Key Points
- Binance accused of demanding massive token fees from projects
- Coinbase’s “free listing” claim challenged by top developers
- Industry leaders reveal exorbitant fees, sparking transparency debate
- Centralized exchanges still dominate trading despite criticism
The crypto community is in an uproar following recent revelations about CEX listing fees from two of the biggest players in the space: Binance and Coinbase. Simon Dedic, CEO of Moonrock Capital, set off a firestorm when he disclosed the shocking demands Binance allegedly makes for token listings.
According to Dedic, a “Tier 1” project, despite raising close to nine figures, faced a jaw-dropping demand from Binance: 15% of its total token supply, equating to a colossal $50-$100 million.
Dedic’s post on X (formerly Twitter) outlined the implications of these fees. He argued that such practices bleed projects dry and cause their token prices to crash due to large supply allocations being given away.
“These excessive CEX listing fees are devastating,” he wrote, “and they make sustainable growth almost impossible for new crypto ventures.”
Asset listings on Coinbase are free – drop us a note through our Asset Hub and we’ll see if we can helphttps://t.co/Weoa8MhLeq
And yes, DEXes are also a great option (which we support in our products). https://t.co/cjp0Avu4uC
— Brian Armstrong (@brian_armstrong) November 2, 2024
Binance Responds to CEX Listing Fees Accusations
In response to the backlash, Binance co-founder Yi He issued a statement refuting the claims. She took to X to defend Binance’s listing practices, emphasizing the platform’s rigorous screening process. “Projects that fail our stringent checks won’t be listed, regardless of the money or tokens they offer,” Yi He clarified.
Moreover, she highlighted Binance’s commitment to transparency. Back in 2018, Binance made headlines when it promised that all listing fees collected would be donated to charity, allowing projects to propose their own “donation” amount.
Yi He reiterated that Binance’s policy remains unchanged, and rumors about exorbitant demands are often based on competitive FUD (fear, uncertainty, and doubt).
Despite these reassurances, critics argue that the so-called “donations” still favor projects with deep pockets, perpetuating a lack of access for smaller, innovative ventures.
Coinbase Listing Fee Dispute
As Binance scrambled to clear its name, Coinbase CEO Brian Armstrong attempted to distance his platform from the scandal. Armstrong proudly declared that Coinbase listings are free and that the company supports decentralized exchanges (DEXs) as an option for projects unable to navigate CEX listing requirements.
However, Armstrong’s claims were soon challenged by Andre Cronje, co-founder of Sonic Labs. Cronje revealed that his project faced demands from Coinbase that ranged between $30 million and $300 million. This sparked outrage, as it called into question the narrative that Coinbase offers a more accessible or fair listing process.
The controversy deepened when Justin Sun, the founder of Tron (TRX), accused Coinbase of requesting a payment of 500 million TRX tokens, then worth $80 million, plus a $250 million Bitcoin deposit.
These allegations raised serious concerns about fairness and whether CEX listing fees are inhibiting growth and accessibility for promising blockchain projects.
CEX vs. DEX: A Growing Divide
Even with these controversies, centralized exchanges continue to dominate the crypto trading market. Data from Messari shows that CEX listing fees and their practices have done little to reduce their market dominance. CEXs account for an astounding 90-95% of trading volume, dwarfing decentralized exchanges (DEXs).
At the time of writing, CEXs commanded a total of $17.27 billion in trading volume, making up 94.52% of the $18.27 billion market, with DEXs lagging far behind at 5.48%.
Despite the criticisms, factors like high liquidity, user-friendly platforms, and institutional-grade security keep CEXs ahead in the game.
Still, the call for greater transparency and fairness in CEX listing fees has sparked a renewed interest in DEXs. Developers and smaller projects are increasingly looking to these decentralized platforms as more equitable alternatives.
