Binance pumps 15% after new Launchpad format; CZ addresses user concerns

24 Mar, 2019 | Updated: 24 Mar, 2019
by Will Heasman
News
Binance pumps 15% after new Launchpad format; CZ addresses user concerns

Following the announcement of a new Binance Launchpad format, the exchange has come under fire for facilitating BNB whales and excluding smaller investors. Now CZ has addressed these concerns opening a dialogue with many on crypto twitter.

Early today, as reported Binance announced a brand new format for their token launch platform, Launchpad; changing from its original first come first serve format to a lottery format based on randomly selected winning tickets with an allocated amount of tokens set to each ticket. Ticket allocation appears heavily skewed in favor of BNB holders, with the amount of BNB held correlating directly to the number of tickets available to users.

For this reason, the new format was highly criticized as unfair, with many accusing the exchange pandering to BNB whales.

The new format allowed holders of less than 100 BNB access to one ticket only, meaning to have a higher chance to hold a winning ticket (allowing access to the tokens on sale) users must hold more than 200 BNB for 2 tickets, and up to 500 BNB for a 5 (the maximum amount of tickets) this meant the buy-in for the maximum chance of “winning” would require holding up to approximately $8,600 in BNB (500 BNB at current prices).

Due to this fairly hefty barrier to entry, many took to crypto twitter to complain:

Perceived champion of crypto, and CEO of Binance, Changpeng Z ”CZ” Zhao addressed many user concerns, stating with the whale issue:

CZ stated that while reducing buy-in was possible, that would also require reducing the chance of 'winning'.

His ‘solution’ was to only participate with spare funds… you know that spare $1700 you have laying around? Yeah, just chuck that in.

However, from a purely business position, this limit makes sense. BNB holders make up the vast demographic of Launchpad participants, and the problem of the original first come first serve format was that token demand is usually extremely high, meaning that whales are an even bigger issue than the would be with the lottery proposition. However, this still means that smaller investors or non-holders of BNB are, for the most part, excluded.

Another issue presented by the community was the potential of whales creating multiple accounts.

Cz allayed fears by stressing the importance upon Know your customer checks and measures in place to avoid this happening:

Many suggested lowering the limit to a 50 BNB buy-in, which appears to be a sweet spot :

Regardless of some neigh-sayers, there was a fair amount of support for the new initiative:

Regardless of anyone’s personal feelings, at the end of the day Binance is a business, rewarding holders of BNB for … well, holding BNB, and so what? That CZ’s prerogative, providing both a reward to BNB holders and increasing BNB’s value proposition and utility.

And this new value proposition appears to be working, with Binance coin increasing up to 15% and marking a new BTC all-time high of 0.00429 BTC in the time since the format change announcement:

  

As they say, there’s no pleasing everyone, but this certainly hasn't affected holders of BNB adversely…

How do you feel about the new Launchpad format? Let us know your thoughts in the comments!

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