Binance official says it’ll be good for the industry if the ICO bubble bursts
Ella Zhang, the Head of Binance Labs thinks the industry will benefit if the Initial Coin Offering (ICO) bubble bursts. While speaking to Bloomberg on June 4th she said that the stable inflow of users keeps the bull market positive. However, she adds that the ICO bubble needs to burst to open the industry to actually valuable projects.
Ella Zhang, though did not predict when the ICO bubble will actually burst. She said:
“We’d like the bubble to break. We still see a lot of hype in the market, valuations are high and unreasonable. We really think if the bubble bursts, it’s a good thing for the industry.”
She further added that she’s currently helping Binance in dealing with the scams with the so-called Cryptocurrency Governance Initiatives (CGI).The scams were the result of the hype surrounding the subject. The CGI’s purpose is to “fight scams and sh*t coins, and to boost crypto and Blockchain technology,” she adds.
Following the initiative, Binance will apparently back the funds and token teams that they’re working with. But it will be on the grounds that the teams guarantee that “they won’t participate in pump and dump” schemes. Additionally, the products will be built as specified in their white papers. In case teams do not honour this agreement, Binance will stop investing funds and delist their tokens.
Investing Binance Profits
Binance Labs is planning on investing $1 Billion of Binance profits in several Blockchain projects over the next few years. On an average, about $1 million to $10 million will be invested in each project. As part of the new venture capital fund, Binance is planning on collaborating with over 20 different cryptocurrency funds. All the projects that they invest in will have to join CGI and comply with the regulations. According to reports, the fund has made four investments in both companies’ tokens and equity to date.
Before she joined Binance, Ella Zhang worked with the venture firm, Kleiner Perkins Caufield & Byers as an investment director. She believes that since tokens and equity are valued differently, there can be a conflict when investing in them. She said,
“If we see founders contribute to both sides, we’ll hold both sides. Sometime it’s hard to see which one is more valuable, but our position is to support the founders and create value for the project as a whole.”
The whole ICO bubble bursting concept is nothing new and neither is Ella the first expert who’s predicted that it’ll burst. Robert Shiller, the Nobel laureate for economics said something similar about cryptocurrencies in April. He wrote,
“The cryptocurrencies are a statement of faith in a new community of entrepreneurial cosmopolitans who hold themselves above national governments, which are viewed as the drivers of a long train of inequality and war.”
The co-founder and executive chairman of Alibaba Group, Jack Ma also recently called Bitcoin a bubble.
Image via Twitter
Join our telegram group.