CEX Listing: Success or Failure?
The number of new coins on exchanges is growing at a tremendous pace. In the first half of 2024, the number of listings on centralized exchanges (CEXs) exceeded the number of listings in all of 2023. On tier-1 exchanges with the highest volumes, new coin placements grew by 11.6%, or approximately 2,066 new tokens in the first six months. On Tier 3 and below exchanges with low volumes, new token listings increased by 32% to 488.
The increase in token listings on centralized exchanges is attributed to the recent surge in cryptocurrency prices. Bitcoin has risen more than 50% this year. Expectations of regulatory relief have also increased after the U.S. approved Bitcoin and Ethereum ETFs. And also amid speculation that if Donald Trump wins the election in November, he may take a more favorable stance on cryptocurrencies.
Listing on centralized exchanges after a Token Generation Event (TGE) is a bullish catalyst that increases trading volume and attracts new coin holders. However, listing on the CEX is expensive for projects: the price starts at $20,000 for small centralized exchanges and can exceed $500,000 for Tier-1 exchanges.
We analyzed the impact of token listing on the largest cryptocurrency exchange, Binance. Its effects on token prices in the short and medium term.
$TON (Toncoin)
After being backed by Pavel Durov and integrated into the largest social network, Telegram, which already has over 1 billion users, Toncoin became one of the most successful Level 1 (L1) tokens in Q1 and Q2 of 2024. The $TON coin has seen significant growth, and the Toncoin ecosystem has seen a substantial influx of locked-in assets (TVL). This is partly due to the launch of GameFi dApps such as Notcoin, DOGS, Hamster Kombat, and others. This success caught the attention of Binance, which led to the listing of TON on their exchange on August 8th.
After listing, trading volume increased by almost 200%, and the price of $TON increased by 15%.
The effect of the listing was very POSITIVE for $TON.
$BANANA (Banana Gun)
$BANANA is an ecosystem token of the Banana Gun project, one of the most popular trading and sniping bots. The token is among the top 300 by market capitalization. It was listed on the Binance exchange on July 20.
However, the listing of this token on Binance turned out to be a "sell on the news" event. Even though trading volume initially increased dramatically, the token has since experienced a significant downturn, and its price has fallen by more than 90% in just a few weeks.
The effect of the listing was NEGATIVE for $BANANA.
$NTRN (Neutron)
Neutron enables the development of cross-chain applications based on the Inter-Blockchain Communication Protocol (IBC) and gives decentralized DeFi applications full access to the economic security of the Cosmos Hub.
The project token was listed on Binance on October 10, 2023. Initially, this listing did not positively impact the price of $NTRN. However, better days for $NTRN came a few months later, during a bullish mini-market in the spring of 2024.
The effect of the listing was NEGATIVE for $NTRN.
$PENDLE (Pendle)
Pendle is a decentralized DeFi tokenized asset management protocol based on the Ethereum blockchain. The Pendle protocol allows trading DeFi tokenized assets and participating in liquidity provision. Pendle is also called a "tokenized yield protocol", and the platform is a special kind of decentralized exchange (DEX).
The token price quote on Binance was published on July 3, 2023. The price initially increased by 15% on the day of placement, but a significant increase occurred much later.
The effect of the listing was NEGATIVE for $PENDLE.
$RDNT (Radiant Capital)
Radiant is a secure DeFi protocol that obtains liquidity across multiple blockchains, allowing users to place and profit from their assets and efficiently borrow assets.
It was listed on the Binance exchange on March 30, 2023.
The listing effect was weakly NEGATIVE for $RDNT.
$SYN (Synapse)
Synapse is an Ethereum-based protocol that enables asset transfers between blockchains and is a standard bridge between blockchains in the Web3 world.
It experienced a significant drop in its token price after its listing on Binance on February 22, 2023. This "1-day pump and sell" event resulted in a decline that lasted almost a year.
The effect of the listing was very NEGATIVE for $SYN .
Conclusion
There are many more examples like the ones above, such as DOGE, EOS, and IMX. Also not included in this list are tokens that listed on Binance or other cryptocurrency exchanges on the day of a token generation event (TGE).
While listings typically result in a temporary spike in volume and serve as a form of brand marketing, they do not have a long-term impact on price. In addition, listings often turn into a "news sale" as existing holders dump their assets to new investors on centralized exchanges.