Binance recently decided to delist all its leveraged tokens, and its competitors are quickly stepping in as they see an opportunity to offer the same services.
Binance made a splash recently by delisting all leveraged tokens linked to the FTX Exchange. The tokens, which move in tandem with their respective peg (like ETH or EOS), were deemed too risky by Binance. The reason for the delisting was to ‘protect users,’ however, the move caused widespread outrage.
Other Exchanges See an Opportunity
In light of the delisting, competitors have seized the moment as a golden opportunity to differentiate themselves from Binance.
BitMax, for example, announced yesterday that it will be listing 12 of the leveraged tokens cut from the Binance roster just days after the exchange delisted them.
As of now, not many other exchanges support leveraged tokens. Gate.io is one notable exception, but Binance was by far the most popular destination for this kind of trading. FTX Exchange itself, of course, remains the top destination for leveraged token trading since the idea was its invention.
We can likely expect other top exchanges to add leveraged tokens in the near future as the Binance controversy over delisting them continues.
Will Binance Release its Own Leveraged Tokens?
Some were speculating that the reason Binance delisting leveraged tokens is because it was simply not profitable. Instead, it was done through a partnership with the FTX Exchange, which is now effectively over. The tokens were among the most-traded on the entire exchange.
However, Binance already offers margin trading which allows users to speculate on future value. It seems unlikely that the exchange would want to complicate matters by releasing its own leveraged token. As others commented, the easier solution for users would be just to go to FTX Exchange if they want to trade leveraged tokens.
FTX Exchange hasn’t been without its controversies, however. In November 2019, BeInCrypto reported that the exchange was hit with a $150 million ‘nuisance suit’ filed in a US District Court in Northern California.
Then, earlier this month, someone tried to pump-and-dump FTX Exchange’s token (FTT) on Binance. The wild fluctuations saw the token hitting $3.80 before dropping all the way down close to $0.40. It has since stabilized around the $2.30 price point.