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Binance Introduces IEO “Lottery”
Over recent months, Binance has reintroduced its Launchpad offering, a platform that allows users to directly participate in token sales via the respected crypto exchange.
Although intial sales of the revamped platform have seemingly gone well, with the sales of Tron’s BitTorrent Token (BTT), Fetch.Ai Token (FET), and Celer Network Token (CELR) racking up millions of dollars within minutes, there have been a few issues.
During the BTT and FET sales, many traders were locked out of the portal, as the Launchpad site was overloaded by buy orders from all across the globe. As Changpeng Zhao, the chief executive of Binance, put it following the CELR sale:
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 relogin, a refresh would solve the issue. Others still experienced network delay.
Thus, Binance has looked to try to amend these issues. Launchpad will harness a lottery system, rather than a “first-come-first-served system.” Tickets will be determined by users’ BNB balance 20 days prior to the lottery event. The more BNB one has on the exchange, the more lottery tickets they can receive.
This should hopefully help promote more fairness in this ecosystem, as there have purportedly been entirely companies set up that aim to take all the coins in a Launchpad sale.
Competitors Announce Similar Crypto Ventures
This all comes as some of Binance’s leading competitors have announced similar ventures to Launchpad, as they look to take some of the IEO pie.
Huobi Global recently revealed what it calls Huobi Prime, which the firm’s chief operating officer claims will keep the company “at the forefront of the ever-changing digital asset marketplace.” Prime will purportedly be a “Direct Premium Offering (DPO),” giving users access to buy digital assets that will be directly deposited to their Huobi accounts.
Much like Launchpad, Prime will allow users that are KYC-verified to participate in coin offerings. The first project to launch on Prime will be a token called TOP, the native asset of the TOP Network’s ecosystem.
Bittrex International, a Malta-registered facet of the Seattle-headquartered crypto exchange, has also forayed into the subindustry. The company planned to sell the RAID token. But at the 11th hour, it interestingly pulled out, citing “last-minute changes.” But the fact of the matter is that Bittrex is looking to get its foot in the door of on-exchange sales too.
Interestingly, rumor has it that governments aren’t too pleased with the ‘IEO’ model. Primitive Ventures’ Dovey Wan posted a warning from the Beijing Internet Finance Industry Association (what a mouthful) on Twitter recently. Per her, it explains that any “initial offering,” whether it be the traditional model, exchange model, or any sale of a similar capacity, can be “a ponzi-esque musical chair game.” Anecdotal comments from other commentators have also speculated that governments, like the U.S., will also likely crack down on such a method of distributing crypto assets.
Title Image Courtesy of Marco Verch Via Flickr
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