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Coinbase: Why Easy, Free Cryptocurrency Listing Can Be a Problem

Coinbase wants to democratize the creation of digital currencies

What does it take to be able to list your token on an exchange and see it increase in value? Not much according to Coinbase, which published a blog post on June 1 about its free listing. This big name in crypto advocates for a democratized cryptocurrency, both in its distribution and in the acceptance of new digital assets.

As part of our efforts to level the playing field, listing an asset on Coinbase is, and always has been, free. We do not charge listing or application fees to issuers of assets. Unlike many exchanges, we also do not charge an up-front asset marketing fee or require issuers to adopt Coinbase’s other services. Some have speculated otherwise, but that is simply not true.

Excerpt from Coinbase blog post

However, according to the platform, there is no question of allowing anyone to list their currency. In its article, Coinbase demonstrates a multi-step verification process.

1. Registration. Asset issuers begin by creating an account in our Asset Hub and submitting a request with all relevant information about their asset.

2. Evaluation. Coinbase’s Digital Asset Listing Group (DALG) assesses information submitted through Asset Hub using our standard listing assessment framework to ensure the asset meets eligibility criteria for our legal security reviews, compliance and technical.

3. Listing. Once approved by DALG and integrated into our platform, the asset can be listed on our exchange. Being listed on an exchange does not mean that Coinbase endorses the asset, but that it meets Coinbase’s listing requirements.

4. Monitoring. We continuously monitor all assets on our exchange and may remove assets from the list if they no longer meet our requirements or if new information becomes available.

Excerpt from Coinbase blog post

This detailed process seems, at first glance, serious enough to prevent the listing of shitcoins. Nevertheless, Coinbase’s verification requirements remain quite vague, and the process for verifying creators and projects is neither explained nor discussed, although the listing platform claims that most tokens are rejected as a token of quality. Investors are therefore not immune to falling on a temporary or less serious project.

The democratization of cryptocurrency listing encourages scams

While Coinbase wishes to act in good faith, unfortunately, its verification process is not always efficient. Many scams have already been reported on the platform and two weeks ago the site faced a lot of accusations from the crypto sphere. The latter criticized him for listing far too many shitcoins on his platform.

This problem arose when some crypto analysts noticed the increasing number of high-risk tokens listed on the exchange. Hence, the community is wondering about Coinbase’s SEO policies and marketing strategies.

Excerpt from an article regarding the listing of shitcoins on Coinbase.

Source: Sam Callahan’s Twitter account

However, Coinbase is not the only player clumsily listing puppet tokens. Indeed, the ERC20 tokens of the Ethereum blockchain are the livelihood of unscrupulous creators and those who intend to make a fortune on the backs of naive investors in the form of ICOs. Very affordable, ERC20 tokens are easy to produce and, above all, very easy to trade since all crypto wallets supporting ether can accommodate them. Some sites are quick to list them without question and Uniswap is one of them.

UniSwap is a decentralized liquidity protocol on Ethereum that allows you to list any ERC20 token. Any token can be listed and sold. Each pair is managed by a Uniswap contract and anyone, including you, can become a “liquidity provider” for a pair by putting reserves into the pooled assets of the pair.

Excerpt from an article by Serge Baloyan, founder of the crypto agency X10, regarding the listing of tokens on Uniswap

Faced with the easy listing, you are your only weapon

Nowadays, it is very easy to create a token and list it without having to show a justification. Despite the verification of certain actors, it is still possible to fall into the trap. However, a few good habits can keep you from investing in the wrong coins.

You can, for example, take a look at the ETHProtect protection system created by Etherscan. This lists all illegal funds as well as addresses suspected of being fraudulent, in real-time.

Source: Nano Bank Twitter account

Finally, it is up to you to do the following research yourself before investing in a token, especially if it is an ERC20:

  • See if your token is listed on CoinMarketCap or CoinGecko, which remain trusted sources.
  • If your token is listed on several exchange sites, it has been seriously verified several times. If not, or if it is only offered on Uniswap, you may be dealing with a scam.
  • Look for your token on Etherscan and see if it is verified, as well as the reviews that have been posted about it.
  • Do a quick Google search and check the official website and social networks associated with your token. If these are very recent and seem to have been set up not long ago, you may be dealing with a scam. You can also search for the token address on Google. If the request is unsuccessful, you are probably dealing with a scam as well.
  • Check for blacklisted tokens on sites like DappRadar. The one you’re looking for may have been reported before.

Either way, never blindly invest in a token. Many tools are available on the internet to help you make your choice and see things more clearly .

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