The so-called “Binance effect” might be a thing of the past, thanks to tokens that launch with a high fully diluted value (FDV) and insiders using the listing as an opportunity to cash out and realize outsized gains at the expense of retail investors.

According to analysis from SwissBorg’s DeFi and Investment researcher “@tradetheflow,” more than 80% of new token listings on Binance in the last six months are down since the date of their listing.

 

The most notable declines were seen across tokens like AEVO, which has been backed by Coinbase Ventures, Pantera Capital, Paradigm and Dragonfly, and is down 68% since its listing on Binance on March 13. Other tokens like AXL and W which also launched with major VC backing, have lost more than half their value despite listing within the last two months.

The only major exceptions noted were memecoins like MEME and WIF, which likely rallied on the back of continued momentum in these tokens which have become a major narrative for crypto this year, JUP and JTO which were driven by momentum around Solana, and ORDI which was not backed by a major VC firm at launch.

“Most of new Binance listings are tokens backed by Tier-1 VC and launch at crazy valuations. The average FDV on Binance listing date is over $4.2B, with some even reaching a ridiculous FDV of over $11B [billion],” said tradetheflow.

“And often those projects have no real users or a strong community behind.”

In his view, more often than not, tokens launching on Binance already have their upside potential taken away and merely represent exit liquidity for insiders that capitalize on retail investors’ lack of access to early investment opportunities.

“In many ways the game is rigged and this current meta is not a net positive for crypto. Far from it,” said tradetheflow, adding that this path is “unsustainable” and discredits the crypto industry.