Binance’s Launchpad Platform May Be Hurting BNB’s PriceBy Zhehao Chen
In late 2017, Binance launched its Launchpad platform and the platform’s first two projects: Gifto and Bread Wallet. By all accounts, these launches were successful, but they weren’t followed by much: Launchpad launched no new projects in 2018. This launch freeze may have been influenced by stricter ICO regulations or the general market downturn, but whatever the reason, Launchpad was sitting idle.
2019 has been very different so far. Launchpad has launched new projects for two consecutive months, and thus far, they’ve been hits. At the same time, Binance has also announced its plan to sell at least one new token per month on Launchpad.
For investors, this flurry of Binance activity raises a question: what impact will the powerful comeback of Launchpad have on Binance’s own BNB token? First, let’s review some information about the launches.
The BTT launch: At 3:00 PM (UTC) on January 28, 2019, BitTorrent (BTT) launched its public sale on Launchpad, with BNB and TRX sessions successfully completed. 2,376,000 BTT were sold in the BNB session, and 3,564,000 BTT were sold in the TRX session. According to Binance, the BNB and TRX sessions were successfully closed in 13 minutes 25 seconds and 14 minutes 41 seconds, respectively. Subsequently, BTT was listed on Binance on January 31st with trading pairs of BTT/BNB, BTT/BTC, BTT/USDT launched. According to Binance data, BTT was, at one point, up 10x compared to its crowdfunding price.
The FET launch: At 2:00 PM (UTC) on February 25, 2019, Fetch.AI (FET) launched a public sale on Launchpad, with a BNB session only. A total of 69,204,152 FET were sold at a price of 0.008584 BNB/FET. Changpeng “CZ” Zhao, the founder of Binance, tweeted that a total of 24,000 users pre-signed the user agreement and 19,860 users successfully submitted purchase orders. 2,758 users successfully obtained shares within 22 seconds. FET trading pairs will probably be listed on Binance in the near future.
Obviously, Binance’s crowdfunding platform is attracting a large number of users, and crowdfunding with BNB caused many retail investors to buy BNB. But although many users attempted to participate in the crowdfunding, only a small number actually successfully purchased BTT and FET. FET's crowdfunding data, for example, shows that just 13% of orders successfully obtained shares.
After each token’s sale ended, the BNB price fell rapidly, with the highest drop reaching 10.22%. Launchpad, it seems, has a serious negative impact on BNB prices, at least in the short term. The low success rate among crowdfund users is likely to blame. Users who bought BNB for a token sale but failed to successfully acquire tokens likely often sell their BNB once the sale has ended.