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Binance Urges Small and Medium Projects Against Low Float, High FDV Trend

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Binance Urges Small and Medium Projects Against Low Float, High FDV Trend

Binance, a leading cryptocurrency exchange, is urging small to medium-sized projects in the crypto sector to address the issues associated with low float and high fully diluted valuations (FDV). On May 20, Binance extended an invitation to these projects to apply for its listing programs. The company’s goal is to bolster the crypto ecosystem by supporting sustainable projects that can withstand market pressures.

Binance emphasized the importance of strong fundamentals, an authentic community base, and a sustainable business model for these projects. They believe that with the right support, these projects can help drive forward the development of the blockchain ecosystem. Having a dedicated team committed to being responsible participants in the crypto industry is seen as crucial.

This initiative reacts to an ongoing trend where many projects launch with high market capitalizations, even though a substantial number of tokens remain locked. On May 17, Binance Research pointed out that it is increasingly common for token projects to start with low circulating supplies, allocating a significant portion of the supply for future release. This often leads to rapid price growth during bullish market conditions due to the limited liquidity available at launch.

This kind of price appreciation is often unsustainable. When a significant portion of the token supply eventually hits the market, it can lead to a sharp price decline due to an oversupply situation. This is a key issue Binance aims to address by supporting projects with more sustainable models.

According to Flow, a well-known pseudonymous crypto researcher, 80% of tokens listed on Binance over the past six months have decreased in value since their launch. Flow pointed out that most of these newly launched tokens are used as “exit liquidity” by insiders who benefit from the limited access of retail investors due to the low initial circulating supply.

The market is preparing for a substantial unlocking of crypto tokens. By May 2024, approximately $3 billion worth of vested crypto tokens are expected to be unlocked. Prominent projects like Sui and Pyth Network are among those slated to release over $1 billion in tokens to various stakeholders, including early investors.

Binance used data from Token Unlocks and CoinMarketCap to estimate that about $155 billion in tokens will be unlocked from 2024 to 2030. The exchange warned that this influx of tokens will likely exert significant sell pressure on the market, especially if it is not met with a corresponding increase in demand and capital inflows.

Binance’s call to support small to medium crypto projects aims to create a more balanced and sustainable market. By addressing the issues of low float and high FDV, the exchange hopes to mitigate the potential volatility tied to token unlocking events in the near future.

25 thoughts on “Binance Urges Small and Medium Projects Against Low Float, High FDV Trend

  1. More like Binance trying to dump responsibility onto smaller projects while they rake in more profits.

  2. This seems like another tactic for Binance to secure more control over the crypto market. Not a fan. 🙄📉

  3. Strong fundamentals and sustainability will drive the future of crypto. Thanks, Binance, for leading the way!

  4. Why does it feel like Binance’s plan could just create new problems instead of solving the current ones? Missteps galore!

  5. Binances efforts to mitigate volatility are commendable. Its great to see such proactive steps being taken!

  6. What a great initiative by Binance! Supporting sustainable projects is the way to go!

  7. Binance is all talk about sustainable models, but have they looked at their own track record lately? 📉

  8. Kudos to Binance for highlighting the importance of strong fundamentals. A solid move for the future!

  9. By addressing key issues, Binance is paving the way for a healthier market. Great leadership!

  10. This initiative helps ensure a balanced market, which is crucial for the health of the crypto industry. Well done, Binance!

  11. Binance trying to dictate terms to all these projects is a bit rich considering many tokens on their platform have plummeted in value.

  12. Does Binance really think they can fix things by just inviting projects to their listing programs? Highly skeptical.

  13. Binances commitment to responsible participation in the crypto industry is inspiring. Supporting small projects is the future!

  14. So they’re warning about future token unlocks, but what are they doing about the existing market chaos? Not impressed, Binance.

  15. Supporting “sustainable” projects? From the people who brought us multiple failing tokens? I’ll take that with a grain of salt.

  16. Excited to see Binance supporting projects that can withstand market pressures. This is how we build a stronger ecosystem!

  17. Binances efforts to create a balanced market will benefit everyone involved. Keep up the great work!

  18. Ensuring sustainable growth for crypto projects is a big win for everyone. Thanks, Binance!

  19. Again with the big promises, Binance? We’ve seen this before and it doesn’t end well for the small guys.

  20. Proactive measures like this are essential for the crypto sector’s growth. Hats off to Binance!

  21. By supporting sustainable projects, Binance is ensuring a brighter future for the crypto industry. So impressive!

  22. Building a sustainable business model is crucial, and Binance is leading by example here. Great job!

  23. Strong fundamentals and authentic communities make all the difference. Binance is setting the standard!

  24. Kudos to Binance for addressing the critical issues of low float and high FDV. This is much needed!

  25. Supporting small to medium projects helps in creating a more resilient and robust crypto market. Way to go, Binance!

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