Former Binance CEO Changpeng Zhao (CZ) highlighted problems with Binance's short notice token listings, suggesting it may lead to market manipulations at the expense of retail traders.
CZ's Call for Listing Process Changes
Changpeng Zhao, Binance's former CEO, expressed his views on the need to reevaluate how Binance announces new token listings. He pointed out that the four-hour notice allows decentralized exchange (DEX) traders to pump token prices before they debut on centralized exchanges (CEXs), leading to manipulation and potential losses for late buyers. "The notice period is necessary, but in those four hours, token prices go high on DEXs, and then people sell on CEX," he wrote.
Impact of Short Notice Listings on Token Prices
Short notice listings give rise to price surges on DEXs before trading commences on CEXs. This results in:
* **Price Surge on DEXs** – Traders rush to buy tokens on DEXs, pushing prices up. * **Dumping on CEXs** – Once trading starts on Binance, early buyers sell tokens at inflated prices, disadvantaging latecomers.
Competition and Token Selection for Listings
Zhao also addressed the competitive landscape, stating that exchanges must race to offer popular assets as soon as possible. "You might not like to hear this, but the truth is: exchanges must compete to list popular coins (with trading volume) as early as possible," he explained. This emphasis on liquidity over project fundamentals can sometimes lead to fast-tracked listings.
Zhao's comments point towards a need for balance between market demands and trader protection. Exchanges are encouraged to emphasize fundamentally strong projects, while traders should remain cautious and conduct thorough research before investing.
