On Sunday (March 24), Changpeng Zhao ("CZ"), the co-founder and CEO of cryptocurrency exchange Binance, explained the motivation behind Binance Launchpad's new lottery-style token sale format, and addressed some of the most common questions/concerns raised by the crypto community.
As we reported earlier, around 08:44 UTC on March 24, Binance sent out the following tweet to announce a new lottery format for the next project on Binance Launchpad.
Unfortunately, not everyone loved the change from the old "first-come-first-served system" to the new "lottery format", with the main complaint being that this new format discriminated against "poorer" investors since the "number of tickets you can claim depends on the amount of BNB you hold over a 20-day period in a Binance account leading up to the day of the lottery, up to a maximum of 5 tickets per eligible account" and your 20-day minimum BNB balance must be at least 100 BNB (worth approximately $1700 at current BNB prices) in order to be able to claim any lottery tickets.
Here were some of the comments by the critics of this new model:
So we have to hold a minimum of 100bnb to get just one ticket?! The lottery idea is great, although, this isn't fair @cz_binance .— Niels (@nvds888) March 24, 2019
One complain tho, minimum BNB holding balance is about worth $1500 and tbvh @cz_binance ,that's more than entrie portfolio of 75% of people in crypto.— Ravi (@hodlorr) March 24, 2019
I like the approach. A more equitable form would not give any holder more than one ticket, with a minimum BNB holding of 100 BNB to participate. All BNB holders are supporters, so no discriminatory tiering is warranted.— ☄️⚡️Thomas Connolly☄️⚡️ (@TomJConnolly) March 24, 2019
Nice now whales with multiple kyc bought accounts will get even more chances 🤦🏻♂️— ᴠᴀꜱᴛ (@CryptoVast) March 24, 2019
In order to address this criticism, the Binance CEO took to Twitter around 90 minutes after the Binance Twitter account made the announcement to explain that he was willing to listen to all of the feedback and consider making adjustments to the proposed new sale format for Binance Launchpad:
Will address some of the questions/concerns/feedback in this thread.— CZ Binance (@cz_binance) March 24, 2019
Our new Launchpad model is not set in stone. It’s the result of multiple detailed discussions over the weekend, while considering all angles. We will consider suggestions and will make certain tweaks. https://t.co/2wfeyZUyZH
CZ decided to focus his attention on the following two complaints/concerns:
- No way for people holding less than 100 BNB to participate, thereby limiting the platform to those with relatively large BNB balances (the "whales").
- Some "whales" could get around the "maximum of 5 lottery tickets" rule by using multiple Binance accounts.
Here were CZ's thoughts on these two issues:
Feedback 1, whale issue, can't afford to hold 100 BNB.— CZ Binance (@cz_binance) March 24, 2019
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.
The core issue is high demand, and BNB holders are still a very large base, even limiting to BNB holders doesn't solve the issue. Will think about the limits are little more.— CZ Binance (@cz_binance) March 24, 2019
Feedback 2, whales creating more accounts— CZ Binance (@cz_binance) March 24, 2019
There is strong KYC and anti-fake KYC measures in place already, which we think should be adequate to address the problem.
And finally, in response to those who had suggested that the 20-day minimum BNB balance should be 50 instead of 100, this is what CZ had to say:
that seems to be the magic number a few guys suggested. Maybe we (especially I) got it wrong on the first try. We will see.— CZ Binance (@cz_binance) March 24, 2019