The cryptocurrency market has existed for more than 10 years now, and it is still expanding, developing and attracting new users. However, the Crypto World has not yet been able to win the full trust of the people. It might take several more decades for governments to accept cryptocurrency as one of the means of payment, with all its advantages and disadvantages.
When it comes to fiat, it’s easy and natural for us to use it, due to the fact that we can bind its value to gold, for instance. It is many times more difficult to correlate cryptocurrency with material values. Therefore, it is hard to trust something that exists not in your wallet, but somewhere out there, in the digital space.
Not only the idea behind a project affects its value but also the trust. Trust — that’s what determines the value and significance of a crypto asset. The wider the community of those who use a specific crypto, the more firmly it is established in the market. And the trust comes when the asset passes the listing procedure.
What is a listing on a crypto exchange?
Listing is a process during which a coin or a token is accepted by the exchange. Afterwards users will be able to trade this asset. If a cryptocurrency passes the listing process on large exchanges, such as Binance, then it immediately gets 100 points to its trust scale.
The listing of assets on the exchange affects, among other things, their value and trading volumes. Due to it cryptocurrency gets:
- investors who are ready to invest in a new proven crypto asset;
- the ability to freely participate in trading on the exchange;
- interest from other users of the exchange and the global market;
- increase in its liquidity: the token becomes easier to buy, exchange or sell.
Criteria for listing a new token on the exchange
- Popularity
If a new asset is known only to its creators, it is unlikely that it will be able to enter the global trading market. Even at the initial stages, it should form a client and investor base, so that later the demand could grow.
- Clear roadmap
The developing team must clearly understand what they want from their project, what goals and in what ways they want to achieve. If the goal was only to issue a new token, then its further development is a big question. This is unprofitable for exchanges, because they cannot deceive the trust of their customers by offering them, perhaps, a promising and ambitious, but unsecured product.
- Technical component
The exchange cannot ignore the technical side of the issue when it comes to crypto assets. Working with cryptocurrency is a complex technical process with a huge number of risks, which means that the creators of the token must have a strong team of developers and technical experts at their disposal to ensure the safety of assets.
- Legal component
Letting an exchange pass an asset that violates the law will undermine the credibility of the exchange itself. No one needs such problems, so lawyers are always trying to ensure that a new crypto asset does not raise any questions from regulatory agencies.
Changpeng Zhao, CEO of Binance, admitted in an interview with Forbes that he believes the number of users supporting the cryptocurrency is the main factor for listing. CZ took meme tokens as an example, which he himself does not like, but since they are supported by the community, Binance also lends its support. “We go by the community, my opinion doesn't matter,” Zhao said.
What is delisting?
The exchange has the right to list tokens and give them access to trading and investors, but it can also take away all privileges. This procedure is called delisting.
What can cause delisting:
- low popularity of the token;
- technical problems with the token;
- violation of the exchange policy;
- violation of laws (legal side);
- a major scandal that undermines the reputation of the token and can undermine the reputation of the exchange;
- the decision of the creators of the token.
Delisting is not the most pleasant event in the life of a token, but does this mean that now it won’t be tradable or profitable? Fortunately, no. If a crypto project resolves all its problems, it can take part in over-the-counter trading (OTC), as well as apply to another exchange and try to go through the listing procedure there.
Conclusion
The listing helps users navigate the crypto space. It provides them with additional protection against risks by setting security tokens and identifing the most promising projects for investments. Of course, the high volatility of the cryptocurrency market does not disappear anywhere, and trading here will not be smooth and completely safe, but the listing still facilitates this process.
In addition, the listing of new tokens is a great opportunity for traders to earn on short-term transactions. Therefore, enabling listing tracking on big exchanges will be helpful for a crypto entrepreneur.
If you want to learn more interesting facts about crypto then check out our blog! You might like our articles “Sam Altman’s Worldcoin Launched WLD Token” and “China Launched a Blockchain Satellite”.
