Changpeng Zhao Stated: DeFi Won’t Flip Traditional Finance

Binance’s CEO Changpeng Zhao stated that Defi will not flip traditional finance anytime soon despite the exchange doubling down on the space as a way to migrate to a fully decentralized exchange. In our latest binance news, we are reading more about his opinion.

It didn’t take long for CZ to emerge as the DeFi powerful cheerleader. As a founder of the biggest centralized exchange in the world, his enthusiasm towards Defi especially his admission in the decentralized exchanges will likely overtake his own centralized exchange as he plans to create a Defi empire within Binance. Changpeng Zhao stated that despite launching a DEX on Binance Chain, the company was mostly an observer. That all changed when the CEO unveiled a sister chain, Binance Smart Chain which is 100% ETH compatible.

According to him, however, he truly understood it when he learned about the power of Automated Market Making for stablecoins. Last year, he was not able to imagine that the stablecoin trading will be a thing because it was counterintuitive. However, once he understood the concept of Curve, all of that changed. Curve like many other Defi projects uses an algorithmic concept for price discovery without the order-books used by centralized exchanges. Despite being a fan of the AMM concept, CZ said he was not a diligent DeFi farmer:

 “I don’t personally use DeFi products that much. I tried them to understand the workflow.”

Binance selects DeFi projects based on data such as the number of users so it’s no wonder that most of the projects are straightforward such as Compound, Curve, Balancer, and Uniswap. However, CZ said that most of the coins will die in two weeks, as he is looking to create a project that will be long-lasting. By long-lasting value, he referred to projects that will serve to the masses and will solve real business problems rather than coins that serve as rebates and rewards for the whales. The idea that all decentralized exchanges will overtake the centralized ones, propelled Binance to Launch the Binance Chain back in 2019 as CZ said:

 “I hate running a centralized exchange.”

For Zhao, a great product of moving to a decentralized exchange will be the fact that no one will complain and blame the exchange for listing certain coins. Binance will also not hold the users’ keys and there will be no fear of losing them:

 “There is no ‘running,’ just developing and deploying it.”