The founder and CEO of leading cryptocurrency exchange Binance is opening up about the process his company goes through before backing a coin and adding it to the platform.
Changpeng Zhao told CNBC’s Crypto Trader it takes an intense amount of research and consideration of three key fundamentals.
“In order to learn about a project you have to look at the white paper, read it, understand it. Play with the product. Research the community. Look at the source code on GitHub. Look at the community reviews – Reddit.
So there’s a lot of stuff going on. But fundamentally we look for three things. We look for a good team. Ideally a team with history. A team with ability. It’s kind of hard to tell if they’re going to do the right thing or the wrong thing. But a team with a good history tends to carry on. And we look for products. So if you just have a concept, that’s good. But I think Binance is slowly no longer listing concept coins. We’re too big. If you just have a concept, you can list on a smaller exchange first, and we can monitor the performance of your business.
We want a product to have users, so that’s the third thing. So we actually check how many users you have. We don’t publish any hard standards like saying you have to have 10,000 users on Telegram. Because if we say that, people are just going to incentivize others to join their Telegram group. So we don’t publish any hard metrics. But fundamentally, if you have a good project, we will list it. And we don’t have a contact person for you to talk to. People come up to me and say, ‘Hey CZ, I’ll give you $20 million to list my coin.’ I’m like, ‘I don’t need that money, thank you.'”
Zhao also addressed speculation on how much money Binance charges to add a coin, saying the company is willing to list coins without charging anything.
“What we do is we don’t negotiate, and we don’t ask for a price. The project team, when they submit an application, they tell us what they want to pay. And you can say zero, which we will accept. And we have listed coins that have said zero.
You have to have a good product, a good service. I think our service is ok. To be honest, it’s not perfect. I really want to improve it. But I think in the industry, we’re kind of good compared to others. But I think the other big thing is your ethical behavior.”
Those ethics are one of the main reasons why Binance is successful, according to Zhao. When companies act responsibly, Zhao says people will find out and spread the word.
“There’s a lot of dodgy stuff that goes on in the crypto space. We want to be the most ethical, most powerful exchange. So that’s our philosophy. We really want to protect users. We actually don’t say that a lot publicly. But people understand it. People are smart. So people tell other people we’re a good exchange.
We have to use our power very carefully. We’re very careful about the projects we support because whichever one we support, everybody rushes in.”