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Binance Is Fueling Outsized Returns for Group of New Crypto Assets

November 03, 2020

Investors are earning above-average returns by taking advantage of initial exchange offerings (IEOs) on Binance Launchpad, according to a Messari researcher.

Jack Purdy, a senior research analyst at the crypto analytics firm, is crunching the numbers.

He says IEOs appear to be quietly mounting a comeback, highlighting the recent success of The Sandbox (SAND), Alpha Finance Lab (ALPHA) and Injective Protocol (INJ).

Purdy says their success is due in part to the fact that some Binance Launchpad projects are releasing a much larger percent of token supply compared to other offerings.

“This helps facilitate more efficient price discovery as new tokens flooding the market don’t comprise as large of a percentage of circulating supply. In addition, these sales have been priced at reasonable valuations. This contrasts with other tokens that launched and have fallen victim to absurdly high initial valuations set by the market.

By nature of the fixed price sale + lottery structure, it creates pent-up demand which nearly always leads to a large price increase upon initial trading. This is predictably followed by a gradual decrease in price.”

Still, Purdy says the majority of IEOs have proven to be a good investment for the investors picked in the lotteries.

Axie Infinity is a gaming platform that recently released AXS, an ERC-20 governance and utility token on Binance Launchpad.

Binance reported launching a total of five projects this year, including Axie Infinity, which raised more than $11 million.

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