Binance, the world’s largest centralized exchange, has announced a community co-governance structure that allows Binance users to vote to list or delist tokens on the platform.
According to the announcement, Binance will select projects which the community can vote on. Tokens that receive the most votes will be listed on Binance following due diligence from the centralized exchange company.
Projects that fail to provide regular progress updates or necessary token information, engage in malfeasance, or have inactive developer teams and communities will be placed in the platform’s “monitoring zone.”
Once the projects are in the monitoring zone, Binance community members can vote to delist these projects from the platform.
The announcement follows an exponential increase in the amount of new cryptocurrency tokens and projects, which now number in the tens of millions.
Total number of unique crypto tokens over time. Source: Dune
Related: Binance to delist non-MiCA compliant stablecoins in Europe on March 31
Too many tokens cause major exchanges to reconsider listing procedures
CoinMarketCap featured less than 11 million cryptocurrencies on Feb 8. At the time of this writing, the number of unique digital assets listed on the website has swelled to 12.4 million.
Some market analysts believe that the rapid surge in new token listings competing for limited capital and investor attention has a dilutive effect on crypto prices and could even prevent altcoin season during this market cycle.
Coinbase CEO Brian Armstrong said that Coinbase must rethink its token listing process, in a January 24 X post. Armstrong wrote:
“We need to rethink our listing process at Coinbase given there are [roughly] 1 million tokens a week being created now, and growing — high-quality problem to have — but evaluating each one by one is no longer feasible.”
“Regulators need to understand that applying for approval for each one is totally infeasible at this point as well,” the CEO continued.
Armstrong ultimately concluded that the exchange needed to pivot to an “allow-list” and a “block-list” structure that partially relies on community reviews and onchain data to make determinations on which new projects to list on the US-based centralized exchange.
Magazine: Coinbase and Base: Is crypto just becoming traditional finance 2.0?
