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Binance’s DeFi credo: be like Netflix, not like Kodak

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Binance's DeFi credo: be like Netflix, not like Kodak

Binance’s DeFi credo: be like Netflix, not like Kodak
CONTENT

  • Binance CEO Changpeng Zhao Speaks at Blockchain Summit in Los Angeles.

  • He reiterated that centralized finance will eventually be supplanted by decentralized finance..

  • Zhao said Binance is also moving away from centralization principles.

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Binance CEO Changpeng Zhao is optimistic about the prospects for decentralization of finance and is ready to step into this future.

The head of the popular cryptocurrency exchange Binance, Changpeng Zhao (CZ), does not hide his passion for the phenomenon of decentralized finance. Recently, the BeInCrypto editors reported that Binance has allocated $ 5 million for a new program of rewarding dApp developers as part of its development initiative DeFi projects.

DeFi will swallow us all

Binance's DeFi credo: be like Netflix, not like Kodak

Now, the CEO of Binance told Reuters correspondent Anne Irrera during the blockchain summit in Los Angeles:

“In the long term, the DeFi industry will replace the centralized finance segment (CeFi) “.

At the same time, Zhao added, Binance, as the world’s largest centralized crypto exchange, will gladly meet such a takeover..

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He went on to explain exactly what the characteristics of the new DeFi phenomenon are: Decentralized finance (DeFi) is financial services built on blockchain technology that offer users access to an open, efficient and … More he sees as the most promising. So, Zhao mentioned the aspect of liquidity pools, but clarified that he did not consider the stability of the super-high profitability model, which, as a blueprint, produce many similar projects that promise fabulous profits to investors.

“I think we will eventually settle in a healthier and more reasonable range of annual percentage yield (APY), of the order of 5-15%,” he suggested..

Don’t miss the fun

As a reminder, in June we talked about how Binance itself added support for futures on the all-new Compound DeFi token (COMP) with 50x leverage. At that time, many market participants considered this an unacceptable level of risk for an unverified coin..

Moreover, the exchange continues to actively list all new “hype” tokens, considering this to be its contribution to support innovation. As Zhao himself explained, Binance started out as an altcoin exchange, so it has never rejected a wide variety of tokens. He admits that the bulk of these projects will ultimately fail, but some innovation will be able to gain a foothold in the market..

Binance's DeFi credo: be like Netflix, not like Kodak

DVD version of Netflix

Commenting on the situation with centralized exchanges in general, Zhao compared them to an early DVD version of Netflix, which was a mail-order disc delivery giant in its early days..

“This is not our long-term goal. Although we are the largest centralized exchange in the world, we do not seek to cling to this status. We are more interested in innovation “.

The company has now allocated $ 100 million to a fund for the development of DeFi projects and protocols. Binance hopes that some of them will be successful and more useful than existing solutions.

Zhao argues that under his leadership, the exchange is not clinging to an old business model, but is looking for a new one. An anti-example for him is Kodak, which stubbornly held on to old film technology when the world was going digital. As a result, everything ended in bankruptcy for the company. Zhao doesn’t want Binance to repeat this mistake.

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