Binance Encourages Small and Medium Crypto Projects to Tackle Low Float and High FDV
To foster a healthier and more sustainable crypto ecosystem, Binance, the world’s largest cryptocurrency exchange, urged small and medium-sized crypto projects to address the prevalent trend of low float and high fully diluted valuations (FDV) on Monday.
The exchange invites these projects to apply for its listing programs, emphasizing the importance of solid fundamentals and sustainable models.
Binance highlighted its commitment to supporting projects that demonstrate robust fundamentals, maintain an organic community base, and operate with a sustainable business model.
“We hope to enhance the development of the blockchain ecosystem through our support of small and medium-sized projects with strong fundamentals, an organic community base, a sustainable business model, and a dedicated team acting as responsible industry participants.”
The call to action responds to a growing trend in which new projects launch with high market capitalizations but retain a large portion of their token supply locked, leading to low float.
On May 17, Binance Research reported that launching with low-circulating supplies has become increasingly common. Limited liquidity at launch causes rapid price appreciation under bullish market conditions. Such price growth is often unsustainable when many tokens are unlocked and flood the market, however.
The trend of token unlocking is set to continue, with approximately $3 billion worth of vested crypto tokens scheduled for release in May 2024 alone. Projects like Sui and Pyth Network are expected to unlock over $1 billion in tokens allocated to various holders, including early investors.
Binance estimates that around $155 billion in tokens will be unlocked between 2024 and 2030.
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