Changpeng Zhao, CEO of the world’s largest cryptocurrency exchange Binance, believes DeFi will outpace him. In this sense, Zhao considers that Decentralized Finance is an instrument with greater momentum.
He explains that there are contradictions when a company like Binance is oriented to DeFi. The flourishing of this ecosystem, based mainly on Ethereum, threatens to end the reign of the Binance exchange which is the most important today.
It should be noted that Binance’s campaign to enter the world of DeFi, aims to replicate some advantages of the Ethereum network. In this way, an attempt is made to take advantage of the more points “fertile”Of this Blockchain.
Binance CEO faced with a dilemma
The dilemma facing Binance CEO Changpeng Zhao is to adapt to the power of DeFi and lose steam in his exchange, or to maintain its supremacy and not take advantage of the advantages offered by the Decentralized Finance ecosystem.
It should be taken into consideration that, in theory, DeFi is not only proposed as an alternative to banks. At the same time, their very nature could lead them to challenge today’s hegemonic lenders, as well as Wall Street traders.
However, as already mentioned, the great dilemma exposed by the CEO of Binance is that DeFi is a challenge to everything that is centralized. In this sense, it should be remembered that the Binance exchange, having these characteristics, would also be displaced by these.
Maintaining a position of supremacy in the cryptocurrency exchange market is a challenge for Binance and other platforms. Some rival exchanges such as Huobi or Coinbase are also actively preparing for what is now a reality, the rise of DeFi.
Some decentralized exchange projects, such as Uniswap or Sushiswap, are attracting more trading volumes. In line with this, the CEO of Binance, ensures that his company is open to the idea of adapting to the new model imposed by Decentralized Finance.
This, he explains, is the only way to maintain the relevance of the firm with the Binance Smart Chain project. For its part, it should be noted that the DeFi multiplied its Total Blocked Value (TVL) 16 times so far this year, up to the current amount equivalent to $ 11,000 million USD.
There are no intentions to strengthen a CeFi
Changpeng Zhao, assured that, instead of challenging the DeFi by strengthening a Centralized Finance system (CeFi), it is best to adapt. “Right now, it is one of our largest businesses supporting our growth. But in the long term, we want to push decentralization”, He specified.
While the CEO of Binance refuses to strengthen his CeFi system, he explains that this is because he does not want his company to be the “Ethereum killer”. On the contrary, he considers, it is about presenting himself as an alternative to this project.
The foundation of “this alternative to Ethereum”Focuses on the fact that many investors are burdened by fees. Whereas in Binance Smart Chain, the conditions would be much more favorable.
It’s not about raising dust
Another aspect that Zhao highlighted is that Binance must avoid at all costs tarnishing its reputation as other projects have done. It refers to protocols such as Sushiswap or Yam, which, seeking to exploit the popularity of DeFi, ended in a “ridiculous”.
He explains that it is a mistake that these developers considered DeFi as a culture of “anything goes”. With this, their proposals “exploded in popularity overnight and then quickly faded”. It is, he declared, a luxury that Binance cannot afford.
Data to take into consideration
- The rise of DeFi in 2020, has increased 16 times, reaching the TVL figure of $ 11,000 million USD.
- Changpeng Zhao, CEO of Binance believes that his company should not focus on even strengthening CeFi and disregarding the benefits of DeFi.
- The Binance Exchange, despite being the most important in the world, could be displaced by DeFi protocols such as Uniswap.
- The goal of Binance Smart Chain is to take advantage of all the benefits of Decentralized Finance, while maintaining the status of Binance.