Binance's CZ Calls for End to "Degen" Culture, Proposes New Tokenomics Model
1min read Binance founder Changpeng Zhao, commonly known as cz, has recently criticized the "degen" culture prevalent in cryptocurrency investing. He urged investors to shift their focus from chasing quick gains to supporting projects with long-term potential and real utility. This call to action comes in the wake of several high-profile rug pulls and exit scams that have resulted in significant investor losses.
CZ highlighted the issue of investors pouring large sums of money into highly speculative assets without conducting thorough research. He emphasized that the crypto space is riddled with individuals, known as "degens," who take high risks by investing in low-cap tokens and memecoins in the hope of quick returns. This behavior, according to CZ, is detrimental to the long-term health of the crypto ecosystem.
To address these concerns, CZ proposed a new tokenomics model designed to reduce the risk of rug pulls. The model includes strict vesting schedules for new crypto projects, where only 10% of tokens would be unlocked initially. The remaining 90% would be subject to specific conditions before release, with 5% of tokens unlocked every six months. Smart contracts would control this vesting schedule, and third parties would hold the keys to prevent manipulation. This approach aims to ensure that project founders remain committed to their projects, incentivizing them to work towards long-term success rather than short-term profits.
CZ's proposal is a response to the growing number of rug pulls and exit scams in the crypto space. These schemes often involve project creators abandoning their projects after raising funds, leaving investors with worthless tokens. By implementing strict vesting schedules, CZ hopes to create a more secure and sustainable environment for crypto investors.
In addition to his proposal, CZ has shown practical support for those affected by crypto scams. He has helped raise over $1 million for victims of the BROCCOLI and tst memecoin crashes. This support underscores his commitment to promoting ethical practices in the crypto space and protecting investors from fraudulent activities.
CZ's comments reflect a broader concern within the crypto community about investment practices. As the market has seen increased volatility, calls for more responsible investing have become louder. The warnings from such a major figure in the industry serve as a reminder that sustainable growth in the crypto space requires moving beyond the "get-rich-quick" mentality that has dominated parts of the industry.
