The crypto industry is evolving at a breakneck pace, and according to Changpeng Zhao, CEO of Binance, decentralized finance (DeFi) could soon surpass its centralized counterpart, CeFi. That’s a bold prediction, especially given the industry’s recent turmoil.
In short
- Binance CEO CZ is optimistic about DeFi’s future dominance.
- Investments in DeFi are increasing, while CeFi is seeing a drop in funding.
DeFi Booming: Binance CEO’s Bold Prediction
Decentralized finance (DeFi), although new to the crypto ecosystem, is already making its way to notable dominance. During a lively discussion on X Spaces on September 1, Changpeng “CZ” Zhao, the CEO of Binance, enthusiastically expressed his confidence in DeFi. He raised the possibility that it will surpass centralized finance (CeFi) in the near future.
“ DeFi is the future. It already occupies between 5% and 10% of CeFi volume, and it may well take the lead in the next wave of adoption “, does he have declared.
Recent events support this perspective. For example, following a lawsuit initiated by the SEC against behemoths such as Binance and Coinbase in June, trading volumes on decentralized exchanges, DEXs, have seen breathtaking growth.
But it’s not just transaction volumes that reflect this transition. The statistics also reveal a growing enthusiasm among venture capitalists for DeFi, at the expense of CeFi.
A report from CoinGecko dated March 1 indicates that, for the year 2022, crypto investment firms have injected $2.7 billion. At the same time, financing for CeFi projects fell by 73%, reaching $4.3 billion in the same year.
This significant reallocation of funds is far from trivial and provides insight into what the trajectory of DeFi in the crypto landscape could be.
Towards crypto regulation more favorable to DeFi
Regulation is a major pivot around which the future of DeFi and CeFi revolves. Speaking on the recent court decision regarding the decentralized protocol Uniswap, CZ articulated his thoughts in glowing terms:
“ The conclusion of the Uniswap case is a very encouraging, sensible and enlightened step. It’s a step in the right direction “, he stressed.
On August 30, a US federal court dismissed a lawsuit against Uniswap, its CEO, its foundation and its venture capitalists. The plaintiffs claimed to have suffered losses due to fraudulent tokens on the decentralized exchange platform.
This decision shows a possible evolution in the position of regulators and judges towards DeFi. By maintaining that developers cannot be held responsible for the abusive use of their platforms (DEX), this verdict could thus have a lasting influence on the legal vision around DeFi players. For CZ, this decision is a sign that “innovation is on the right track”, emphasizing that programming is a matter of freedom of expression.
“ Developers produce code, and that code is an embodiment of free speech. This orientation is highly beneficial. Every nation needs cryptocurrency; some even require it with great urgency. If advanced countries want to preserve their preeminence in financial innovation, they must embrace it “, says CZ.
The dynamic between DeFi and CeFi continues to evolve, and iconic figures like CZ are outlining the horizon of this sector. Faced with changing regulations and growing transaction volumes, DeFi is emerging as the future pillar of the crypto revolution.
Receive a summary of the news in the world of cryptocurrencies by subscribing to our new service daily and weekly so you don’t miss anything of the Tremplin.io essentials!
