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Polkadot founder Gavin Wood called exchanges that listed DOT tokens as “unscrupulous” as they were unlocked. He is confident that in this way they put the community at risk due to the upcoming denomination of the asset.
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
Binance and Kraken sparked Wood’s displeasure. Both of these exchanges added to listing DOT tokens two days before the scheduled denominations.
According to the head of Polkadot, the one behind the development of the Web3 Foundation is exploring all available security options.
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 denomination, each current DOT token will be divided into 100 new ones. The project management expressed concern that due to the hasty listing on exchanges, the market value of DOT on such exchanges would be 100 times lower than the actual one.
These fears were confirmed. In comments DeCrypt Polkadot representatives noted that DOT holders in a panic could get rid of tokens due to a possible collapse of the exchange rate by 90%. They emphasized that the actions of the exchanges demonstrate a growing gap between the interests of community-oriented projects and large trading platforms.
Some community representatives confirmed a lack of transparency regarding the upcoming denomination, which could lead to erroneous actions of traders.
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 from OTC platforms. To give the ecosystem a chance to prepare for the upgrade, it was decided that the denomination change would occur approximately 72 hours after DOT transactions became possible.
The agreed waiting period started on Tuesday, August 18, with listings scheduled to begin on Friday, August 21. However, Kraken and Binance added DOT using the new denomination before the actual changes took place. This led to price flows indicating a drop in the value of the token by about 90%.
In a letter to the community, Polkadot representatives complained that after transmission to control the protocol to validators, the project does not have many opportunities “to hold third parties accountable.” Polkadot believes that Binance and Kraken “went against the community and created chaos and confusion among DOT holders.”
A Kraken spokesman told the publication that the exchange was acting in the best interest of customers. No comments have been received from Binance at the time of writing.
As a reminder, at the end of July, the Web3 Foundation held another private DOT token sale, raising $ 43.6 million.
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