Changpeng Zhao, co-founder and former CEO of Binance, has called for improvements to centralized exchange (CEX) token listings, describing the current process as “broken.” His remarks come amid market volatility following the unexpected surge and crash of the Test (TST) token, which Binance recently listed.
Short Listing Notice Periods
Zhao pointed out the problematic short window between token announcements and listings on major exchanges. In a February 9 X post, he observed that the rapid four-hour timeframe on Binance creates price distortions.
“The notice period is necessary, but in those 4 hours, token prices go high on DEXes, and then people sell on CEX,” Zhao wrote.
The surge in prices on decentralized exchanges (DEXs) typically results from advanced traders spotting emerging cryptocurrencies ahead of their CEX listings. These traders often sell the tokens after listing, exerting heavy selling pressure on centralized platforms.
The listing of the Test (TST) token exemplified these dynamics. Originally created for the BNB Chain tutorial, TST was not intended for public trading. Despite this, influencer-driven hype pushed its market cap to $489 million on February 9 before crashing by more than 50% to $192 million, according to CoinMarketCap.
Automated Listings and Fair Launch Era
Zhao suggested that centralized exchanges could adopt automated listing processes similar to DEXs. “CEX should list (almost) everything automatically, just like DEX,” he said, though he acknowledged that he no longer runs Binance or participates in its listing decisions.
Concerns over CEX listings have intensified as many tokens suffer losses shortly after debuting on major exchanges. By May 2024, more than 80% of tokens listed on Binance had lost value within six months.
The recent decentralized launch of Hyperliquid (HYPE) has been hailed as a potential game-changer, with its fair launch model staging a record-breaking airdrop worth over $7.5 billion. Analysts believe this model could pave the way for more transparent and equitable token listings, challenging traditional CEX practices.
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