Exchange listing is the process through which a token or coin issuing project places its native asset up for trading on a platform that offers cryptocurrency trading services. Listing can be considered one of the most important stages of development for a project, since it ensures the commencement of live trading of the native asset, providing liquidity and circulation, which in turn sets in motion the law of supply and demand.
In the given material, we will take the example of the TON token to explore the main reasons for token listing on exchanges, as well as the stages that a digital asset should go through before being listed.
Exchange Listing Basics
The process of listing an asset starts after the token or coin has been released and the underlying blockchain mainnet is operational. This allows the asset to be transferred between wallets, purchased and sold. These actions ensure the circulation of the asset and allow it to be traded by users.
Listing starts with negotiations with select exchanges. Each exchange has its own rules and criteria for token listing. In order to have the asset placed on the trading list of an exchange, the issuing project must first comply with the rules and fulfill some requirements. Listing is often free, but some exchanges may either have a set fee, or require a small percentage of ensuing trading flows as a commission for their services.
Listing on an exchange allows the asset to be traded freely between users, thus ensuring the following advantages for the issuing project:
- Higher reputation;
- Market visibility;
- Liquidity flows;
- Additional popularity;
- New users.
Conditions for Listing
In our example, let us consider that the TON token is considering listing on exchange XXX. The project team submits a letter of application to the exchange and waits for the exchange team to reply. The reply will contain a number of documents, which have to be filled in the format of a form containing information about the project team, its economic and business model, technical descriptions of the token, and others.
Once the project team submits the application, the XXX exchange team will review the material and evaluate the TON project based on the team’s experience, its prospects, economic model, and other parameters.
Fundamental analysis is conducted as part of the evaluation procedure and will also entail a complete audit of the legislative norms to ensure that the exchange will bear no legal repercussions for listing the TON token. Once the XXX exchange team has concluded that the TON token can be listed, the two teams sign a partnership agreement and release a joint statement about the upcoming listing.
Once all the preparations have been made, the TON token is listed on XXX exchange and is added to the list of available assets, with the users given the ability to purchase and trade the asset.
Token listing is often followed and preceded by various events and promotions, which are intended to increase awareness about the TON token and attract more users to participate in trading it. Among such activities are giveaways, airdrops, various contests, and engaging events.
Types of Events after Listing
Listing is sometimes conducted prior to the release of the asset for open trading on the project’s own resources. This is done to allow a larger number of users to participate in the sale event. Such events are called ICOs or IEOs – Initial Coin Offerings, or Initial Exchange Offerings.
Exchanges provide the ideal platform for conducting such events, since they provide both the necessary technical infrastructure for trading and an available audience of users who will be interested in acquiring the new asset. Such an approach is extremely popular among exchanges and projects that need to attract popularity to their venues and are hosts of market activity.
Delisting
Sometimes, an asset can be removed from an exchange through an action called a “delist”. Delisting can happen for several reasons:
Low liquidity and capitalization of the asset due to poor performance.
Fraudulent activities on the part of the project that violate its image and have resulted in damage to users.
Violation of listing terms and other actions that may have resulted in damage to the reputation of the exchange.
Regulatory bans, which can result in the token being deemed illegal for any number of reasons.
Team fraud, which means that the project team has engaged in fraudulent activity and is no longer trustworthy.
These and other reasons are common for assets to be removed from exchange lists. Delisting is often regarded as a measure of last resort, signifying that the asset in question is in very poor financial condition.
Key Takeaways
Listing is the process of adding an asset to a cryptocurrency exchange’s list of traded assets. Listing is a very important event for any digital asset, since it means that the token or coin has been approved by the exchange’s team and can be deemed trustworthy. Listing also provides projects with significant inflows of both liquidity and new users.
