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Binance Initiates Outreach to Lesser-Known Crypto Projects in Effort to Elevate Trading Activity

Aug 25, 2023 at 03:31 pm

Binance, the leading cryptocurrency exchange in terms of trading volume, has initiated a proactive "risk management initiative" aimed at engaging with select crypto projects characterized by relatively modest market capitalization or tokens involved in lower-liquidity trading pairs.

The exchange has reached out to a number of these projects, seeking to gather insights into their market makers and their willingness to contribute a portion of their tokens to Binance's savings pools. This strategic approach is designed to achieve a dual objective: bolstering market liquidity and mitigating the potential risks associated with price manipulation.

In a bid to "enhance liquidity protection," Binance's team has recently contacted several digital asset projects listed on its platform. These projects are identified by their lower market liquidity trading pairs or relatively smaller market capitalization, factors that could expose users to potential risks, including instances of market manipulation.

The exchange's queries include inquiries about the market makers affiliated with these projects and their openness to allocating up to 5% of their circulating tokens to Binance's savings pools. This proposal is intended to incentivize participation by offering interest on the contributed tokens. These developments were initially reported by The Block and were supported by unverified screenshots shared on X, the social media platform formerly known as Twitter.

The spokesperson for Binance elaborated on the initiative, stating, "Our risk management outreach primarily aims to encourage project teams to implement recommended measures that enhance the protection of their liquidity. Engaging the support of market makers stands as one approach to reinforcing such safeguards."

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