind them.”
In his opinion, in most cases, the tokens launched on Binance have already lost their upside potential and simply represent exit liquidity for insiders who exploit the lack of access to early investment opportunities by investors at the detail.
“In many ways the game is rigged and the current meta is not good for cryptocurrencies. Far from it,” tradetheflow said, adding that this path is “unsustainable” and discredits the cryptocurrency industry.