CZ Suggests Safe Token Release Based on Price Growth

Story Highlights

• CZ proposes new token release model to prevent oversupply.

• Only 10% of tokens unlocked initially for project development.

• CZ clarifies: This is just an idea, not a new token launch.

Changpeng Zhao (CZ), the former CEO of Binance, has proposed a new way to release tokens. He wants to stop excessive new token minting during market price decreases. The initial 10% of tokens are used by him as the starting amount for project development. The remaining tokens should become available for release whenever prices demonstrate growth. The contract system would determine this procedure using a third-party keyholder.

CZ Proposes 10% Token Supply Rule for Project Launch

The 10% supply rate for tokens at project launch was introduced by CZ through his X social media platform. The token issuance process begins with unlocking and selling 10% of the total supply as per his guidelines. Proceeds from selling 10% of tokens would fund three priority areas, including project construction, promotion initiatives, and employment costs.

The rules for subsequent token unlocks consist of three specific conditions. The release of new tokens must wait for at least half a year after the previous unlocking schedule. The second requirement states that tokens need to maintain a price that exceeds twice the previous unlock rate for thirty consecutive days. The maximum unlockable tokens from total supply amount to 5% at any given time.

CZ Proposes Strict Unlock Rules to Prevent Oversupply

No new tokens are allowed for unlocking until the token price exceeds $2 for thirty days from starting at $1 in January. For example, upon the completion of the release period from July 4 to August 3 the token supply can increase by 5%. Token releases become possible in March of the following year only when the price maintains a value above $6 for thirty days.

Project teams retain control over token release timings and their amounts, yet 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 operates to limit harmful market effects from excessive token releases during price dips. The system will propel project teams toward aiming for extended business development. However, he made it clear that he is not launching a new token himself. He only shared this idea for discussion.