Binance Turns Its Controversial Token Sale Service Into a Lottery

Binance Turns Its Controversial Token Sale Service Into a Lottery

 
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The largest global cryptocurrency exchange Binance announced major changes of its Launchpad token sale service in the blog post published on March 24.

It is said the next token launch on the platform will become a lottery “instead of a first-come-first-served system”. The Binance administration claims that the lottery will be conducted “via a transparent, randomized system with a random selection of lottery tickets based on tail digits.”

The number of tickets available to the user will depend on the number of BNB coins in his possession, with 1 ticket counting for every 100 BNB and a maximum of 5 tickets per account. Users will be able to claim tickets based on their BNB holdings over the 20 days leading up to the lottery draw date.

Binance pledges to set the maximum number of potential lottery ticket winners for each project and the allocation amount corresponding to each winning ticket in advance:

“For example, 10,000 potential winning tickets, each representing 500 USD worth of tokens. This will change for each project on Launchpad”.

The introduction of a lottery system is likely a response to the accusations from the community. The Launchpad platform has drawn much attention since the launch, with participating projects successfully reaching a funding cap. Recently, the Celer Network startup has raised around $4 million during a token sale on the Launchpad.

In February, the Fetch.AI project raised $6 million within just 22 seconds, but the conclusion was overshadowed by the critics from retail investors who faced the malfunction while trying to purchase tokens due to the excessive number of requests.

The new lottery procedure is still risky, the Binance team admits, as it may cause fluctuations in BNB trading before and after the snapshot time. Nevertheless, the exchange is expecting that such a short-term trend to be reversed by a countertrade.

Also read: Binance on DEX Release: No Need to Register