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Bitcoinist 2025-03-03 12:30:16

CZ’s Fix For Crypto Chaos? New Token Model To Calm Crypto Volatility

Changpeng Zhao (CZ), the founder of Binance, has put out a strategy that might change the way new crypto enters the market. His strategy seeks to maintain stable token pricing while fostering long-term project success. This approach would employ a more controlled, gradual distribution of tokens based on price and time conditions rather than releasing massive amounts of tokens all at once. The Unlock System’s Operation According to CZ , during launch, only 10% of a token’s entire supply should be accessible. This small portion would fund platform growth, salaries, marketing, and development. The remaining 90% would be locked and be subject to rigorous limitations on their release date and method. A Crazy Idea for Token Issuance What if someone issues a token with the following tokenomics? Initially, 10% of the tokens are unlocked and sold on the market. The proceeds go to the project team to build out the product/platform, marketing, salaries, etc. Each future unlock… — CZ BNB (@cz_binance) March 1, 2025 Tokens will only unlock if their price doubles relative to the previous unlock price and remains at that level for 30 consecutive days. There would also be a six-month delay between each issuance to keep tokens from flooding the market too rapidly. Furthermore, each release would only account for 5% of the entire supply. These restrictions are intended to prevent unexpected price decreases while encouraging long-term growth. Who Controls The Locked Tokens? Smart contracts would hold the locked tokens to ensure fairness and avoid tampering. The keys would be in the hands of a third party rather than the project team. This design would make it more difficult for teams to manipulate the system and dump tokens for immediate rewards. While projects may delay or reduce token deliveries, they couldn’t speed them up or increase them beyond the predetermined limitations. Why Does This Matter For Crypto Investors? Token unlocking can have a significant impact on pricing. When too many tokens enter the market at once, prices can fall, frustrating early investors. CZ’s suggested method attempts to avoid this by regulating supply and correlating unlocks to performance. If implemented, it could help develop trust in new projects and lessen the risk of unexpected price drops. CZ’s Perspective On His Own Proposal Despite sharing this idea, CZ made it clear that he isn’t launching a token under this system himself. Instead, he hopes it will spark discussion in the crypto community. The reaction so far has been mixed, with some seeing it as a smart way to prevent market crashes, while others question whether projects would be willing to follow such strict rules. If this plan takes off, it might change how tokens are given out in the future. It’s another example of how CZ is still having an impact on the crypto world, even though he is no longer CEO of Binance. Featured image from Gemini Imagen, chart from TradingView

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