Binance Coin Skyrockets After New Launchpad Feature Launched, CZ Addresses “Whale Issue”
The world leading cryptocurrency exchange Binance has announced a new token sale format for its launchpad on Sunday. Whereafter, the Binance Coin (BNB) price has spiked, pumped 15.6 percent to $17.28.
Binance Launchpad has been the most popular token sale platform in 2019 without doubt. The low initial price token sale has created large demand, however, its previous “first-come-first-served” format disappointed many investors being unable to purchase any tokens at these sales.
In order to let more users participate in these token sales, Binance launches a new ‘lottery ticket’ system in which participants will be able to claim up to a maximum of 5 lottery tickets based on their BNB holdings over the 20 days, with 1 ticket per 100 BNB.
This ticket allocation mechanism appears heavily skewed in favor of BNB holders. For this reason, the new format has been criticized as unfair, with the clauses pandering to BNB whales to a large extent.
As many users are complaining, Binance CEO Changpeng Zhao (CZ) addressed the whale issue on Twitter. CZ emphasized that “investors should only participate in LaunchPad sales with spare funds, and should have an adequate level at that.”
The CEO also stated that reducing buy-in was possible, but would reduce the chance of ‘winning’.
In addition, the community is also concerned about the potential of whales creating multiple accounts to get more lottery tickets.
To this issue, CZ emphasized the strong know your customer (KYC) and anti-fake KYC checks and measures are in place already which may allay this kind of problems.
Feedback 1, whale issue, can't afford to hold 100 BNB.
Reducing it is possible, but would mean lower % chance of winning, and more dissatisfaction after the sale.
You should only participate in LaunchPad sales with spare funds, and should have an adequate level at that.
— CZ Binance (@cz_binance) March 24, 2019
As they say, there is no pleasing everyone. But obviously, BNB holders make up the vast demographic of Launchpad participants. The crypto market also gives a positive response to BNB. The token price surged dramatically since the format change announced.
The token grew 15.6 percent and surpassed Stellar (XLM) as the 7th largest cryptocurrency by market capitalization.