Binance Reaches Out to Smaller Crypto Projects to Improve Trading
The cryptocurrency exchange is starting a "risk management effort" focused on certain crypto projects with relatively small market value or tokens that have less trading activity.
Binance has communicated with a few projects, inquiring about their market makers and whether they would be open to adding some of their tokens to Binance savings pools.
The aim is to increase trading activity in the market and reduce the chance of manipulating prices.
Binance, the world's biggest cryptocurrency exchange based on trading volume, has gotten in touch with some crypto projects that have low trading activity for their tokens, all in an effort to "strengthen their trading stability."
"In the last week, our team got in touch with a few projects that have digital assets listed on our platform as part of our ongoing risk management effort," a spokesperson informed CoinDesk via email. "These projects have trading pairs with relatively low market activity and/or a smaller market value, which could expose users to risks like potential market manipulation."
The exchange has asked these projects for information about their market makers and whether they would be interested in contributing up to 5% of their circulating tokens to Binance savings pools, earning interest in return. The Block, which reported this news earlier, revealed that there were similar requests visible in unverified screenshots shared on X, the social media platform formerly known as Twitter.
"Our primary goal with this risk management outreach is to motivate project teams to take the recommended actions to strengthen their trading stability," the spokesperson commented. "Getting support from market makers is one approach to achieve this protection enhancement."