Thread by @tayvano_

re: Binance & CMC acquisition.

While one of the largest acquisitions in the space, I still find the price tag (rumored to be $400M) very cheap...for a company like Binance.

No, *you* shouldn't pay $400M. But no doubt Binance will easily get >$400M of value, even in medium term.

Some are looking solely at the # of customers/users on Coinmarketcap.
Their customers are advertisers, not users. Their users are speculators.

Every customer of CMC will still be a customer of CMC. *Every* user of CMC is a potential customer of Binance.

$400M value, easy.

But thats less interesting than other value.

We don't exactly know how Binance decides to support new coins, but one way is asking people. By the time people tell you they want a shitcoin, it's too late for an exchange to capture most of the value of that shitcoin.

If you can detect interest in coins automatically w. hard data, you can capture that value.

Your ROI increases as the disparity between interest and # of exchanges that support that coin increases.

All of this data is now yours if you own CMC.

Again, $400M value, easy.

Now, most people know that the people behind CMC are very secretive about their identities bc people will go to great lengths to affect the information on CMC.

Getting a new coin listed or exchange listed on CMC can lead to millions or billions of value for those creators.

Binance is already in a similar boat so they will have no (new) problems protecting themselves from people who would do anything to make X happen or get Y listed.

The concern lies with their new ability to control what and when things are listed.

Of course, outright manipulation or shady acts by Binance is possible, but far more likely they'll do stuff like listing a coin on Binance before CMC. And, they'll sleep easy bc "if they listed it before it was on Binance, it could be manipulated due to low data availability."

I also think that Binance will do a better job overall at detecting exchanges providing fake volume / adjusting algorithms. I don't think Binance will blatantly manipulate that.
But, subtle short-term decisions made for "net good of ecosystem" can have high impact.

You can make a net positive decision for the good of ecosystem and also ensure it is a very net positive for you.

Without any moral dilemma in doing so.

It's likely these decisions will solidify Binance, even if we don't know how or what.

As example, if Polo didnt list ETC in 2016, ETC could've never existed. Or someone else could've listed it & nothing would be different. There are strong arguments for both. We just don't know.

Regardless, Binance will see $400M of value from CMC easily over short/medium term, easy.

Very subtly directing more people to Binance / less to other exchanges = win.

Just Binance listing a new coin they wouldn't have otherwise listed = win.

Just detecting exchanges who are winning market share earlier = win (if Binance adjusts their decisions based on that info)

e.g. in ~1 year, an entire market moved from being served by Polo to Binance. No doubt CZ knows how he did that.

CMC data puts him ahead of everyone.

The biggest winners here are the creators of CMC. They've prob lived a sleepless, paranoid existence since obtaining (unintentionally?) a level of influence that makes or breaks people, products & entire markets.

I'm sure there were times they would've taken $0. $400M? Easy. 🤯

Another thought:

Binance is focused on the entire crypto market—NOT any one network. We've seen this a bit w/ Trust Wallet's product decisions.

It's unlikely we'll see them doing network-specific stuff like @coingecko has done with their ETH token API & coingecko.com/en/earn/dai