- CZ said, Only 10% is sold at TGE, with future unlocks requiring 6 months and a 2x price for 30 days.
- Market dumping is reduced through phased releases tied to consistent price performance.
- Teams can pause or reduce unlocks, with all tokens held by a third-party smart contract.
Binance CEO CZ has proposed a new token issuance model to support long-term project growth without halting market speculation and early sell-offs. In an X post, CZ shared his “idea” for tokenomics, with new tokens being limited in release under strict conditions.
CZ Suggested Tokenomics Model Works
Under this model, only 10% of the total supply of tokens would be unlocked and sold in the first instance on the market. Its proceeds would be used to finance the development, marketing, and salaries of the project.
Future unlocks would only happen if all of the following are fulfilled:
- Not less than six months must have passed since the last unlock.
- The token price must have been over 2x the previous unlock price for more than 30 consecutive days.
- No more than 5% of the total supply may be unlocked per time interval.
For example, if the token generation event (TGE) occurs in January at $1. Then no more tokens can be released unless the price increases to $2 and stays above it for 30 days. If this occurs on or before August 3. Then 5% additional tokens can be released into circulation. If it is already at a price of $3, the next unlock would then be March 3 of the next year. But only when the price is at $6 and has been there for 30 days.
Built-in Flexibility for Project Teams
Even if the system maintains a lockout schedule that is firm, project teams are also permitted to suspend or cut back unlocks if they are so needed. Conversely, they cannot increase the maximum percentage possible for unlocks or decrease the timescale.
In an attempt to pre-empt manipulation, all tokens are locked up in a smart contract, and with a third-party holding keys.
CZ’s strategy aims to prevent mass token sell-offs that flood the market and result in price collapses. By ensuring that new tokens only come into the market when prices are high.
This keeps new tokens from flooding the market during price downturns. It also gives the project team an incentive to build for the long term,” CZ said.
A Discussion, Not a Launch
CZ stressed that he has no plans to issue a new token himself. Instead, he presented this model as a thought experiment to be discussed in the crypto community.
With ongoing worries about unhealthy tokenomics and market manipulation, this model can serve as a blueprint for projects that desire sustainable growth and investor confidence. CZ’s idea has already sparked debate over how issuances of tokens will be structured in the future.
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