Happiness of the draw: new Binance Launchpad Lottery structure distributes criticism

11 min read

Despite the changed attitudes to altcoins and the initial currency disorders (ICO), Launchpad – the token platform developed by & # 39; the world's leading cryptocurrency exchange Binance – is selling out of its range within minutes. Now that the company completed a number of sold-out token launches, the company shared its views when it announced changes to the structure of its platform. Cointelegraph reviews the changes to the service, along with the latest Binance token with news and developments.

Binance Launchpad changes the layout

On March 24, prominent cryptocurrency exchange Binance published a message with fundamental changes to the structure of its Launchpad token sales platform.

The company previously had a system & # 39; first come, first served & # 39; used that resulted in long waiting lists and some investors who missed tokens. According to the press release, the company will now use a lottery style for its future token sales on Launchpad.

According to the press release, the new system will focus on a lottery initiative where service users can claim up to five tickets by holding a certain amount of Binance Coin (BNB) during the 20-day period prior to the lottery. . Users are allocated one ticket per 100 held BNB, until the maximum of five tickets is reached. The minimum amount of 100 BNB needed to participate in the lottery is currently setting the investment threshold at $ 1,700. According to the company, users can choose how many tickets they want to enter into the lottery 24 hours before the winners are selected. The maximum number is chosen based on their BNB holdings during the 20-day period prior to the lottery.

It appears that the change in format is due to a large number of factors, ranging from customer demand to efforts to make the process fairer. Although the company did not specify which specific requirements customers had requested, or whether or not they experienced a change in clientele, a Binance Launchpad spokesperson spoke with Cointelegraph about the reasoning behind the changes:

"In a rapidly changing world we listen, learn and adapt. We have created a new lottery format for Binance Launchpad because we give priority to honesty, transparency and a better user experience."

Despite the increased skepticism of investors regarding the usefulness of ICO's in general, Binance claims to experience an increase in token sales participants, citing figures released by founder and CEO Changpeng Zhao (also known as CZ):

"If you look at the number of participants that CZ has announced on its Twitter, the demand for Launchpad grows with every session. For example, 39,003 people participated in the recent Launchpad token sale, while only 19,860 people participated in the token sale earlier."

Although the figures seem to indicate that Binance's appeal to ICO's has not been settled, the changes in the Launchpad format have received sharp criticism from members of the crypto community, many claiming that the changes would be small investors Prices. Investors and crypto enthusiasts excluded their concerns on Twitter about the implications that the new format could have:

When it became clear that the new format had mixed feelings at best, CZ busy with a number of Twitter users to try and find out what might be more pleasant for the widest range of potential investors:

In the common thread, CZ addressed the most frequently mentioned problems and suggestions, citing that the "Launchpad model is not set in stone". It is the result of several detailed discussions during the weekend, in which all angles have been viewed. We will consider suggestions and make certain adjustments. "

The main care can be divided into two categories. The first problem critics quickly pointed out was that the proposed system seemed to be favor "whales" – i.e., individuals or entities that own a large number of cryptocurrency – and threatened to praise smaller investors who are unable to hold 100 BNB. CZ pointed out that although it would be possible to lower the threshold, this would reduce the chances of winning and could result in dissatisfaction with the service. Many critics suggested a "magic number" of 50 BNB. Although CZ admitted that the threshold might have been a mistake, he stressed that the core demand for Launchpad remained very high and that limiting the minimum quantity is not a quick solution to the problem.

The second problem concerns whales that create different accounts to get extra tickets, thereby maximizing their chances of being selected. In addition to information in the press release stating that all due diligence and Know Your Customer (KYC) measures still apply as usual, CZ stated that all measures to prevent this were both strong and already in place:

The CEO also pointed out that people should only participate in the sale of Launchpad tokens if they are in a financially stable position and can handle the losses that they could possibly suffer. Similarly, in the press release announcing the changes published on March 24, the company stated that entering the lottery does not guarantee winning and that fluctuations in BNB's prize were likely:

"The BNB price fluctuates during the 20-day period. If the BNB price falls, it is quite possible that the fall in the BNB price outweighs the possible profit of the new token. That goes in the first place "If you win in the draw of the lottery. Furthermore, the new token sold will not be guaranteed to rise in price. It may fall in price. There are significant risks. You are responsible for your own decisions."

When Cointelegraph questioned a spokesperson for Binance Launchpad about whether the platform was undergoing a shift to larger investors, the company declined to comment, but gave a brief response to criticism of the new format:

"As CZ recently tweeted about Launchpad, we are carefully considering suggestions and making certain adjustments based on the feedback we receive."

Recent coin introductions

Binance Launchpad has completed a number of high-profile token sales in recent months. The demand is clearly high for coin introductions, many of the token sales are completed in a few minutes. Most recently, the company completed a sale of Celer Network (CELR) tokens for $ 4 million. Celer Network is a layer-2 scale platform that works to enable non-encrypted transactions for payment transactions and off-chain smart contracts.

All 597,014,925 CELR tokens were sold in a single session that lasted 17 minutes and 35 seconds. As with earlier token sales, Binance only accepts payments via BNB. At the time of printing, every CELR token is worth it 0.001051 BNB, equal to $ 0.020181.

On February 25, Binance Launchpad completed the sale of Fetch.AI (FET) tokens, reaching a total of $ 6 million, with more than 69 million tokens sold. According to a chatter issued by CZ, the sale was completed in just 22 seconds.

Fetch.AI is a project that aims to create an "economic internet" by combining machine learning, multi-agent systems, intelligent smart contracts, distributed ledger technology and artificial intelligence. FET & # 39; s initial currency condition would close once the $ 6 million hard cap is reached or on March 3. According to a chatter issued by CZ, the sale was oversubscribed, which led to a bottleneck on the stock exchange:

"24,000 people signed the user agreement, 19860 people successfully submitted a purchase order, 2758 people received a copy. The first 22 seconds."

According to a Binance blog post published on February 25, the tokens were actually sold to participants in less than 11 minutes and 14 seconds. The extension in the originally reported time is reportedly the result of taking into account the processing time for submitted purchase orders.

At the time of launch, 1 FET token was sold at 0.00858400 BNB, equivalent to $ 0.0818, at an exchange rate of $ 9.53 of the BNB-USD from February 26. Purchases from participant tokens amounted to $ 3000, with a minimum investment threshold of $ 20.

Binance also closed the sale of the Tron-based BitTorrent token (BTT) on January 28 and brought in a total of $ 7.1 million dollars and a total sale of 50 billion tokens in less than 15 minutes. BitTorrent is a peer-to-peer file sharing platform that allows service users to share files such as music or videos via the Internet.

Unlike the sale of the FET and CELR tokens, the BTT launch consisted of two simultaneous sessions, one for buyers using BNB and another for buyers using Tron (TRX). According to information published on the Binance website, each token was priced at $ 0.00012 during the press time.

CEO and founder of Tron, Justin Sun confirmed the successful sale of the tokens in a tweet after the launch was completed:

"It's official: in the BNB session, all 23.76 billion BTT were sold to token sales participants within 13 minutes and 25 seconds. Meanwhile, during the Tron session, all 35.64 billion BTT were sold within 14 minutes and 41 seconds."

Despite the success of the sale and the seemingly short duration, CZ tweeted that the launch could have been much quicker if it weren't for a number of unexpected technical issues related to the huge demand for the product:

"Both sessions completed. Lasting about 18 minutes, due to a problem with the system, would otherwise take 18 seconds. The question was astronomical."

Huobi launches rival platform

With various lucrative ICO's under his belt, the success of Binance Launchpad has not gone unnoticed. Singapore-based cryptocurrency exchange Huobi Global announced on 20 March the launch of its own pre-release token sales platform in a blog post.

The platform, officially named Huobi Prime, gives investors the opportunity to access new altcoins before they publicly appear on the most prominent stock exchanges. The services are made possible by Huobi Token. According to Leon Li, founder and CEO of Huobi Group, the new service comes from customer demand and is "designed from the ground up to be a more innovative, direct and responsive way to access new and new tokens. "

According to information published in the Medium item, all coins purchased through Huobi Prime are immediately deposited into user accounts. The company also states that a "rigorous screening and selection process" has been introduced, stating the importance of a progressive business model, financial support, community support, reputation, technical innovation and expertise in ambitious projects.

For deals on Huobi Prime, three rounds of 30 minutes are played with coins, with prizes being limited but increasing over time. Although the group states that Huobi Prime is open to all types of investors, the blog post states that individual purchases cannot exceed $ 1,000 USD in Huobi Tokens.

To participate in future token sales, users need a verified account and an average monthly number of at least 500 Huobi tokens. The company said the limit was introduced to try to find a balance between larger and smaller investors, in addition to ensuring legitimate usership. However, the company notes that the restriction will be suspended for the first launch of the money.

Regarding the new competition from companies trying to launch their own coin-offering platforms, Binance Launchpad remained optimistic and claimed to be sure that its products and user experience would guarantee high standards:

"Many IEO's are popping up at other fairs, so we anticipate new formats and systems. Binance Launchpad will always meet the highest standards for token launches; we select projects of the highest quality and try to offer the best user experience "

The first coin to be introduced on Huobi Prime is TOP, the original token of the public blockchain project from TOP Network.

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Don Bradman

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