Binance Updates Token Sale Format on Launchpad Platform, Binance Coin Shoots 10%

| Updated
by Bhushan Akolkar · 3 min read
Binance Updates Token Sale Format on Launchpad Platform, Binance Coin Shoots 10%
Photo: Binance

To ensure a fairer distribution of tokens during a token sale event, top cryptocurrency exchange Binance has introduced a new lottery launchpad system model replacing the existing first-come-first-serve system.

In a recent announcement today, March 24, Binance plans to tweak the token sale format on its Launchpad platform. As part of the Initial Exchange Offering (IEO), Binance launched its “Launchpad” platform that allows users to participate in token sales.

The Binance Launchpad platform has conducted three successful token sales until now. This includes the sales of Tron’s BitTorrent Token (BTT), Celer Network Token (CELR), and Fetch.Ai Token (FET).

As per the announcement, the new token sale format includes a lottery system instead of the existing first-come-first-served system. The number of lottery tickets issues will depend on the users’ BNB balance 20 days before the lottery event date. Higher the BNB balance a user holds, the more lottery tickets he/she can receive. The maximum lottery tickets eligible per account in 5.

Binance notes that the lottery draw will be a completely transparent system with a random selection of lottery tickets. However, users have to mandatorily follow the country restrictions and KYC procedure for account verification.

Creating a Fair Token Issuance Method

The reason behind moving to a new system is that Binance experienced a few issues with the previous token sales on Launchpad. During the FET and BTT sales, the Launchpad platform witnessed heavy traffic resulting in website overload. The result was several traders got locked out of the portal.

During the CELR token sale, Binance CEO Changpeng Zhao said:

“39003 people tried to buy, 3129 people got some. 35000 people will be somewhat unhappy… Some users experienced a caching issue that looked like they need to re-login, a refresh would solve the issue. Others still experienced network delay”.

The new lottery system will ensure more fairness in this ecosystem. Binance explains the entire modus operandi of the newly introduced lottery system model for token sales.

Risks And Trade-Offs

While introducing the new system, Binance remains transparent about the associated risks and trade-offs. For e.g. the exchange notes that

BNB price will fluctuate during the 20 day period. If BNB price drops, it is entirely possible the drop in BNB price will outweigh any gains made by the new token. That is first assuming you win in the lottery draw. Further, the new token being sold is not guaranteed to increase in price. It may drop in price.

It also mentions other risks and how holding BNB doesn’t ensure an allocation. Thus, it recommends investors to weigh-in all risks before participating in the token-sale and asks them to conduct thorough research about each project beforehand.

The new announcement has seen a positive response from BNB investors. At the press time, the price of Binance Coin (BNB) is 12.84% up which is trading at $17.12 with a market cap of $2.47 billion. Binance Coin is currently the seventh most-valued crypto token in the market.

Altcoin News, Binance News, Cryptocurrency news, News
Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

Related Articles