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.
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- “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.