Binance's reasons to become an Equity Investor in Twitter after being bought by Elon Musk.
It’s been a few weeks since business magnate, Elon Musk, finally completed his controversial acquisition of the social media platform Twitter for $44 Billion. It is a good time to remember that back in May Binance committed to investing $500 Million to help Elon with his new vision of Twitter, which means we might see a more significant role for Blockchain in social media.
On May 5th Binance’s CEO, Changpeng Zhao (CZ), declared they were excited to help realize Elon’s new vision for the social media platform and “Play a role in bringing social media and web3 together and broadening the use and adoption of crypto and blockchain technology”. Now that Elon´s Twitter deal is sealed and Binance and 18 other companies, like Sequoia Capital and The Lawrence J. Ellison Revocable Trust with their $1 Billion investment, seem to be moving forward with their plans of becoming equity investors.
So, why did Binance’s CEO decide it was a good idea to make this investment?
CZ declared he had been repeatedly asked about the Twitter investment in his recent interviews, so he decided to tweet about the main reasons, so let’s look at them:
Bring back freedom of speech
This one is really important because it is not only the main reason for Binance to invest in Twitter but also the primary motivation for Elon to buy it, as he stated in a recent tweet; however, this is perceived with mixed critics from the people. For some, this is great news, others believe this is opening a door for misinformation and radical thoughts to brew on the social network.
CZ expressed “Twitter is the global Townsquare. From singers/athletes/movie stars to politicians/CEOs/entrepreneurs, the crypto community, and us little guys, Twitter gives us our voice. This alone is enough for us to invest”. He also added that this is a long-term investment and free speech is a prerequisite for having freedom of money, which is one of the company’s goals.
Support of entrepreneurs
Binance supports entrepreneurs, and Elon is a strong one, says CZ. It is no secret he has been managing many companies over the past years in many industries, such as automotive, solar, artificial intelligence, space, and communications. At Binance, they hope Twitter will continue to grow with him at the helm.
Unexploded value & provider of liquidity
The company believes that Twitter has tremendous unexploited value. By combining Elon’s entrepreneurship and cryptocurrencies, they can make innovative business models that don’t rely on selling user data, a common practice nowadays. Also, they are excited to help with the web3 integration to social media and offer to serve as a liquidity provider if needed, and they are pretty sure everyone needs liquidity.
“Invest in what you use”
CZ is a heavily active Twitter user, he is always tweeting and interacting inside the platform, so it makes sense he will want to be involved with the podium at a higher level; he quoted a famous saying “invest in what you use. (Not financial advice)”
Problem solver & helper
Of course, there is another major reason to join Twitter as an equity investor, and that is to help solve problems; it is no secret that most users of Twitter dislike the number of bot accounts (Musk almost backed out of the deal because of the number of bot accounts), and that includes CZ. He said solving that problem is at the top of his list, so the users are probably going to see more paid functions on Twitter.
CZ says he will give all his earnings from these functions to charity if they are implemented, and of course, he also wishes to see the long-awaited “golden fleece,” the edit function.
What kind of future awaits?
Will it be possible to see a fully functional social media platform with actual free speech that doesn’t sell your information, is closely tied to web3 and is free from bots? Only time will tell, and whether or not it is a success will depend solely on the users. Maybe we will see a future with tokenization inside Twitter.
Hector Borges