Decentralized Finance Could Eclipse Traditional Systems, Says Binance CEO
© Getty Images Sport/Paolo Bruno
Changpeng “CZ” Zhao, the CEO of Binance, one of the world’s leading cryptocurrency exchanges, has weighed in on the future of the financial ecosystem. He believes that decentralized finance (DeFi) might soon outpace its centralized counterpart (CeFi) in terms of trading volumes, especially during the anticipated next bull run.
During a recent session on X Spaces, which was previously known as Twitter Spaces, and aptly titled ‘CZ AMA,’ Zhao was emphatic about the ascent of DeFi. He remarked, “I think the more decentralized the industry becomes, the better”.
With current trading volumes of DeFi being somewhere between 5% to 10% of CeFi volumes, he feels it’s merely a matter of time before DeFi becomes predominant. “DeFi is the future; the next bull run may very well make DeFi bigger than CeFi,” he projected.
AMA later today.
I guess it’s called an ‘X space’ now, lol. https://t.co/mZrJ2nMTIO — CZ 🔶 Binance (@cz_binance) September 1, 2023
Recent Court Decisions Strengthen DeFi’s Position
Zhao also touched upon a recent court ruling that has resonated positively within the DeFi community.
On August 30, a U.S. federal court dismissed a class-action lawsuit that had been initiated against the decentralized protocol, Uniswap. Plaintiffs in this case claimed losses due to scam tokens on the decentralized cryptocurrency exchange.Commenting on the decision, Zhao noted, “The Uniswap thing was extremely positive, extremely reasonable, logical and clear.
That is very good”. The court had rejected the lawsuit largely due to the inability of either party to pinpoint the scammers. The judge’s emphasis on the existing regulatory grey areas, which arguably reduces investor protection, was noteworthy.
The judge’s statement highlighted the challenges: “They now sue the Uniswap Defendants […] hoping that this Court might overlook the fact that the current state of cryptocurrency regulation leaves them without recourse.”Further bolstering the case for DeFi was the judge’s ruling that developers cannot be held accountable for how a DeFi platform is used.
One user during the session referred to this as a positive step for DeFi builders. CZ, in agreement, opined that safeguarding the industry is indeed a positive stride. “Developers writing code, that code is free speech. So the development is really good,” he concluded.
