Changpeng Zhao (CZ), the founder of Binance, highlighted the risks faced by short-term profit-seeking investors in the cryptocurrency market. He emphasized that “degen” investors, who are drawn to low-value tokens and meme-themed coins, are experiencing significant losses. CZ pointed out that focusing on long-term and robust projects is a more sustainable approach and proposed new regulations regarding token distribution processes.
Long-Term Strategy Recommendations for Investors
CZ advised investors to research and choose reliable projects instead of chasing quick gains. He noted that the frequent occurrences of “rug pulls” and liquidity issues in the crypto market arise from uncontrolled risk-taking. He also stated that weak projects can rapidly lead investors to significant losses.
CZ remarked, “Excessive resources are spent for small gains in the crypto market. Strong teams behind long-term projects provide more stable returns over time.” These statements underscored the reality that uninformed actions by investors contribute to market volatility.
Proposals for New Token Distribution Regulations
CZ proposed fundamental changes to the processes of token launches. Under his suggestion, projects would initially make only 10% of tokens accessible, with the remaining 90% released in stages upon meeting specific conditions. This model is expected to reduce sudden value drops and speculative movements.
His recommendations also include locking tokens with smart contracts and subjecting them to third-party audits. This would help prevent investors from being harmed by project teams. Zhao argued that these regulations would boost confidence in the market and support healthy growth.
CZ mentioned a relief campaign initiated by Binance for investors affected by the memecoin crashes. It was reported that hundreds of thousands of dollars raised would be allocated to projects focused on transparency and sustainability.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.