Binance founder Changpeng Zhao (CZ) has criticized the growing trend of reckless speculation in the cryptocurrency market, urging investors to back legitimate, long-term projects instead of chasing quick profits.
Taking to X (formerly Twitter), CZ highlighted how many investors are pouring vast sums into dubious projects, often losing their funds in the process. He warned that so-called “degens” – traders who engage in high-risk investments with little due diligence – frequently fall prey to rug pulls, liquidity drains, and exit scams, particularly in low-cap tokens and memecoins.
“In crypto, too much money is spent chasing small, quick gains,” CZ stated. “Focus on ethical teams that build for the long term. Big money is built slowly with stamina.”
While he did not name specific projects, his comments pointed toward teams with strong reputations and real-world utility. His stance aligns with regulatory concerns, as the U.S. Securities and Exchange Commission (SEC) has warned investors about the speculative nature of memecoins, noting that they are not considered securities.
CZ Proposes Tokenomics Model to Prevent Rug Pulls
Beyond advocating for responsible investment, CZ has also proposed a framework for crypto project tokenomics to reduce fraudulent activities. Under his plan, only 10% of a project’s tokens would be unlocked initially, with further token releases subject to strict conditions.
According to his model, issuers would unlock new tokens every six months, limiting each release to just 5% of the total supply. The process would be governed by smart contracts and managed by third parties to ensure compliance.
In a show of support for victims of recent crashes, CZ has helped raise over $1 million in cryptocurrency for investors affected by the failures of the BROCCOLI and TST memecoins. He also emphasized that AI-driven blockchain projects could benefit from L1 and L2 networks to enhance efficiency and decentralization.
As the crypto space continues to grapple with volatility and scams, CZ’s remarks serve as a reminder for investors to prioritize sustainability and credibility over speculative hype.
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