I recently wrote about Binance Launchpad and Initial Exchange Offerings where I mentioned that it is in my opinion the next wave or format of fundraising for crypto projects.

I believe Binance launchpad has by far the most attractive offering as a result of their maturity, their large user base and the way they handle these projects.

In general IEO or Initial Exchange offerings has become a great and hot topic in early 2019. Binance managed three successful IEO's in January, February and March where they raised a lot f money for projects in a short time period, with the Celertoken raising $4 Million in only 22 Seconds.

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This left a lot of users unhappy as a result f not even getting the chance to buy the token due to the huge demand of buyers. During this sale Binance Launchpad limited the purchasing to a minimum of $20 and a maximum of $1500 worth of tokens per buyer.

This left Binance with little to do to satisfy all their customers and it was suggested that a lottery system is used to allocate tokens to users or in other words ensure that people can only purchase tokens in this sale when they own a lottery ticket to enter the IEO.

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How will the lottery system work?

• Binance, the world’s largest cryptocurrency exchange in terms of trading volume, has announced that it will be introducing a new type of “lottery format” for the next Binance Launchpad event.
• Binance Launchpad allows crypto projects to conduct their token sales through the exchange's platform.

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Users will be allowed a maximum of 5 lottery tickets

You will be able to purchase 1 ticket for each 100 BNB tokens - the Binance Native token - you hol for 20 days prior to the sale. A snapshot of the Binance wallets will be taken each day at midnight in order to ensure each user who wish to participate in the sale holds the number of tokens required for each of the tickets they want to use.

Moreover, Binance claims its lottery draw will be carried out through “a transparent, randomized system with a random selection of lottery tickets based on tail digits.” This means that “users will be able to claim up to a maximum of 5 lottery tickets” according to a set formula. For example, if a user keeps at least 100 BNB and up to 199 BNB in their Binance account, then they will receive 1 lottery ticket - in order to participate in the exchange’s lottery program.
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Multiple ticket holders will be assigned consecutive numbers

When a user holds between 200 and 300 Binance tokens for the allotted 20 days prior to the sale the user will receive two lotto tickets to participate in the lottery.

The Binance Blog Post explains:

Each lottery ticket has a unique number. If you claim multiple lottery tickets, the numbers will be consecutive. For example, if you claim 5 tickets, your ticket numbers may be 100010, 100011, 100012, 100013 and 100014. These numbers are used in a transparent draw mechanism described later.

A very interesting part is that the number of lottery tickets available will be based on the amount of funds the project wants to raise.

To quote the Binance blog:

For every new token project introduced through Binance Launchpad, the exchange will reportedly reveal “the maximum number of potential lottery ticket winners.” Moreover, the specific “allocation amount” associated with each “winning ticket” will be announced “ahead of time.” As noted in Binance’s blog: “For example, 10,000 potential winning tickets, each representing 500 USD worth of tokens. This will change for each project on Launchpad.”

Before the lottery date for a project, Binance account holders “will be given a 24 hour period” during which they must decide “how many lottery tickets they wish to enter,” the exchange’s blog mentioned. A user can enter tickets according to a “maximum number to be based on their BNB holdings over the past 20 days” and “entering this ticket amount is a commitment to purchase the amount of tokens corresponding to [the user’s] eventual number of winning tickets.”

Users will therefor have the opportunity to decide how many lottery tickets they wish to enter and therefor decide how much tokens they want to buy in the upcoming sale.

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It seems like a very exciting way to execute an IEO and I am really looking forward to the next sale. Please let me know your comments, questions and thoughts in the comment section below.

Happy Steeming!

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