Binance's CZ Proposes Token Release Model to Combat Oversupply

Binance's former CEO, Changpeng Zhao (CZ), has proposed a novel token release model aimed at preventing oversupply and mitigating the impact of excessive new token minting during market price decreases. The proposed system, which CZ clarified is merely an idea and not a new token launch, suggests that only 10% of tokens are initially unlocked for project development.

CZ's proposal outlines a structured approach to token issuance, with the initial 10% of tokens being used to fund project construction, promotion initiatives, and employment costs. The subsequent token unlocks are governed by three specific conditions: a minimum of six months must pass between unlocking schedules, the token price must exceed twice the previous unlock rate for thirty consecutive days, and the maximum unlockable tokens from the total supply amount to 5% at any given time.

The proposed system also includes strict rules for token release timings and quantities, with project teams retaining control over these aspects. However, they cannot accelerate unlocking schedules nor access higher quantity releases. Smart contracts will manage token locking, while a third party controls this procedure. The CZ token system is designed to limit harmful market effects from excessive token releases during price dips and encourage project teams to focus on extended business development.