Issue tokens later for growth, not for initial fundraising, advises Binance chief Changpeng Zhao

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Web3 com­pa­nies should issue tokens to accel­er­ate growth, not to gath­er ini­tial funds, said Binance founder and chief exec­u­tive offi­cer (CEO) Chang­peng “CZ” Zhao at a fire­side chat at Korea Blockchain Week 2022 on Tuesday. 

See relat­ed arti­cle: Binance spent over US$1B on com­pli­ance, founder Chang­peng Zhao says

Fast facts

  • “When peo­ple come into Web3 and want to devel­op appli­ca­tions, projects or star­tups, they want to issue tokens right away. I advise against that,” said the Binance CEO who explained that estab­lish­ing prod­uct mar­ket fit should pre­cede token issuance.
  • “Once you issue a token, the token has a cer­tain util­i­ty. When­ev­er you change that, your token hold­ers get affect­ed. Either pos­i­tive­ly or neg­a­tive­ly, usu­al­ly neg­a­tive­ly,” said Zhao. 
  • “If you want to keep adding use cas­es, that’s great. But if you want to change the use case, you get a lot of com­plaints from the users,” added the head of Binance, the world’s largest cryp­tocur­ren­cy exchange by trad­ing volume.
  • Zhao also high­light­ed Binance’s con­tin­u­ous efforts to devel­op a glob­al know-your-cus­tomer (KYC) sys­tem regard­less of the advance­ments in KYC in dif­fer­ent jurisdictions.
  • “In some coun­tries [KYC] is very advanced, in some coun­tries it’s not. So we’re actu­al­ly build­ing solu­tions that [we can apply KYC] on a glob­al scale,” said Zhao, who added KYC is a strong tool to com­bat hackers.

See relat­ed arti­cle: Binance part­ners Mas­ter­card to launch card in Argenti­na for bill pay­ment, every­day purchases

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