We want to create this thread to understand the community’s sentiment about being listed on a Centralized Exchange (CEX) and your feedback, mainly regarding advantages and disadvantages. In this way, the Pilot League would be able to decide whether or not to take action for this kind of initiative.
As you know, the Pilot League is working on growing the Idle ecosystem while also following community discussions that happen outside of the forum (e.g., Telegram, Discord), and this topic has been mentioned several times.
Main concerns about getting listed on CEXs generally are the risk of having unusual and speculative short-term token price increase or decrease and a short volume spike; regarding this we picked up some articles and researches carried out during the last two years:
- (September 8, 2019) - Market Reaction to Exchange Listings of Cryptocurrencies
- (April 28, 2020) - Binance Effect 2020
- (August 13, 2020) - DeFi Tokens Experience the ‘Binance Effect’
- (June 23, 2020) - Do Coinbase listings turn altcoins into gold?
- (April 1, 2021) - Analyzing the Crypto Exchange Pump Phenomenon
“Chart shows five-day cumulative performance distribution of digital tokens after their day of listing, across six big cryptocurrency exchanges, since May 2020. Tail ends identify extreme highs and lows, while shaded areas are upper/lower quartiles surrounding average and median returns. Extreme outliers are removed”.
Some final considerations extracted from these sources:
- When it comes to CEXs, there is a positive impact on asset value soon after the announcement is made;
- CEXs enable small investors to get access to the tokens without having to sustain high gas cost when the Ethereum network is clogged;
- Listings in large exchanges benefit the tokens with a broader reach of institutional and retail investors;
- CEXs listings have the potential to have a positive impact on asset value but don’t affect all tokens in the same way;
- Mandatory KYC is a drawback of CEXs.
Now it’s time to express your opinion on the following points:
- What are the pros and cons you see in general on being listed on a CEX?
- Do you think that, at the moment, having $IDLE listed on a CEX could help the growth of the Idle ecosystem?