Interview with Xiao Z: CEX Listing Expert's Business Insights | Conversation with KOL

Since October, getting listed on a CEX has become a new art. Whether it's ACT, PNUT, or MOODNEG, countless people have become wealthy overnight due to the listing of these new coins. Every batch of players who ambush these potentially listed coins eagerly holds their breath when the CEX announcement is made, hoping to be the lucky one.

However, in addition to early ambushes, there is another group of players, such as Little Z, who focus on studying CEX announcements, forming a "listing announcement trading" strategy. Little Z, relying on their understanding of CEX, not only successfully ambushed some potential listing targets (such as CAT MOODNEG), but also gained significant profits after CEX announcements were made (such as PEPE, ACT, OL). Therefore, Blockbeats specifically chatted with Little Z about the little-known announcement trading.

Blockbeats: Since when have you started paying attention to "listing announcement trading"?

Little Z: I entered the market in the previous bull run, which was around 2021, so I can be considered an experienced player who has gone through a full market cycle. In 2022, I saw an article by the founder of Formula on Zhihu and was inspired by Vida's article on Zhihu. I began to study CEX announcements. In fact, announcements present many opportunities, but they are often overlooked. For example, during the previous bull run, the listing effect of Binance and Coinbase was significant, and many people made profits by early ambushing. However, some people also rushed in immediately after the announcement and achieved results.

Moreover, during the 2021 bull market, there were not as many VC coins as in this bull market. For example, when some coins were listed on certain CEXs, they would have a market cap of several billion or tens of billions at the opening, but after listing, they only resulted in rug pulls. At that time, many coins had an initial market cap of only a few million or a few tens of million, and "listing announcement traders" could make substantial profits through early ambushes. Some smart money would exploit some announcement testing vulnerabilities, discover the vulnerabilities early, and ambush them. In this bull run, the listing effects of Upbit and Binance are also good, but it seems that there are not many people paying attention in the Chinese community. I think this track is still relatively untapped, so later on, I started studying content in this area. However, the gameplay of this bull run is very different from the previous one. The listing effect of Coinbase is not as strong in this bull run, and there are very few small-cap projects listed on exchanges.

Blockbeats: Can you give some examples of testing vulnerabilities? And how does smart money discover these vulnerabilities?

Little Z: I will give a few relatively simple examples of vulnerabilities. The first vulnerability is engineer negligence. Let's take a certain CEX as an example, where the CEX has not only a main website but also different announcement websites. For example, if they are about to release some listing announcements, they will publish them on the announcement website. Consequently, there are many interfaces on different websites, and sometimes developers or test engineers may overlook certain aspects. For instance, they may have expected to release a news announcement at 10 PM, but the information was leaked early on the backend at 9:50 PM, and then a formal announcement was made 10 minutes later. This is a common vulnerability.

Another example is the vulnerability of a test engineer. For instance, a CEX's test engineer may like to repeatedly test coins on the same wallet for a particular chain. For example, if a CEX needs to test a Solana chain's Token B, and the engineer also tested Token A last time. So, this wallet may be the one the test engineer has been using. Therefore, some experts on the chain may capture these test wallets to obtain potential listing information.

Blockbeats: How do you view the listing effect of this round of Coinbase? Why is it much worse compared to the previous round?

Xiaoz: Coinbase's performance in this round is indeed not as impressive, and the wealth effect is not as strong as in previous years. I think this is mainly due to regulatory reasons. However, there are still some coins with a good listing effect. For example, in the RWA sector, ONDO, which was initially listed on Coinbase, then rose by more than ten times. Another example is AERO. Aerodrome Finance is a DEX on Coinbase, and when it was listed earlier this year, its price was only 0.09. After listing, it started to rise continuously, reaching a high of 2.3 US dollars, about a 20-fold increase from the bottom. Of course, this is also due to their relatively low market cap after listing. For instance, AERO initially had a market cap of only $10 million, making it easier to rise.

In addition to the above low-market-cap coins, there are also opportunities with some high-market-cap coins that were listed, such as some meme coins. For example, PEPE surged 50% shortly after being listed on Coinbase. Of course, there are other factors at play here, such as Upbit and Robinhood. However, meme coins with higher market caps like WIF and FLOKI also saw a 30%+ increase after being listed on Coinbase. Overall, although there are still opportunities, this round of Coinbase listings may be relatively average due to regulatory reasons. However, this round of Coinbase's bull market has sparked a wave of innovation from the base. If Ethereum still has a chance, the only savior lies in the base ecosystem. Currently, all the interesting innovations in the Ethereum ecosystem, such as new concepts like AI pump.fun, have flourished on the base, while other L2 chains are essentially stagnant.

Blockbeats: What aspects are you currently researching the most regarding announcements?

Xiaoz: During the last bull market cycle, I was still a newbie and blindly researched various topics, such as leverage, contracts, and blockchain games. In fact, it wasn't until this cycle, from '23 to '24, that I started to focus on researching announcement-related information. My friend developed a program similar to Formula News for monitoring announcements, which can track more CEX announcement information. In addition to the leading CEX platforms, some second-tier CEXs are also being monitored.
After each CEX announcement, I will research to see if there are any opportunities. I study the content of the announcement and the news effect, and then continuously review. Later on, I gradually learned about news trading, or what is now more popularly referred to as fundamental trading. For example, everyone is familiar with Formula News, and through this kind of "news trading," many have made millions of dollars in profit on ACT. Of course, the Formula trading method requires some technology and is not suitable for everyone to apply this strategy. So I began to carefully study some manual trading opportunities, which are more friendly to players without much technology.

For example, there was a case of capitalization dispute with a16z's eliza before. In fact, the logic is the same as neiro's, but the latter launched on a top-tier CEX, so can it be replicated? I think not necessarily. Eliza also had controversies between the "community" and the "conspiracy group," with both sides fiercely fighting. At that time, ELIZA in uppercase was much more hyped than in lowercase, and many people, relying on neiro's previous logic, were pushing for the lowercase, resulting in many people being trapped. At the beginning of the dispute, I did not get involved and was observing. The defining moment of this event was when I saw in the HTX announcement that HTX would list in lowercase, which is why I started to get involved. This indicated that CEX supported lowercase tokens. The result indeed was that the lowercase ultimately surpassed the uppercase.
It's not just a few top-tier CEXs; each CEX's announcement conceals a key piece of information, but it needs to be analyzed in combination with specific hot topics, the overall environment, token fundamentals, etc., for a case-specific analysis.

Blockbeats: Can you introduce to us several more examples of "announcement trading"?

Little Z: Of course. For instance, there have been many opportunities in recent announcements on OKX. For example, the token OL had many opportunities. I bought it at a price of 0.025 and then sold it at 0.1, a opportunity that few people actually noticed. On November 18, OKX announced it would list the native token OL of Openloot for spot trading. The deposit opening time was at 2 pm that day, the auction time was from 8 pm to 9 pm on November 19, and the trading started at 9 pm. Most people stop at this point, or may not even bother to open the announcement. Let's look at the fundamental of Openloot. Openloot is an NFT trading platform for bigtime games, where users can use OL as a payment method when buying or renting, purchasing time crystals, or buying NFT from major sales. OL initially had only two billion tokens in circulation, out of a total of 50 billion, with an extremely low initial circulation rate. When the bigtime game token was initially listed, it had a very low opening price. However, bigtime initially restricted regions and did not allow Chinese trading; you could only trade through API orders or by depositing bigtime into the platform. Many people were unaware of this. It opened at 0.002 and rose by dozens of times the next day.
Therefore, after research, I believe OL has the same low-opening genes as bigtime. Furthermore, during the November 19 auction phase, OL's auction price was around 0.02 (eventually opening at around 0.025). Based on 0.02, OL's circulating market value was only $4 million. Even if you didn't buy cheap OL chips during the auction, but after the opening, OL still maintained a market value of around $10 million for a long time, the risk-reward ratio remained attractive.

Another example is the recent project Morpho. Although MORPHO's market cap is not as "cheap" as OL's, there is still an opportunity. First and foremost, it is important to research the project's fundamentals. MORPHO is a 21-year-old Defi project, similar to OL mentioned earlier, with a total supply of 10 billion tokens but only 1 billion tokens in circulation, resulting in a market cap of around $100 million. A $100 million market cap may not seem significant to most people in terms of risk-reward ratio. However, on November 21st, between 5:05-6:05 pm, MORPHO started a Dutch auction. The opening price of the Dutch auction soared to $4 at one point, although on-chain MORPHO initially traded at $1. After seeing the Dutch auction price, we had about an hour to withdraw from the chain and deposit into an exchange. Even with a slow withdrawal speed, there was still a 2-hour window after listing to arbitrage the price difference.

Therefore, the key is to research CEX announcements, explore announcements from all CEXs, and look for opportunities that are not easily noticed.

Blockbeats: After seeing each exchange's announcement, what strategy do you employ?

Little Z: You need to look at different types of exchange announcements. Some reflect the timeframe, such as the example of OL's listing announcement mentioned earlier, which was released two days in advance. You can utilize these two days to thoroughly research the coin's fundamentals and information. For instance, is the initial circulating supply dominated by whales, or what is the cost for early participants? How much of the initial circulating supply is locked up? How much is actually in circulation for sale? How much in circulation does each exchange have? These types of announcements provide ample time for research.

Another type of announcement does not provide time for research, and you need to prepare in advance to ambush. For example, the coin ACT listed on BN, when you see this announcement, immediately look at its fundamentals, such as market cap, liquidity, etc. Then, based on your own strategy, quickly make a purchase. The spot market's benefit is usually far greater than that of futures. When you see the ACT market cap is only a few tens of millions, you should buy immediately because the risk-reward ratio is very attractive. A listed asset in the tens of millions can be considered very cost-effective. Also, engage in more post-event analysis. For example, why invest in these coins, and what are the fundamentals of these coins? What strategy should I adopt next time I encounter a similar situation? However, for sudden announcements, you need to rely on your speed. Some individuals have earned a lot through news events, such as Formula News. After the ACT event, I believe everyone has gradually begun to understand their trading methods. Some even follow their addresses specifically.

In addition to spot listing announcements like ACT, there are also contract listing announcements. Usually, we consider the listing effect of spot trading to be much greater than that of contract trading. For example, before being listed on an exchange, MOODENG had a market value of only 60 million, and it experienced a prolonged period of decline and consolidation. Although this token was only available for trading through contracts, its market value was relatively low, and the fundamental factors of the project were very strong at that time. Even with only a contract listing, there was a strong listing effect. Buying MOODNE based on its market value at that time may have resulted in a maximum possible loss of 50%. However, once it is listed on Binance Spot Trading, it is estimated to have a price increase of 3-5 times, making the risk-reward ratio quite favorable. This kind of strategy can be successful, but if a token's market value has already reached five or six billion, then it may not be suitable to engage in activities such as pre-positioning.

Blockbeats: How do you view projects from other ecosystems? For example, the recently popular Desci concept.

Little Z: The Desci narrative actually began to emerge in 2022, but it was during a bear market. At that time, the market had low liquidity, so this concept did not gain much traction. During the bear market from 2022 to 2023, the founder of Coinbase invested in a project called RSC, and he often promoted his project on social media. For a long time, there was no significant buzz around it, but suddenly, in December of last year, there was a surge of interest. It then remained quiet for a long time until this year when BN announced an investment in Bio, including some actions related to Desci by CZ and V God in Bangkok. I won't go into further detail on this here. It was these events that rekindled the interest in the Desci concept this year. Desci is definitely a quite impressive narrative, but the narrative was pushed by the "top players" rather than naturally emerging from the community. It's hard to predict the sustainability of a concept that is heavily promoted in this way.

For instance, some concepts led by Coinbase, Depin. The entire landscape of Depin is now relatively quiet, and you will mostly see discussions around "meme" and "AI", with very few conversations about Depin. At one point, Coinbase listed many Depin tokens, such as MOBILE HONEY, and later BN also followed suit by listing IO. However, the market does not always support concepts that are heavily promoted, as we have already seen. The Desci concept falls into this category as well. Therefore, I believe that for Desci, everyone needs to conduct thorough research, be vigilant, and be adaptable.

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