What is a listing
For startups conducting ICOs, it is important to bring their recently released digital tokens to reputable exchanges. This not only increases the credibility of their projects, but also increases the likelihood that the token will increase in price, as more and more investors will have access to it. This process is called listing, and today we’ll talk about it.
Listing is the admission of a company’s securities to trading on the exchange. A listing of securities becomes necessary when an Open Joint Stock Company plans to issue shares or debentures to the public. In order for the assets to be quoted on a particular exchange, the company is obliged to fulfill a number of requirements, some of which are common to all trading floors, and some relate to individual conditions.
Listing provides an exclusive privilege to securities – the stock exchange ensures transparency of operations with securities, as well as equality and competitive conditions. Listing is beneficial both for companies and for investors and for the general public as well. Listing new cryptocurrencies is an equally important process.
Each ICO will end sooner or later, but this should not lead to a drop in the number of people interested in this project. Here exchanges come to the rescue, which enable companies to continue to popularize their cryptocurrency after the official completion of the ICO.
Placing a token on the exchange can increase its value by 15–20%. For this reason, the placement of cryptocurrency is one of the most important tasks for the company after the Initial coin offering.
Why stock listings matter
Putting a coin on the list on reputable and large trading platforms is of great importance – in fact, this is the difference between success and failure of the entire campaign. For ICO projects that leave most of the currency for themselves and their team, such coin support is a guarantee that they will have enough funds to support and develop their project.
Also, success requires some stability, without price fluctuations, especially if token holders plan to use their coins as part of the project development for various actions and developments.
Plus, the reputation moment is important – the more popular and liquid trading platforms support the exchange of tokens – the better its reputation becomes, the more users get it, the more interest in the project itself and, as a result, the more interested investors.
General requirements for placing a token on the exchange
Now the market can offer more than five hundred exchangers, and new ones appear almost daily. Listing requirements vary on each platform, but there are general conditions that must be met.
- The project should be original and bring valuable innovations to the crypto world. That is, the token should be based on high-quality and valuable products or services. It is worth remembering that copies of blockchain usage scenarios or existing platforms are not considered unique, since they can be one-day and cannot be fixed in a market that is developing by leaps and bounds. The idea is that the project must be original so that an authoritative exchange is interested in it. It should show an innovative way to fill certain gaps in the market or provide a better alternative to already existing products.
- Developers need to pay special attention to the design and code of the project. Small exchanges may not focus on such characteristics, but large resources will certainly do so. If a project is full of weaknesses that can play into the hands of hackers and lead to the theft of assets, it will never go through strict selection and will not be successful.
- Also, exchanges always require the provision of all information about the project, for example, technical specifications, team details and a token sales business plan. Some may request code verification to make sure the project is transparent and secure. It is for this reason that most ICOs post data about their source code on GitHub. They may also request: the size of the token delivery, commission levels for transactions, all visual data that relate to the coin, such as, for example, the logo.
- For the listing procedure on the exchange, each token must pass the Howie test. This is a test created by the US Supreme Court to determine if certain transactions qualify as “investment contracts”. If so, then in accordance with the Securities Act of 1933 and the Securities Act of 1934, these operations are considered securities and therefore are subject to certain requirements regarding use and registration. This is the main reason why, in order to avoid legal issues and to comply with the law, many exchanges will only accept official tokens and digital currencies in the listing. Sometimes, a written statement by a law firm may be required from the exchange to prove that the coin is not a security.
What we emphasized above is only the basic requirements that need to be prepared. In addition to all this, exchanges have their own individual requirements, which will vary from one exchange to another. But in any case, the first thing that needs to be done to get the token indicated on the crypto exchange is to contact the desired platform.
For example, if the goal is to get on the list on Binance – the site has a special page through which blockchain projects can submit their coins for consideration. This is not always so simple, and sometimes it takes more effort and searching for the necessary contacts to contact a specific exchange and send them your coin.
And then a long waiting period follows, while the exchange will evaluate and analyze the project. It is also important to remember that some exchanges charge a fee for listing cryptocurrencies, and it can be quite high (according to available information, from 50,000 to 1 million US dollars in BTC), so an aspiring startup should be able to satisfy such financial requirements.