Bailing out bad projects doesn't make sense: Binance co-founder on current crypto conditions

livemint.com:

Changpeng Zhao (CZ), co-founder and CEO of the largest cryptocurrency exchange, Binance said he is bullish on bear markets. He believes the blockchain industry has shown remarkable resilience. And considering the current tough market conditions, the Chinese-Canadian executive has provided his views on 'bailout' and cryptocurrency leverage.

In a blog on Thursday, CZ said, "As you all know, current market conditions are tough. With our position as one of the largest industry players with healthy cash reserves, we have a duty to protect users. We also have a responsibility to help industry players survive and hopefully thrive. This is the case even if there are no direct benefits to us or we experience negative ROIs."

According to Zhao, the word “bailout" can have different meanings for different people. And as with most things in the real world, it’s not a binary situation.

In the first category, Zhao explains "not all bailouts are the same". He points out different types of “bailouts" for different situations. First, some companies/projects/products are - poorly designed (no product-market fit); poorly managed; poorly operated.

In simple words, these are just 'bad' projects, and in Zhao's view "these should not be saved."

However, the dilemma begins when some of these 'bad' projects have a large number of users, which as per Zhao are often acquired through inflated incentives, “creative" marketing, or pure Ponzi schemes.

Furthermore, according to the Binance CEO, in any industry, there are always more failed projects than successful ones.

He hopes the failures are small, and the successes are large. In his opinion, bailouts here don't make sense.

"Don’t perpetuate bad companies. Let them fail. Let other better projects