Polkadot founder condemns Binance and Kraken for rushed listing of DOT tokens

Polkadot founder Gavin Wood called exchanges that added DOT tokens to the listing immediately after their unlock added ‘unscrupulous’. He believes that in light of the asset’s upcoming redenomination they exposed the community to risk.

As forewarned, some unscrupulous exchanges listed today rather than Friday — the Denomination Day agreed upon by the @Polkadot community.

While we can’t control these CEXs, we can urge them to stop.

Their actions are putting our community at risk.

— Gavin Wood (@gavofyork) August 18, 2020

Wood’s displeasure was directed at Binance and Kraken. Both of these exchanges added the DOT tokens to listing two days before the planned denomination.

According to the head of the Polkadot project, the Web3 Foundation behind the project’s development is exploring all available options to protect the @Polkadot community from unscrupulous exchanges.

The @web3foundation is exploring all available options to protect the @Polkadot community from unscrupulous exchanges.

You can read all of the background on redenomination here:https://t.co/DzeYQK2FZa

— Gavin Wood (@gavofyork) August 18, 2020

On August 21 at block 1,248,328, as a result of the redenomination, each existing DOT token will be split into 100 new ones. The project leadership warned that due to the hasty listings on exchanges the market value of DOT on such platforms could be 100 times lower than the current price.

These fears were borne out. In a comment to DeCrypt representatives of Polkadot noted that DOT holders in a panic could dump their tokens in connection with a potential 90% drop in price. They stressed that the exchanges’ actions demonstrate a growing chasm between the interests of community-oriented projects and large trading platforms.

Some members of the community confirmed lack of transparency regarding the upcoming redenomination, which could have led traders to take erroneous actions.

You write on your blog that the redominate action will take place 21st of August, not now. This is quite unclear. I think some people got orders filled against way to high prices. pic.twitter.com/ASljmc0Wyj

— On The Block (@otblockchain) August 18, 2020

Until this week DOT tokens were not transferable on off-exchange platforms. To give the ecosystem time to prepare for the update, it was decided that the redenomination would take place roughly 72 hours after DOT transactions became possible.

The agreed waiting period began on Tuesday, August 18, with listings planned to take effect starting Friday, August 21. However, Kraken and Binance added DOT using the new denomination before the changes actually took effect. This triggered price flows indicating a drop in the token’s value by about 90%.

In a community letter, representatives of Polkadot lamented that after governance of the protocol was handed to the validators, the project had little room to “hold third parties to account.” Polkadot believed that Binance and Kraken “went against the community and caused chaos and confusion among DOT holders.”

A Kraken spokesperson told the publication that the exchange acted in the interests of its clients. Binance did not respond with a comment as of this writing.

In July, the Web3 Foundation conducted another private token sale of DOT, raising $43.6 million.

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