Binance CEO Changpeng Zhao has predicted that decentralized finance (DeFi) has the potential to overtake centralized finance (CeFi) in the next bull run.
During the live X Spaces (formerly Twitter Spaces) on September 1, titled czech ama, Zhao shared his thoughts on the future of DeFi. “I think the more decentralized the industry, the better,” he declared, adding that it might not be long before it takes over CeFi volume:
“DeFi is the future; the volume is about 5% to 10% of the volume of CeFi, which is not small, right […] The next bull market is likely to make DeFi bigger than CeFi. “
AMA later today. I think it’s called “Space X” now lol. https://t.co/mZrJ2nMTIO
— CZ Binance (@cz_binance) September 1, 2023
On June 9, Cointelegraph reported that the median trading volume of the top three decentralized exchanges (DEXs) fell within 48 hours after the U.S. Securities and Exchange Commission (SEC) took legal action against centralized exchanges Coinbase and Binance. Soared 444%. As of the publication of this article, the total 24-hour volume on the DEX is $722,776,226.
CZ further shared his thoughts on the recent dismissal of a lawsuit against decentralized protocol Uniswap. “The Uniswap thing is very positive, very logical, logical, clear. It’s very good,” he declared.
On Aug. 30, a U.S. federal court dismissed a class-action lawsuit against Uniswap, its CEO, foundation, and venture capital backers, with the plaintiffs alleging losses from scam tokens on the decentralized cryptocurrency exchange.
The judge dismissed the case because neither side could identify the scammers, emphasizing that regulatory uncertainty can lead to less investor protection:
“They are now suing the Uniswap defendants […] Hopefully the courts will ignore the fact that the current state of cryptocurrency regulation leaves them with no recourse. “
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During the meeting, an X user recalled the judge’s ruling that developers should not be held liable for the abuse of DeFi platforms, which the user saw as good news for DeFi builders. CZ agrees that strengthening industry protections is a positive development.
“Developers write code, and code is free speech. So development is really good,” CZ said.
Recent data suggests that venture capitalists are reallocating funds from CeFi projects to increase investment in DeFi projects.
According to a CoinGecko report on March 1, digital asset investment companies will invest US$2.7 billion in DeFi projects in 2022, a 190% increase from 2021, while investment in CeFi projects will drop by 73% to US$4.3 billion in the same year.
This “may indicate that DeFi is a new high-growth segment of the cryptocurrency industry,” the report said, adding that the decrease in CeFi funding could be due to the industry reaching a saturation point.
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