In the ruthless world of cryptocurrencies, Binance, the giant of digital exchanges, has decided to act as a redresser of wrongs. Faced with a market where speculation and inflated valuations threaten to derail everything, Binance intends to play the white knight. The objective: to clean up the crypto ecosystem and restore the image of an industry in search of maturity. Supporting sustainable and responsible projects then becomes a priority, in the hope of warding off the excesses that tarnish the future of digital currencies.
Binance rises to the front
In a move that could redefine the crypto ecosystem, Binance, author of a reform on trading conditions, recently launched a call for small and medium-sized projects to counter a worrying trend: the decrease in free float and increase in fully diluted valuations (FDV). On May 20, the famous crypto exchange invited these projects to join its listing programsa gesture intended to support initiatives with solid fundamentals and an organic community.
The objective is clear: improve the blockchain ecosystem by banking on sustainable business models and dedicated teamsfar from artificially inflated market capitalizations.
“ We hope to enhance the development of the blockchain ecosystem through our support of small and medium-sized projects with strong fundamentals, an organic community base, a sustainable business model and a dedicated team acting as responsible participants of the industry “, said Binance.
This position echoes a report from Binance Research dated May 17, which highlights a worrying phenomenon: more and more token projects are launched with low circulating stocksleading to spectacular but ephemeral price increases during a bull market. The cause ? A lack of initial liquidity, followed by a tidal wave of new crypto offerings as soon as they are unlocked, ultimately undermining the viability of these price increases.
In short, Binance seems to want to play the white knights in crypto armor, ready to defend small projects against the excesses of a market too often governed by unbridled speculation.
Behind the scenes of a crypto storm
On May 17, the mysterious crypto researcher by the sweet name of Flow threw a wrench in the digital pond. According to him, not less than 80% of the tokens listed on Binance saw their value plummet since their launch. And the observation is clear: these new tokens are often only “exit liquidity” for insiders. The latter benefit froma restricted initial offer to inflate prices before dumping everything, leaving small investors in the lurch.
The month of May 2024 brings little respite, with nearly $3 billion in crypto tokens set to be unlocked. Flagship projects like Sui (SUI) and Pyth Network (PYTH) alone are expected to release over $1 billion in tokens. The first investors, comfortable, are patiently biding their time.
And the future looks even more tumultuous. According to Binance's calculations, based on data from Token Unlocks and CoinMarketCap, these are not no less than $155 billion in tokens expected to be unlocked between 2024 and 2030. An avalanche of tokens that promises to put a strain on the market unless demand and capital flows suddenly start to surge.
In this context, Binance, which has just tightened its regulatory compliance on listing, is sounding the alarm. The massive release of tokens risks putting unprecedented selling pressure, and without an influx of new crypto investors, the market could well falter.
This is a scenario worthy of the best financial tragedies, where small savers risk paying the price for the shenanigans of the grand masters of the crypto game.
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