Scroll Defends Binance Token Deal Amid User Backlash

Scroll, an Ethereum Layer-2 network, faced backlash after distributing its SCR governance tokens through Binance Launchpool. Many users expressed frustration, feeling that Scroll was favoring a centralized exchange over its community.

In defense, Scroll’s co-founder Ye Zhang stated that the decision was part of a broader strategy aimed at growth, and while the criticism was noted, it was essential for the network’s future. The crypto community raised concerns about the distribution, as Binance users received 5.5% of the token supply in just two days, compared to the 7% allocated to long-term mainnet participants.

The disparity in token allocation led to accusations that Scroll prioritized Binance over decentralization, disappointing some users. One commented that Scroll's decision felt like it was "kneeling to CEXs," referring to centralized exchanges.

Zhang acknowledged the controversy but defended the partnership, emphasizing the practical benefits of Binance. He explained that to compete with platforms like Tron, Scroll needed major exchange backing to provide essential on-ramps and off-ramps for stablecoins.

Zhang clarified that the tokens given to Binance were from the protocol's growth budget, not from community airdrops. He assured users that 15% of tokens are reserved for the community, with more airdrops planned. He compared this to Apple's app fees, saying that Binance's distribution power justifies the decision.

While some in the community were unhappy, Zhang expressed confidence in the long-term value of the partnership. He noted that other Layer-2 solutions, like Arbitrum and Base, had faced similar challenges and none had yet achieved widespread adoption. Finally, Zhang stressed that token distribution is a continuous process that helps with decentralization and governance. He expects token distribution to stabilize after an initial sell-off, and for loyal users to hold on to their tokens, ensuring the network's health moving forward.