Leading cryptocurrency exchange Binance has announced the launch of an “Innovation Zone’ to filer out traders based on their risk appetites, before letting them trade risky decentralized finance (DeFi) projects.
According to an announcement the cryptocurrency exchange published, its token listing process is “often viewed as overly strict,” but listing new projects in 2017 when it launched was not a problem, but now that it has a wider user base different users have different opinions on what it should list.
The exchange noted it needs to list popular projects while trying to avoid scams. As an exchange, it wrote, it needs to list popular cryptoassets in order to stay competitive. As such, it will continue listing tokens associated with decentralized finance (DeFi) projects, but will do so in the Innovation Zone.
The Innovation Zone, Binance wrote, will allow traders to trade newer token offerings from their Binance accounts without having to use a Web 3-compatible wallet and a decentralized exchange, as using a DEX through a self-managed wallet requires some knowledge and expertise.
To access the Innovation Zone, however, traders will have to answer two questions. One is on the likelihood that they will incur losses or a total loss of their capital in the Zone. The options are either 50% or more, or less than 50%.
- If you answer less than 50%, you won’t be able to trade in the Innovation Zone. Good traders can lose more than 50% of their trades and still make profits. This typically comes in the form of many small losses and a handful of big wins.
This question, the exchange wrote, will help filter out those with a mindset incompatible with the new Zone, such as those who believe trading is “low risk.” The second question will ask whose fault and responsibility is it if the trader incurs losses, of Binance of their own.
If the trader answer it’s Binance’s fault, they won’t get access to the trading zone, as if they blame the exchange they “probably shouldn’t be trading at all and should revaluate” their approach.” Binance hops these questions will help filter out novice traders.