CZ, the founder of Binance, recently
shared a new token issuance mechanism aimed at controlling market supply through price thresholds and time limits, reducing selling pressure and encouraging project teams to focus on long-term development. He emphasized that this model is not a panacea, but may be more advantageous than the current fixed unlock schedule, and revealed that he may support some projects adopting this mechanism, triggering a new round of discussion in the market on token economic models.
Price-driven Token Unlock Mechanism
According to CZ's design, project parties will initially unlock and release 10% of the tokens to the market during the initial token issuance, with the funds raised used for product development, marketing, and payroll. However, future token unlocks will be subject to strict conditions, including at least a six-month interval, the price must reach twice the previous unlock price and remain stable for 30 days, and the single unlock ratio cannot exceed 5%.
Flexibility and Limitations of Project Teams
This mechanism gives project teams a certain degree of flexibility, as they can choose to delay or reduce the unlock amount to reduce market selling pressure. However, to prevent artificial manipulation, teams cannot shorten the unlock cycle or increase the single unlock amount. In addition, the tokens will be locked by smart contracts and the unlock permission will be controlled by a third party to ensure the transparency and fairness of the mechanism.
CZ: The Model Cannot Solve All Problems
While this unlock mechanism has a certain market control effect, CZ also admitted that no token model can solve all problems. He pointed out that even with the adoption of this mechanism, there is still the possibility of project parties cashing out the initial 10% of tokens and fleeing. In addition, projects may still face the risk of failure at different stages of development, so the design of the token economic model is not the only key to success.
Some Projects May Receive CZ's Support
Although this model is still in the discussion stage, CZ revealed that some projects may try this mechanism, and he personally may support some of them, but not all projects adopting this model will automatically receive his support. He believes that this mechanism has certain advantages over the current fixed unlock schedule, or at least can bring different market impacts. He said he will continue to observe the actual application of this model and market response, to see if it can become a new trend in token issuance.
More Like Stocks or Traditional Crypto Unlock Mechanisms?
CZ's proposal has similarities with the stock market in terms of "long-term incentives" and "avoiding market selling pressure", especially in the management of stock options and additional issuance mechanisms. However, it still retains the unique characteristics of the cryptocurrency market, such as price thresholds and smart contract-based lock-up mechanisms, which are not present in the traditional stock market.
If to be analogized, this mechanism is more akin to the equity distribution of venture capital (VC) funds to startups. When VC invests, founders usually need to meet certain financial or market growth indicators to obtain the next round of funding support, rather than receiving all the funds at once.
Therefore, this mechanism has some similarities with the stock market, but it is still an innovative unlock mechanism in the cryptocurrency market, especially compared to the traditional fixed unlock schedule token model, it provides a price-oriented unlock approach.
