Why hasn't SUI been listed on Binance (Launchpad)?

Author: Julian, Sui World

Recently, Sui will officially launch its mainnet on May 3rd, and the announcement of the listing of Sui Token on exchanges OKX, Bybit, and Kucoin has attracted significant market attention. (Note: OKX, Bybit, and Kucoin are also members of MoveAccelerator)

At the same time, there are many voices in the community asking, Why not Binance? When Binance? As a star public chain that completed over $300 million in financing last year, Sui, like Aptos, also received investment from Binance Labs, but why did Aptos receive significant initial support from Binance while SUI did not choose Binance Launchpad?

This question can actually encompass and extend a series of questions, such as:

1. Why did SUI not choose Coinlist or Coinbase for public fundraising as rumored in the community?
2. What might have prevented SUI from reaching an agreement with Binance for Launchpad?
3. When will Binance list SUI?
4. What does choosing CEX public fundraising/IEO instead of on-chain airdrops mean for the SUI ecosystem?

This article only represents the author's communication and整理 of opinions from some industry insiders to attempt to answer these questions and does not represent the views of Sui World or any institution, nor does it constitute any financial or investment advice.

1. Why did SUI not choose Coinlist or Coinbase for public fundraising as rumored in the community?

Keywords: Compliance, Decentralization.

These two answers can explain many of today's questions. Sui ultimately did not choose Coinlist or Coinbase for public fundraising because it hoped to achieve sufficient compliance while also being decentralized.

As early as the beginning of this year, Sui's founding team revealed in discussions with the community that they had considered choosing Coinbase for public fundraising. Listing on Coinbase would undoubtedly be the best compliance path, but Coinbase has not shown any signs of launching its IEO/public fundraising feature that it announced back in 2019. Additionally, Coinbase received a Wells Notice from the SEC last month, informing them that due to violations of investor protection laws, the SEC would take enforcement action against them, and Coinbase is even considering relocating its headquarters outside the U.S. Therefore, conducting an IEO on Coinbase at this stage still poses compliance challenges.

Another point is that CoinList previously released a teaser animation with "5.02.2023," leading users in the crypto community to speculate that CoinList might conduct Sui's public fundraising on May 2nd. However, as Sui mentioned, the reason for not choosing CoinList may be the desire to accelerate decentralization through a community access program and diversify participants, expanding geographical coverage as much as possible to allow broad participation from all regions of the world.

In summary, SUI ultimately chose OKX, Bybit, and Kucoin over Coinlist and Coinbase due to considerations of compliance and decentralization.

2. What might have prevented SUI from reaching an agreement with Binance for Launchpad?

Keywords: Exclusivity Agreement, Launchpad Product Rules, No Short Selling on Perpetual Contracts

Since Binance first launched Launchpad (IEO) in 2019, 29 projects have been listed through Launchpad. The IEO rules of other major platforms are generally consistent.
In this IEO of SUI with OKX, Bybit, and Kucoin, what is different from the past is that after confirming the number of winning tickets, users can only unlock 1/13 of the new tokens on the same day, with the remaining 1/13 unlocked at the same time each month, completing the unlock within a year. At the same time, the platform will also cooperate with SUI to initiate additional whitelist sales.

Looking back at the 29 Launchpad projects from Binance, none had a phased unlocking rule, nor had they launched additional whitelist sales products specifically for project parties. Therefore, the restrictions of Launchpad product rules may be one reason why Binance could not choose SUI for Launchpad.

Compared to product rules, another more important reason may be Binance's exclusivity agreements. Whether it is for initial tokens or investment projects, Binance typically has some exclusivity agreements regarding other trading platforms, which is a common industry practice.

For example, in the case of Aptos (APT), Binance participated in two rounds of investment in Aptos and has an exclusivity agreement with Aptos not to cooperate with certain platforms. Binance may also impose similar requirements on SUI. Therefore, Binance's inability to agree to SUI being listed on multiple platforms for IEO, and SUI's refusal to accept Binance's exclusivity agreement, may be one reason why SUI and Binance could not reach an agreement for Launchpad.

It is worth noting that even if the project party launches on Binance and signs an exclusivity agreement, it can still be a double-edged sword. For instance, Aptos (APT) once required major exchanges not to list perpetual contracts within two weeks, but on the day Binance listed APT, it also launched APTUSDT 1-25x perpetual contracts, while mainstream contract exchanges like OKX and Bybit initially did not announce the listing of perpetual contracts until after Binance did.

Sui may have also requested major exchanges not to list perpetual contracts for short selling within a certain period, but Binance ignored this, leading Sui to choose to launch on other exchanges and possibly reach agreements to restrict the listing of short-selling derivatives.

3. When will SUI be listed on Binance?

Keywords: Ask CZ.

I really can't say for sure; you would have to ask CZ. However, a person related to Binance's business indicated that SUI should be very confident about eventually being listed on Binance, so SUI launching on other exchanges for IEO first and then later on Binance is also a possibility.

Therefore, one possibility is that Binance announces the listing of SUI a few days before the mainnet launch. If Binance lists SUI at that time, it may also simultaneously launch perpetual contracts.

Another possibility is that, according to Binance's style, they will wait until the SUI network stabilizes and meets Binance's listing standards before listing. The core of Binance's listing standards is the number of users.

If SUI's popularity can maintain the heat of the testnet before the mainnet launch, then the number of users should not be a problem. If SUI, like Aptos, has hundreds of active projects and 6000+ TPS during the testnet, but the ecosystem projects quickly cool down after the mainnet launch, with TPS remaining in single digits for a long time, then Binance may delay the listing.

If SUI continues to fail to meet Binance's listing standards, it may wait until the chips from Binance's investment in SUI begin to unlock before choosing the timing for the listing; specific attention can be paid to the relevant unlocking schedule.

4. What does choosing public fundraising/IEO instead of airdrops mean for the SUI ecosystem?

Keywords: Lack of Initial Tokens on-chain

Sui has repeatedly stated in various occasions that there will be no SUI airdrop plan. An airdrop refers to the large-scale distribution of tokens to existing or potential users (initial token distribution) through blockchain technology to enhance project awareness (marketing).

It must be said that Sui's community access program with a scale of 100,000 participants (public fundraising) and the participation of hundreds of thousands of potential users in the IEO has indeed had a significant marketing effect. It has also severely impacted on-chain opportunists and rewarded real users to a large extent, representing an innovative attempt.

However, from the perspective of initial token distribution, it means that the value of Sui's initial token distribution has mostly been captured by CEX users, such as platform token holders capturing part of the initial allocation of Sui Token.

Sui's initial token distribution is entirely within centralized exchanges (CEX) rather than on-chain, which means that at the time of the mainnet launch, no ordinary user on-chain addresses hold Sui Token. This may not be good news for some ecosystem projects, as there is a lack of initial tokens on-chain.

Because users need to first purchase Sui Token on centralized exchanges (CEX) and then transfer them on-chain to participate in ecosystem projects. Even for whitelist sales users targeted at ecosystem contributors, they must first become CEX users, then subscribe to Sui Token, and finally transfer them on-chain to participate in ecosystem projects. This withdrawal process will result in a significant loss of users.

In contrast, if L1 conducts on-chain airdrops, even if over 80% of users receive the airdrop and immediately recharge to sell on exchanges, there will still be 20% of addresses holding airdropped assets on-chain. These on-chain assets will be used for gas fees, interacting with various applications, trading NFTs and FT assets, etc., which are very important for the cold start of early ecosystem projects.

It is worth mentioning that in response to the lack of initial tokens on-chain for early ecosystem projects, MystenLabs and SuiFoundation have organized some institutions to help provide liquidity/TVL for some foundational infrastructure projects they have invested in. How the Sui ecosystem projects will develop ultimately requires further observation.