- September 5, 2023
- Posted by: [email protected]
- Category:
The CEO of Binance, Changpeng Zhao, has offered his vision of the future of the cryptocurrency space, emphasizing the importance of decentralization. CZ predicts that decentralized finance (DeFi) has the potential to surpass centralized finance (CeFi) during the upcoming bull market.
Zhao stated his confidence regarding the growth of DeFi during a live X Spaces session titled CZ AMA on September 1. He stated, “I think the more decentralized the industry becomes, the better,” and hinted that it may not be long before DeFi eclipses CeFi in terms of trading volumes.
Notably, the surge in decentralized exchanges (DEXs) was highlighted in a June 9 report following legal actions taken by the United States Securities and Exchange Commission (SEC) against centralized exchanges like Coinbase and Binance. In just 48 hours, the median trading volume on the top three DEXs skyrocketed by 444%. As of the time of the report, DEXs boasted a total 24-hour trading volume of $722,776,226.
CZ also weighed in on the recent dismissal of a lawsuit against the decentralized protocol Uniswap. He described the outcome as “extremely positive, extremely reasonable, logical, and clear,” signaling his approval of the decision. On August 30, a U.S. federal court dismissed a class-action lawsuit against Uniswap, its CEO, foundation, and venture capital supporters. The plaintiffs had claimed losses due to scam tokens on the decentralized exchange. The judge’s decision rested on the inability of both sides to identify the scammers and underscored that regulatory uncertainty hampers investor protection.
During the session, a participant recalled the judge’s ruling that developers cannot be held liable for the misuse of a DeFi platform, a development seen as positive for DeFi builders. CZ concurred, emphasizing the importance of industry protection and framing code development as a form of free speech.
According to recent data, venture capitalists’ investment strategies are shifting, with funds being redirected from CeFi projects to bolster investments in DeFi ventures. A March 1 report from CoinGecko revealed that digital asset investment firms poured $2.7 billion into DeFi projects in 2022, marking a 190% increase from 2021. In contrast, investments in CeFi projects saw a sharp decline of 73%, dropping to $4.3 billion in the same year. The report suggested that this trend could signify DeFi’s emergence as the new high-growth area within the crypto industry, possibly driven by CeFi reaching a saturation point. As CZ and others champion the growth of DeFi, the industry’s transformation continues to unfold.
