Binance founder Changpeng Zhao (CZ) has proposed a new approach to releasing crypto tokens, aiming to stabilize prices and promote long-term project success. Instead of dumping a huge amount of tokens onto the market at once, his idea involves a slow, controlled release.
How CZ’s Unlock System Works
CZ suggests that only 10% of a token’s total supply should be available at launch. This initial amount would cover project expenses like development, marketing, and salaries. The remaining 90% would be locked up and released gradually under specific conditions.
The Release Rules:
- Price Increase: Tokens unlock only if their price doubles compared to the previous unlock price and stays there for 30 days straight.
- Time Delay: There’s a six-month waiting period between each unlock.
- Limited Supply: Each unlock releases only 5% of the total supply.
This system aims to prevent sudden price crashes by carefully managing the token supply and tying releases to positive market performance.
Keeping Things Fair: Smart Contracts and Third-Party Control
To prevent manipulation, CZ proposes using smart contracts to hold the locked tokens. A third party, not the project team, would control these contracts, making it much harder for teams to artificially inflate the price or dump tokens for quick profits. Projects can delay or reduce token releases, but they can’t accelerate or increase them beyond the set limits.
Why This Matters for Crypto Investors
Uncontrolled token releases often lead to price drops, hurting early investors. CZ’s model tries to fix this by linking token releases to actual project success, making new projects less risky. This could build more trust and create a more stable market.
CZ’s Take and the Community Reaction
While CZ shared this idea, he’s not implementing it himself. He hopes it sparks a conversation within the crypto community. The response has been mixed, with some praising the idea as a way to prevent market crashes, while others question whether projects would accept such strict rules. If adopted, this could significantly change how new crypto projects launch tokens. It highlights CZ’s ongoing influence in the crypto world.
