TL;DR
Abu Dhabi strategic investment:
Binance chose Abu Dhabi because of its regulatory framework and strategic positioning, not its funding needs. The UAEs compliance environment provides Binance with a key fulcrum for global development.
Meme coin ecosystem:
Meme coins reflect the creativity of the community, but their high-risk attributes are significant.
Binance supports innovation, but needs to balance user education and risk warnings.
Trumps coin issuance: Most celebrity tokens are created by third parties to attract attention. Public figures should focus on long-term value projects.
Binance listing strategy:
Binance cannot become a place for big players to reap profits. It is not recommended that the exchange act as a screener. We are optimistic that decentralized exchanges (DEX) will become the mainstream in the future.
It is recommended that the project party disclose the lock-up mechanism and adopt third-party smart contracts to enhance transparency.
Industry Development:
From issuing coins requires building a chain to the ERC-20 standard, the technical threshold has been lowered but the core logic has not changed (community consensus is value).
The industry needs to break through financial speculation and explore practical applications such as government identity authentication and DeSci.
Ethereum and L2:
Missed the Ethereum investment, but affirmed its foundational role in DeFi.
Ethereum’s current bottleneck is insufficient innovation at the application layer, not a technical issue.
Prison Experience:
Four months in prison reshaped my life priorities and made me realize the importance of family and health.
I lost 6 kg in weight but am healthier. The mental stress comes from uncertainty.
Educational Project Giggle Academic:
Aims to address global education inequality through gamified learning and develop skills that enhance employment (such as AI data annotation).
Future layout:
Investment direction: Focus on three major areas: Web3 infrastructure, AI, and DeSci (decentralized science).
Vision: Support thousands of entrepreneurs, create sustainable unicorn projects, and reshape the industry landscape.
In 2013, a 36-year-old entrepreneur came to Las Vegas, where he met a 19-year-old youth. The two were very different in age, but unlike the gamblers who came here to seek excitement and wealth, the older man saw a pure geek spirit in the eyes of the 19-year-old youth, and he knew he had come to the right place.
A month later, he sold his house in Shanghai and used all the proceeds to buy Bitcoin, a move that was puzzled and opposed by people around him. Not long after, the price of Bitcoin began to plummet, while Shanghais housing prices ushered in a new round of soaring, which made his behavior seem very stupid at the time.
However, he became good friends with the plain-looking young man, who was like a backpacker and lived in his home, sharing a bunk bed with his son and teaching him what a smart contract is. That was when their fate began to change dramatically.
Later, the young man founded a blockchain network worth over $200 billion, Ethereum. And he founded the worlds largest cryptocurrency exchange, Binance. The names of these two protagonists are Vitalik and Changpeng Zhao.
Zhao Changpeng has many labels and identities. People prefer to call him CZ. As the founder and largest shareholder of Binance, he was once named the richest Chinese by Chinese media, but he denied it. In the crypto community, he is the first crypto KOL with more than 10 million Twitter followers. Young people who love Meme prefer to call him Cousin. Like those crazy entrepreneurs, his life is not smooth sailing. In 2024, he spent a long 4 months in a US prison. That was his darkest moment.
Recently, Foresight News had a conversation with one of the most important figures in the crypto space, and he told Foresight News that before the interview, he was still discussing biotechnology with Vitalik. 12 years later, the lives of both have changed dramatically, but the natural connection between humans seems to have never changed.
The following is the full text after editing:
Foresight News: Recently, Abu Dhabis investment institution MGX (established in 2024 and closely related to the Abu Dhabi government and royal family) invested $2 billion in Binance, which is the largest single financing in the crypto field to date. Why did Binance choose to establish a strategic partnership with Abu Dhabis investment institution?
Changpeng Zhao: Yes, this is a strategic investment. In fact, Binance is not short of money, and Binance’s growth has never been limited by funds.
When accepting this type of investment, we must consider strategic help. At present, the United Arab Emirates, where Abu Dhabi is located, has a high strategic significance in terms of compliance and regulatory terms and government support for the entire digital currency industry. It is true that other state-owned funds or investment institutions have approached us for negotiations, but we generally only choose partners with strategic significance.
Foresight News: You have been very active on X recently, which is different from your image in the previous cycle. Regarding Meme coins, crypto leaders in the circle have different views. What do you think of the Meme trend?
Changpeng Zhao: There are several points. I have always interacted with others on the X platform, but I rarely interacted with the Meme Coin community before. In 2024, I was dealing with US-related affairs and paid less attention to the entire industry. I also had no Internet access for 4 months in between because I was in prison.
So I did interact less in the community during that period, but I had been interacting frequently before, and I personally like to communicate and learn with the community. Recently, I interacted with the Meme Coin community to understand what the Meme Coin ecosystem is like. I have never bought Meme coins myself, nor participated in the Tugou project. Because I have never been exposed to it, I want to understand it through interaction and asking questions.
They asked me if I had a pet. I guessed that someone behind the scenes might want to issue a coin with the name of a pet. I didnt object to this, so I posted my dogs name. As a result, everyone really issued a coin based on it, and a project similar to pet battle (PVP) was formed. I had never been involved in this kind of thing before, but after observing the community, I found it quite interesting. Later, everyone asked me to choose which coin was real, because there were several memes with the same name with a relatively large market value. But I didnt want to do this, because the several meme coins involved had a lot of users, and choosing one would definitely hurt the feelings of other users, so I didnt participate.
If there are new and interesting projects, I will interact with them. Apart from buying TST and Mubarak of BNB, I have never bought other Meme coins. Interacting with the community is a learning process for me, and everyone can see that I am learning. I think the Meme coin ecosystem is quite interesting, and now I have some understanding of it.
Foresight News: How have the current interactions on the Web3 chain, such as the gameplay related to Meme coins, changed the transaction experience and usage experience of blockchain compared to when you first came into contact with the Bitcoin white paper?
Changpeng Zhao: There are similarities and changes. Early digital currency enthusiasts all advocated freedom and decentralization. After the emergence of Bitcoin, to issue a new coin, you had to create a new chain, which required 20,000 lines of code. This was the case with Ethereum, Chinas Ant (later changed to NEO, and is not as popular as before), and so on.
Later, Ethereum launched the ERC 20 standard, which means that you no longer need to develop a new chain to issue coins, and you only need to write a smart contract. As a result, a wave of ICO projects emerged in 2017, and at that time you had to write at least a 10-page white paper and build a website.
Now it is even simpler, you can start a project by posting a picture. The threshold for issuing coins is getting lower and lower, the community is getting bigger and bigger, and the amount of funds is getting more and more sufficient. But the core logic is that as long as someone recognizes a concept to issue coins and someone participates, it will have a price, and if no one participates, there will be no price.
Of course, there are also many projects that are truly developing products and platforms. The current Meme coin culture is relatively unique and novel, and its rise is due to several factors.
First, people are somewhat dissatisfied with the traditional VC model. Traditional VCs invest in projects in the early stages and then exit after listing. The founders also sell their shares, and retail investors take over. In addition, the previous US government and the US Securities and Exchange Commission believed that many coins have securities attributes, while Meme Coin claimed that it had no practical use and was just fun, thus avoiding possible legal disputes.
In addition, many small retail investors want to use a small amount of money, such as 100-2000 US dollars, to change their lives by 10 times or 100 times. Combining these factors, Meme coin became popular. I think Meme coin is very risky and the price fluctuates significantly, but the advantage is that it is relatively open and transparent. I am not sure how long it will last, but since the community is so popular, we support it. My thinking mode has always been to see the direction of the community and then support it. At the same time, we will continue to support entrepreneurs and platforms that really have business models, income, and users. Although there have been changes in form, the core concept of the industry has not changed much over the years.
Foresight News: Even Trump is involved in the issuance of Meme coins. He is the first president in human history to issue Meme coins. What do you think of the president issuing coins?
Changpeng Zhao: As far as I know, this Trump coin was not necessarily issued by Trump himself. He does not have much actual connection with the issuance of the coin. It may be issued by a third party in his name. Although he has acquiesced to some extent, I am not very clear about the specific degree of involvement and interest connection. I have heard very little about it.
I think the subsequent issuance of coins by people like Melania and Miley may be exploited by others. If they themselves announced the issuance of coins, that would be one thing, but if someone else borrowed their names and asked them to help forward and promote, in this case, they may not know enough about the industry and be exploited.
I think influential people should be cautious when issuing coins. The coins they issue should have long-term value, long-term application scenarios, and bring long-term benefits. Now many stars and celebrities, especially retired ones, want to make a fortune from this. This mentality is understandable, but I think it is not a good idea. For influential people who are still in service, they should focus on issuing tokens with long-term use value.
Foresight News: As the worlds largest cryptocurrency exchange, Binance has always had a headache with listing coins. What do you think about the listing of VC coins and Meme coins?
Changpeng Zhao: Regarding the listing of VC coins and meme coins, from my perspective, after the exchange becomes larger, listing coins is a very complicated matter. As a Binance shareholder, I least want Binance to become a place where large investors cut retail investors leeks. This is not good for Binance users, Binance itself, and the entire industry.
But if we go to the other extreme and list coins with small market value too early, it is also not good. For example, if a coin has a market value of only 5 million US dollars, and Binance now has 250 million users, everyone will buy a little, and the price may be hyped up very high, and then fall again without support, forming a pin-in market, which is also not good.
Therefore, it is best to find a balance in the middle, and try to list the token as early as possible, but the token must have a sufficient market value to avoid being manipulated, and the holders must be dispersed and cannot be controlled by a few VCs or large investors. In addition, whether it is VCs or large investors, it is best to lock the position for a long time. It is recommended to use a third-party lock-up solution instead of the project party controlling the smart contract itself. We recently invested in a company called Sign, which is a third-party lock-up solution controlled by smart contracts.
Of course, if the project founder is very capable, the product has a large number of users, and is unwilling to adopt this model, we also need to make a trade-off.
Listing coins is indeed very complicated. I am not involved in Binances decision-making on listing coins, but I think some of their recent actions are quite interesting. In fact, I have written in my blog before that there should be no concept of listing coins. A platform with a large number of users should allow users to buy any coin in the blockchain world, whether on-chain or off-chain, and let users choose for themselves instead of being screened by the platform. I think this is the right direction. The blockchain industry should not have middlemen to help users make decisions. The platform only needs to provide access services. I said many years ago that decentralized exchanges will be larger than centralized exchanges in the future, and I think this will definitely happen.
Foresight News: As the largest shareholder of Binance, do you still believe that decentralized exchanges will be more important than centralized exchanges in the future?
Changpeng Zhao: I still think so.
Foresight News: You recently announced your investment portfolio on Binance Square, which includes 98.5% BNB, 1.32% BTC, and the rest is a 0.17% token airdropped to you by an early payment project. You have never held Ethereum, what is your holding philosophy? Why no other tokens?
Changpeng Zhao: What is displayed in Binance Square is my personal wallet. In fact, we have had some Ethereum at different times, but not at the level of investment. BNB was first issued based on the Ethereum ERC standard, so we will definitely use Ethereum.
But from a personal perspective, I completely missed the investment opportunity in Ethereum. I have known Vitalik (founder of Ethereum) since I entered the industry in 2013, when the industry was very small. We met many times in 2014 and attended exhibitions together.
In 2015, he went to Shanghai and originally wanted to live in my house. Because my house was small, I arranged for him to live at a friends house. Later, he went to Japan and lived in my house, slept on bunk beds with my son, and taught my son some blockchain-related knowledge.
In 2015, Ethereum was basically formed. When he told me about this project, I questioned it. I thought it was difficult to implement such complex functions on the blockchain using a Turing-complete language, so I never invested. Later, Ethereum increased by thousands of times, and I did miss an opportunity.
However, I have always had a good relationship with Vitalik, and this morning I talked to him about investment opportunities in the biomedical field.
Although I have not invested in Ethereum, I think Ethereum has made a great contribution to the industry. Ethereum is the reason for the ERC 20 standard and the subsequent series of projects. It is now the second largest coin in terms of market value. Although there are some problems at present, such as network congestion and slow processing speed, people complain a lot, but Vitalik is still very young and there is still a lot of room for development in the future.
Foresight News: What do you think of the current status and future of Ethereum? Is Ethereum reaching a bottleneck in its development?
Changpeng Zhao: It is difficult for me to comment on Ethereum. Vitalik is a genius, and his personality is quite different from mine. He doesn’t like social interaction and is more focused on technology research and development. Maybe because I am young and have been criticized many times online, I don’t pay much attention to external comments.
I think there is little difference between L2 and L1. Our research found that the difference between L1 and L2 is not very obvious at this stage. Except for Bitcoin, the carrying capacity of other chains is not saturated, and there is enough space to carry more transactions.
What is lacking now is the application on the chain. The transfer function is basically mature, but various practical applications are relatively scarce. I encourage everyone to develop on-chain applications. BNB Chain and Yzi Labs both support everyone to develop applications, such as social media, AI, biological science data collection, and using blockchain for government identity authentication and other scenarios.
Foresight News: Since the birth of blockchain, most of the innovations that have emerged are related to finance, such as ICO, DeFi, etc. In addition to finance and making money, in which direction do you think this industry should develop?
Changpeng Zhao: In my opinion, the development of the industry is basically divided into two parts. One part is related to finance, including transfers, investments, ICOs, DeFi, etc. The other part is currently less developed, but I think it has more potential than the financial field. Since the birth of Bitcoin, there has been a concept that anything that needs notarization should be placed on the blockchain, but the demand was not strong enough before, and related applications were not made. Now, starting from the United States, people like Musk have proposed to use blockchain to improve government efficiency. I have been in contact with many governments recently, and they also have similar ideas, such as the UAE government. To realize these ideas, first of all, decentralized on-chain identity authentication (DID) may be needed. With this identity, it can be applied in scenarios such as opening a bank account, applying for a visa, entry and exit, real estate and land registration, seeing a doctor in a hospital, graduation diploma certification, government procurement, securities investment, and real estate investment.
Although it is still in the trial stage, I see a lot more attempts than before. Just like when the Internet first appeared, video conferencing technology has been developed for a long time and is only now gradually maturing. The same is true for blockchain technology. Although it is not certain when these applications will be fully developed, I see many people working hard. Yzi Labs is also involved in many such projects, and we have invested a lot in this area.
Foresight News: You’ve spent a lot of time on DeSci over the last year. What do you think of the development of such projects? Does it make sense to use blockchain to raise funds for them? Or is this just a short-term trend like Meme Coin?
Changpeng Zhao: This type of project (a combination of scientific research and blockchain) is definitely meaningful in the long run. It is completely different from Meme Coin. The DeSci project has a very long development cycle. For example, researching drugs to treat cancer and grow hair takes a long time.
Currently, global pharmaceutical RD funds are basically controlled by a few large pharmaceutical companies, whose starting point is more to pursue profits rather than cure all diseases. To take an extreme example, if a scientist discovers a low-cost method to cure all cancers, large pharmaceutical companies may be unwilling to promote it because it will affect their existing huge industrial chain and huge profits.
However, many scientists and medical researchers lack funds when they are doing university or personal research, and they cannot set up a decent laboratory to do experiments. The funds they need may not be much, about 100,000 to 500,000 US dollars, and the annual expenses are similar. Blockchain financing is relatively easy, and there are many people around the world willing to invest in these scientists. Through blockchain smart contracts, the use of funds can be restricted, for example, only 100,000 to 200,000 US dollars can be taken out each year. The funds will be released only after the project reaches certain milestones and the community votes.
If scientists stop researching, they won’t get follow-up funding. After a project is successfully developed and has patents and revenue, it should also be given back to investors.
It’s just that the project cycle is long, and the attention span of investors in the digital currency industry is generally short. Meme coins are very popular, but these projects are not paid attention to. But in the long run, these projects will make great contributions to mankind and society. I believe they will develop in the future, but I’m not sure about the specific time.
Foresight News: You have an educational project called Giggle Academic, which seems to have nothing to do with cryptocurrency or finance. Why did you try to do education? I even wonder if this has something to do with your family background?
Zhao Changpeng: Its hard to say whether family background has any influence, but it definitely has some influence subconsciously. I think education is very important. Last year, when I had nothing to do in the United States, I was thinking about what I could do to have the greatest positive impact and maximize the value of my time.
After much thought, in the long run, education may be the most worthwhile area to invest in. Not from the perspective of making money, but considering the positive impact. There are many problems in the current education system. Textbooks have not been updated for 20 to 30 years, and classroom education also has great limitations. Classroom education is an average education for 20 to 30 children. If a child is good at math but poor at English, he may be asked to spend less time learning math and more time learning English. In the end, the students trained are all average.
But the future world is an era of global competition. For example, programmers now use AI to write code. You must be better than one million other people. You need to give full play to your expertise instead of pursuing average development. In addition, there are about 1.2 billion to 1.3 billion people in the world who cannot go to school, of which 700 million to 800 million are adults, two-thirds of whom are women who are illiterate, and 300 million to 500 million children are not in school. It is very inefficient to solve these problems by building schools.
With our current level of technology, we can use gamification to build an educational platform with the help of mobile phones and iPads (Android tablets are also very cheap) so that children can learn while playing games. I formed a team at that time. At the beginning, there were only three or five people, and now there are about 30 people. We have made 30 or 40 courses. These courses are very playful. Children will immerse themselves in learning letters, colors, new words and other knowledge as soon as they come into contact with them. Everyone likes it very much.
I have calculated that it costs at most $1 million to make a first-grade English course, $12 million for a 12-grade course, and about $300 million to make 30 different courses, including English, math, biology, science, etc. The United States subsidizes the education sector every year at $110 billion. We only need to spend 0.03% of the money to digitize all the 18 years of education content in schools and teach it directly to children through the platform.
I am not doing this project to make money. All the content is free. I think the return on investment (not monetary return, but social impact return) is higher than any charity or donation, so I will continue to do it. I am very happy to do this project. In the past year, I was trapped in prison for 4 months, and I was preparing for the trial for the previous 5 or 6 months. I only worked for a few months. Now there are more than 7,800 children using our products, and many universities have only 5,000 to 6,000 people. This success makes me feel very accomplished.
Our starting point is not to help children get a school diploma, but to help them find a job. A 10-year-old child can make money by doing AI data annotation. My nephew managed a game community of 14,000 people at the age of 13, which is also a lucrative job. But if you want to get a graduation diploma, you need to learn many subjects such as Chinese, mathematics, English, natural sciences, and physical education.
You may only need one skill to find a job, and the age limit is very loose. For example, for programming, English is enough for basic communication; for art design, the requirements for other subjects are not high. My starting point for this platform is not to let African children get into Harvard, but to let them find a job, whether it is remote work or face-to-face work, and earn 300-2000 US dollars a month, which is a very high income in Africa. So this platform has a different starting point from traditional education, and the design will also be very different.
Foresight News: In addition to the vitality of the crypto space, the global macro environment is not very good this year. The tariff issue exists not only between China and the United States, but also between the United States and all its allies. The war between Ukraine and Russia has never stopped, and Israel and Hamas in the Middle East are also in constant conflict. Do you care about these macro situations?
Changpeng Zhao: I don’t care too much, but I am optimistic. I think the previous US government was not very friendly to encryption. This is my personal deep experience. The new US government has only been in office for about 60 days. Just like a company changes executives, it takes several months for all matters to stabilize. From my point of view, we cannot expect that all problems will be solved within 10 days after the new government takes office. Many problems have accumulated over many years, such as the war between Ukraine and Russia, which has a deep historical origin.
But I can clearly see that the US government is working hard to solve these problems, and the solutions are much better than before. Although it cannot be solved immediately, at least it is actively negotiating. Commercial negotiations usually take several months. At present, the US government has been moving very quickly, with new initiatives every day.
This government is more friendly to digital currency and the entire business. Of course, being business-friendly does not mean that stock prices will continue to rise, because this involves negotiations between countries, including taxation and other issues, such as the negotiations between the United States and China, Canada, Mexico and other countries. But as long as there are talks, there is hope, so everyone should have reasonable expectations for the problems. I can clearly feel that this government is much better than two months ago. Although not all problems have been solved, there is at least a trend of solving problems.
I am still very optimistic about the macro environment. In the future, the development of AI, robots, and blockchain will require cooperation among several major countries, because China has strong production capacity. For example, many raw materials for American robots are produced in China, and the supply chain is difficult to cut off. So I am still relatively optimistic.
Foresight News: You spent four months in prison last year, which is an unimaginable experience for ordinary people. Has this experience changed you in any way? Do you think it was a nightmare?
Zhao Changpeng: This experience was very bad, but it was not a nightmare. In the US prison, I was not physically threatened, and there were no fights or anything like that, but the psychological pressure was very high.
What worried me most was that I wasn’t sure how long I would be detained. If I had known that 4 months would be enough, I might have felt more relaxed. But at the time, I was always worried that they would find reasons to detain me longer. This uncertainty brought me a lot of mental pressure.
This experience definitely changed my outlook on life and made me realize what is important. I used to be a workaholic, but in prison, I lost all my material possessions. What I missed most was not my work, but my family and friends. In prison, if you get sick, the doctor wont care unless you are dying. You have to bear the cold and fever by yourself. This made me realize the importance of health.
There was nothing else to do in prison, so I worked out every day. Although the food was not good, I still tried to eat as much as possible. I lost 6 kilograms in 4 months, but my physical condition was still good and my muscles were more developed. After I get out, I will cherish the time with my family more and the focus of my life will change. This is a very bad experience, and I don’t want anyone to have such a experience.
Foresight News: Have you ever gotten sick in prison?
Zhao Changpeng: Yes, I caught a cold and had a cough three or four times in four months. You can buy common antipyretics, painkillers, and vitamin C effervescent tablets in prison. Less than two weeks after I was in prison, I had a sore throat and a slight fever. I happened to have a physical examination, and I told the doctor that I was not feeling well. The doctor said that they only checked blood pressure and weight. If you need treatment, you can either go to the store to buy over-the-counter drugs or reapply to see a doctor, but you have to wait three weeks. So in prison, if you are sick, you basically have to buy medicine yourself.
Foresight News: Is there an economic system and currency system in prison?
Zhao Changpeng: Yes, I could spend a maximum of $180 every two weeks, and I had to fill out a form to apply for something, which was a complicated process. I could only buy something every two weeks. If the item I applied for was out of stock, I couldn’t buy it, so I couldn’t spend all the $180, and my shopping was very limited.
Foresight News: There is another important figure in the crypto space who is in prison - Sam Bankman-Fried (founder of FTX). Based on your experience, do you think he should be given another chance? What do you think of what he did?
Changpeng Zhao: I think it’s better to comment less. People may think I comment too much. I just think that any fraudulent behavior should be punished. After all, many people have suffered huge losses. But I am not an expert in the specific punishment, so I will not comment on it.
Foresight News: What are you most concerned about at this stage? What are your plans for the next stage?
Changpeng Zhao: At this stage, I spend more time thinking about how to help other entrepreneurs succeed. I am not starting a business myself, but I have accumulated some experience from previous business ventures. We have an investment fund, and if entrepreneurs need help, I can also be their consultant. Of course, many people come to me, and we will screen them. I hope to support hundreds or even thousands of successful entrepreneurs and let their projects become unicorn companies. I will be very happy if I can do that, because it can indirectly promote the development of the entire society. This is what I am most interested in at the moment.
We already have Yzi Labs, which we use to invest and support entrepreneurs. I generally don’t make particularly grand plans, and I don’t plan specific things 5 or 10 years later. I will probably look at one direction. I know that in 5 or 10 years, the blockchain industry will be bigger, the AI industry will continue to develop, and biological sciences will be more advanced. So I will basically continue to invest in these three areas and support entrepreneurial projects.
