Binance CEO Changpeng “CZ” Zhao predicts that decentralized finance (DeFi) has the potential to overtake centralized finance (CeFi) in the next bullish phase.
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During a live broadcast on X Spaces (formerly Twitter Spaces) on September 1, titled CZ AMAZhao shared his thoughts on the future of DeFi. “I think the more decentralized the industry is, the better,” he declared.adding that it may not be long before it takes over CeFi’s trading volume:
“DeFi is the future; the volume is somewhere between 5% and 10% of CeFi volumes, which is not small […] the next bullish phase may very well make DeFi bigger than CeFi.”
AMA later today. I guess it’s called an ‘X space’ now, lol. https://t.co/mZrJ2nMTIO
— CZ Binance (@cz_binance) September 1, 2023
LOVE later today. I guess it’s called an ‘X space’ now, lol.
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On June 9, Cointelegraph reported that following legal actions by the United States Securities and Exchange Commission (SEC)for its acronym in English) Against centralized exchanges Coinbase and Binance, average trading volume across the top three decentralized exchanges (DEXs) skyrocketed 444% in 48 hours. At the time of the publicationthe total 24-hour trading volume on the DEXs was $722,776,226.
CZ further shared his perspective on the recent dismissal of the lawsuit against the decentralized protocol Uniswap.. “The Uniswap thing was extremely positive, extremely reasonable, logical and clear. That’s very good,” he said.
August 30th, a US federal court dismissed a class action lawsuit against Uniswap and its CEO, its foundation and its venture capital backersfiled by plaintiffs who claimed to have lost money due to fraudulent tokens on the decentralized cryptocurrency exchange.
The judge threw out the case because neither party could identify the scammers and stressed that regulatory uncertainty leads to less investor protection:
“Now suing Uniswap defendants […] in the hope that this Court can overlook the fact that the current state of cryptocurrency regulation leaves them without recourse.”
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During the session, an X user recalled the judge’s decision that developers cannot be held responsible for misuse of a DeFi platformwhich the user believes is positive news for DeFi builders. CZ agreed that further protection of the sector is a positive development.
“Developers writing code, that code is free speech. So development is really good,” CZ stated.
Recent data indicates that VCs are reallocating funds from CeFi projects to boost their investments in DeFi projects.
According to a March 1 report from CoinGecko, digital asset investment firms invested $2.7 billion in DeFi projects in 2022an increase of 190% from 2021, while Investments in CeFi projects fell 73% to $4.3 billion during the same year.
This “potentially points to DeFi as the new high-growth area for the crypto industry”the report stated, adding that the decrease in financing to CeFi could be due to the fact that the sector is reaching a saturation point.
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