Emre Yumlu 
CZ says the Binance token listing process is flawed and proposes an automation reform for the listing process.
Changpeng Zhao, co-founder and former CEO of Binance, pointed out the flaws in the token listing processes on centralized exchanges (CEXs), emphasizing the need for a fairer and more organized system.
Tokens listed on major exchanges like Binance, Coinbase, and Kraken attract significant interest from investors. These exchanges can drive token prices up with the liquidity they provide. However, according to Zhao, the current listing process contains serious issues.
Zhao noted that one of the biggest problems is the short time between the announcement and the listing. According to him, after the announcement, token prices rise rapidly on decentralized exchanges (DEXs), and investors take advantage of this opportunity to sell on centralized exchanges.
“I think Binance’s listing process is somewhat flawed. An announcement is made, and the listing happens within 4 hours. Notification time is necessary, but during this process, prices rise quickly on DEXs, and investors sell on CEXs,” Zhao said, arguing that a more transparent and balanced listing system is needed.
CZ Highlights DEX Listing Strategies
Decentralized exchanges (DEXs) offer experienced investors an opportunity to discover new crypto projects early. Many investors buy these tokens before listing announcements on centralized exchanges (CEXs) to take advantage of the price increases that follow listing. However, this strategy creates significant selling pressure when tokens begin trading on CEXs.
Changpeng Zhao, co-founder of Binance, pointed out this imbalance, arguing that a healthier listing mechanism is needed. His remarks came shortly after Binance listed the Test (TST) token. Initially developed for educational purposes within the BNB Chain ecosystem, TST was quickly embraced by investors as a meme token.
The TST token briefly surged to a market cap of $489 million on February 9, according to CoinMarketCap data, before falling over 50% to $192 million.
The name of the TST token briefly appeared for just one second in a BNB Chain tutorial video for the Four.Meme platform, solely for test purposes.
Although Zhao clarified that the video was not meant to “endorse” the token, influencer communities based in China started promoting it, which drove its market cap higher.
Zhao: CEXs Should List “Automatically,” Just Like DEXs
Following the surprising rise of the TST coin, Zhao acknowledged that CEX listing procedures need to be improved.
Zhao stated that implementing automatic token listing procedures, similar to DEXs, could be part of the solution, adding: “I think CEX should list (almost) everything automatically, just like DEX. But I am not running a CEX anymore.”
Zhao clarified that his remarks came from an “outsider’s perspective,” as he is no longer involved in the listing process on Binance or other CEXs.
Fair Launch Tokens May Replace CEX Listings
Concerns about CEX listing practices have grown in recent years. As of May 2024, more than 80% of tokens listed on Binance lost value in the first six months after their debut.
However, the decentralized launch of the Hyperliquid (HYPE) token, which performed the most valuable airdrop in crypto history worth $7.5 billion, could mark the beginning of a “new era” for onchain fair launch cryptocurrencies.
Vitali Dervoed, co-founder and CEO of Composability Labs, stated, “The HYPE token launch marks the beginning of the new era between centralized exchange listings and onchain […] Because HYPE was launched by the protocol on its order book on its own layer 1.”
Dervoed added that the token “was not deployed on any centralized venue” but was launched and fairly priced by the crypto community.
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