ZB.com pioneers an AMA in 5 languages — Why does ZB.com burn 1.4 billion ZB Tokens?
At 20:00 on February 15th, the 60th Mars Editor’s Moment was held between ZB.com and Mars Finance’s communities.
There are 43 ZB WeChat communities, 340+ APP communities and other cooperative communities, including Coingecko, Milin Finance, dooridoori, etc. Winpro Yan, partner and the chief editor of Mars Finance talked with Omar Chen, CEO of ZB.com.
The topic of this AMA was “Why does ZB.com, which is one of the Top 5 platform tokens of CMC’s annual report, burn 1.4 billion tokens?”
The AMA live broadcast attracted attention from investors in the five major global language areas, including Chinese, English, Korean, Russian and Bahasa Malayu.
The following is the full transcript of the dialogue:
Host：Compared to other major platforms, ZB has always given the outside world a low-key and robust. Omar, as the co-founder of ZBG and former CEO, the current CEO of ZB.com, also seems too rarely show up in public in the crypto space. Before we will start to ask our questions, let’s invite Omar to introduce himself.
Omar：Hi everyone, I am Omar from ZB.com, and I used to work at ZBG. I majored in Computer Science. After I have got a master degree, I worked as a computer programmer in Ericsson and then worked overseas for 10 years at Huawei. I also did a short period of traditional VC/PE. Last two years I have led the growth of ZBG and seen how this exchange went from 0 to 1 to become one of the world’s top 10. Today, I am honored to participate in the AMA of the Chinese blockchain media, the editor-in-chief of Mars Finance.
Host: You has been cultivating overseas in Huawei for ten years. What is the opportunity to make you join the blockchain and create ZBG? Looking back over the past few years, how have your perceptions of the industry changed during the ZBG and ZB.com operations? What is the greatest feeling?
Omar：When I was working in Huawei, I spent 10 consecutive Chinese New Year holidays in different regions overseas, staying in Middle East and North Africa, Europe, Southeast Asia and other places. After returning to China I have obtained fund qualifications, I did a short period of VC/PE entrepreneurship. However, I found that traditional companies need multiple rounds of fundraising to go public, and the blockchain industry at that time was in a big bull market. Especially in the second half of 2017, when many enterprises successfully raised funds with the help of blockchain, I found that blockchain technology can efficiently help many physical enterprises to develop, so I have decided to join the blockchain industry. By chance, I encountered ZB, carried out groundbreaking ZBG work, and worked with the team to witness the rapid development of ZBG.
Earlier that year, ZB added the strategic investment into two independent platforms, ZBG and BW. As a replacement, I was also arranged to take charge of the ZB.com sub-brand platform — ZBG.
From ZBG to ZB, the operation of two different platforms is actually like two stages from 0 to 100 and 100 to 10,000. ZBG is a platform focusing on innovative currencies, and ZB is a platform focusing on mainstream currencies. The user attributes of these two platforms are very different, and the way they serve customers may also be different. But our trading platform is essentially a service industry, which provides high-quality transaction services to blockchain enthusiasts around the world, and is more like an Internet-like portal.
As for the biggest feeling, it is very tiring in this business. It is really not easy to provide 7 * 24 hours of continuous service. So, I would like to thank the ZBG team for their hard work and for becoming Top-10 in just one year. I also wish them to do better and better, and keep up with Binance. At the same time, I also thank the ZB team, which is as stable as Coinbase, and has been able to provide quality services to millions of users for the past 7 years.
Host: On February 10, ZB.com’s official website announced that the total amount of ZB tockens at the time of issuance was 2.1 billion. So far, a total of 1.4 billion have been permanently burned. The proportion of ZB tokens burned is as high as 66.67%. According to the original setting, the team held 293 million in the early days, but this year suddenly announced that it would be completely burned. Why did the team make such a decision? How does the whole process works?
Omar：Everyone only sees burned without talking about repurchases. It is actually a misunderstanding. A reasonable model is to calculate the price-earnings ratio based on the repurchasing strength of the tokens circulating in the market. ZB is the mainstream platform with the largest repurchase intensity. We can see that since the launch of ZB, we have repurchased a total of 269 million. Among them, 145 million ZB were repurchased in 2019, and the circulation as of the last repurchase announcement (December 7, 2019) was 468 million. Therefore, the total number of repurchases accounts for 57% of the total circulation. If we follow the repurchase efforts in 2019, the total circulation of the secondary market is 468 million / 145 million, the entire repurchase can be completed in only 3.2 years. This is equivalent to allowing investors holding ZB to enjoy the dividends brought by token deflation, and the return on investment is guaranteed.
After explaining the key points, it will be easier for me to answer your questions, and continue to serve customers, aiming to protect the rights and interests of ZB users. Because of this, we will additionally burn all parts of the ZB team to escort for the next 3.2 years. The process is also very simple. We judge that the current halving market has been started, so that everyone can better understand the strength and original intention of the platform. We have also prepared a long time for repurchases.
However, with the development of business, we have formed a clearer understanding and planning of ZB’s ecological construction. At the same time, we also want to make a small contribution to the platform currency market, so we also chose OKEX, which is as good as the technology, and announced it on the same day. It may seem like a short process, but ZB actually was preparing for that for a long time, but just happened to choose this time.
Host: Recently, the performance of major platform coins and the stimulus of the destruction announcement seems to be the first to open a small bull market. ZB also did not fall in this round of market. What are the reasons for the recent ZB platform currency surge? If a new round of market starts, will many platforms announce the destruction of platform coins this time as a catalyst?
Omar：ZB’s performance in this round of market is really good. Since ZB has not been promoted consistently, domestic users may not know that ZB is one of the top exchange tokens selected in the “CoinMarketCap 2019 Annual Summary”. CMC selected the platform tokens of 4 top established exchanges, and one of the emerging derivatives platform coins as the report.
After understanding this, you can find that the factors of the ZB platform currency increase are caused by several factors: First, just like the CMC report more than a month ago, more and more users understand the value of ZB and form a consensus. Second, the announcement of repurchase and destruction came out in advance, which may also stimulate the willingness of more domestic and overseas users to invest in ZB in advance. Third is the recent halving of the market. Some investors will consider using high-quality platform currency as a core asset allocation. Fourth is our continuous repurchase.
For many trading platforms announcing the destruction of platform tokens, I personally think that this matter can be seen on two sides. The platform token is actually only a tool to assist the platform. It is not a platform for issuing platform tokens. Essentially, the platform needs to be done well to make the platform tokens valuable. Therefore, only the old platforms with good business operations can do this, for the new platform it does not make much sense. In other words, the linkage of large platforms can really catalyze this. After all, platform tokens are similar to the securities market in the traditional market and are a sign of bullishness.
Host: In your opinion, what is the core value of exchange platform tokens?
Omar：The core value of platform tokens is reflected by forming more user needs and making the application scenarios of platform tokens richer. The value support of ZB tokens comes from: empowerment of ecological construction, expansion of trading channels, and deflation model construction based on ZB tokens repurchase and destruction.
The deflation mechanism of ZB token includes：
1. 100% of ZB tokens from UP token sale will be burned;
2. 25% of the currency transaction fee is repurchased by ZB and burned.
3. ZB tokens earned by voting for listing.
Host: From the perspective of the entire industry, in addition to adopting a deflation mechanism in enabling platform coins, major trading platforms continue to expand application scenarios. From the announcement of ZB, ZB tokens will also be used in more scenarios. Can you specifically introduce the current use scenarios of ZB tokens? In your opinion, what other application scenarios for platform coins are worth developing in the future? What is the value growth space reflected in?
Omar：At present, ZB tokens have been implemented in the fields of payment, transaction, financial services, loan management, network security, leisure and entertainment.
In terms of platform applications, ZB tokens have been applied in the following areas：Deduct transaction fees (50% off), purchase ZB VIP membership, participate in the subscription of high-quality project UP quotas, pay market maker service fees, serve as OTC certified merchant deposits, and be used in community voting and listing.
ZB has been continuing to deepen its ecological construction work around the ZB ecology and open up more application scenarios for ZB tokens. At present, ZB.com also starts from these two points. The first is to destroy the ZB team’s tokens and let the ZB points enter the absolute deflation stage. The second is currently created ZAPP incubator application ecological platform, allowing multiple applications to access, guiding users to participate in various services, sharing the growth rights of the platform and continuously expanding the application of ZB tokens.
ZB team has always focused on business and product innovations. In the future, the application scenarios of ZB points will also come from these new products and functions. ZB is currently creating a ZAPP (similar to the APP STORE) innovatively, making the future application scenarios of platform coins more diversified. Through the access of third-party applications, combined with the third-party industry applications, continuous innovation and integration of assets in the chain. The scenarios for ZB applications continue to widen. Such as games, malls, live broadcast, finance, medical, etc. At present, a common transportation query tool for patients with pneumonia has been launched. We believe that the blockchain industry is constantly improving and innovating. In the process, a large number of innovative and good products will be also emerged. As long as we can make more and better products, the value growth space of ZB will be greater.
Host: From an operational perspective, previous major exchanges have made a lot of changes at the level of IEO, Staking, and partner models, which have stimulated incremental users and capital entry. But at the same time, it also attracted a lot of questions, such as scam. In your opinion, how should trading platforms formulate operating strategies? What rules does ZB follow during operations?
Omar：As a leading exchange that has been operating for 7 years, it has been able to develop steadily until now. Its fundamental strategy is based on the user experience and adhere to the principle of service first. In the fierce market competition, adhere to the original intention, and the operating strategy must to be able to follow “ do not obey blindly”. Strategies can’t be just for the heat, but for the real benefit of the user.
Operations cannot be separated from innovations, but innovations also should be about “win-win”. As an established exchange, it is precisely because we always adhere to this point that we can now have international influence.
Our operation follows that we will serve our different types of customers with a neutral third party and customer-centricity.
Host: Compared with Binance, Huobi, and OKEx, although the number of listings is less, it still ranks among the top five in CMC’s liquidity trading list. Seeing the strong asset strength of the platform, what strategies does ZB have in terms of project selection and listing? How to ensure the liquidity of digital assets in ZB?
Omar：ZB.com has relatively few listed, but the liquidity is good. I think this is due to our core idea of listing, not too many currencies, but quality over quantity. In terms of listing, we evaluate projects based on multiple dimensions, including technological innovations, community activity, global influence, and team strength. We will make full adjustments to the project and comprehensively evaluate the project. Projects with high influence, broad user base and better liquidity are preferred.
ZB is the earliest mainstream exchange that listed on Ethereum and EOS. We have always supported innovative projects and have also taken the lead that listed currencies including QTUM, HSR, BTS and XRP with great potential for growth. Facts also proved that during 2016–2018, ETH rose from 30 yuan to 11,000 yuan, EOS rose from 6 yuan to 140 yuan, BTS rose from 0.5 yuan to 3 yuan, and XRP rose from 1.25 yuan to 24 yuan. In these markets, ZB.com users are making real money.
In addition, ZB has introduced preferential policies for the market maker program from the early days, and has cooperated with many institutions and individual market maker users, such as giving preferential VIP grade rates to increase liquidity.
Host: Since 2019, battles between many trading platforms have been escalating, such as involving currency transactions and contract business and so on. In the increasingly fierce market competition, what levels will ZB focus on in 2020? What is ZB biggest advantage in participating in the global market competition process?
Omar：At the end of 2019, ZB integrated the first real-time chat community tool into the trading platform, which greatly increased user viscosity and greatly improved the user experience. In order to continue to improve security, we are currently providing more security settings for institutional users, such as setting restrictions on the establishment of trading pairs for transactions and so on.
This year we will be focused on ZB’s ecological construction and user experience. First, strengthen international cooperation and globalization, and deepen the Southeast Asian market. Multi-language versions are added to cultivate localized operations. Second, continue to optimize our own products, continuously iteratively update, expand ZAPP product incubator applications, and provide the industry with high-quality blockchain infrastructure. Third, serve customers well, aiming to protect users’ rights and interests, and strictly control project risk control. Fourth, responding to user demands in a timely manner, giving users a more convenient and efficient transaction experience; removing or hiding inactive currencies, and eliminating the last place.
Through the in-depth study and systematic control of the industry segmentation market, providing products, solutions and all-round services that are close to the needs of users is the development goal of ZB.com since its establishment, which has been practically implemented in every step.
At present, ZB has accumulated 7 years of experience in stable and secure operations. All members of the team’s senior management have come from Huawei, ZTE, Wachovia, Lenovo and other international companies. Not only our actual technical support and landing application support, but also our community background and users support have formed our core competitiveness.
Host: In May this year, BTC is about to usher in another halving, which is good for the entire crypto market. Not only that, mainstream assets such as BCH and ETC will also reduce theirs’ production. Hence, the market is generally optimistic about the market trend this year. As a front-line practitioner who has experience in bull and bear markets, what do you think of the market this year? What are the expectations for the crypto market in 2020?
Omar：There will be definitely a halving of the market. I remember that I said in an AMA last year that there will be a sharp rise in the history of Bitcoin every half year before and after halving, and the number of users in the currency circle has increased significantly, which has almost become an inertia. I believe this time will be no exception. Because Bitcoin is currently the most successful blockchain application and the consensus engine of the entire coin circle. As you can see from the historical chart, the first halving was 25 BTC every 10 minutes on November 28, 2012, and the second halving was 12.5 BTC on July 10, 2016, and the second halving was 6.25 BTC in May 2020.
In fact, the significance of Bitcoin’s asset allocation is gradually being discovered. With the frequent occurrence of various events such as Brexit and China’s new virus epidemic, Bitcoin’s hedging properties are hotly debated. As an alternative asset, Bitcoin is sometimes seen by markets as inflation-proof and safe-haven as gold. It is expected that the crypto market will attract more traditional investors in 2020. The crypto market may be a new investment target for traditional investors.