Binance CEO Changpeng Zhao has warned his colleagues of turbulent times for crypto space in the coming months.

Binance CEO CZ Predicts DeFi as the Future of Crypto

  • The Binance CEO believes DeFi platforms will surpass CEXes in trade volume in the next bull run.
  • Most DeFi protocols are amassing billions in TVL, showing increased participation.

Binance CEO Changpeng “CZ” Zhao has dived into the popular conversation about decentralized finance (DeFi) and centralized finance (CeFi) platforms. Interestingly, the Binance CEO believes that the DeFi world holds the key to the future of crypto. Despite running a centralized exchange (CEX), CZ, in a recent live X Spaces (formerly Twitter Spaces), noted that decentralized exchanges (DEXes) will surpass CEXes in volumes during the next bull run.

According to CZ,

DeFi is the future; the volume is somewhere between 5% to 10% of CeFi volumes, which is not small right […] the next bull run may very well make DeFi bigger than CeFi.

Recall that centralized exchanges like Binance, Kraken, and Coinbase have enjoyed widespread attention and the bulk of trading volumes over the last few years. However, there’s been a growing call for more decentralized services.

Centralized platforms like Binance act as middlemen in peer-to-peer transactions. Meanwhile, decentralized exchanges operate without intermediaries and rely on blockchain technology to encourage transparent transactions.

CZ highlighted multiple reasons for his bullish perspective on DeFi. He emphasized the fundamental advantages of decentralized systems, including improved security, lowered costs, and transparency. DeFi platforms appeal to crypto users concerned about the restrictions and costs connected with traditional financial services.

DeFi platforms also provide a wider variety of financial services with fewer limitations and enticing interest rates. Zhao also praised DeFi platforms’ resilience during this bear market and regulatory scrutiny.

Although DEXes have been the most vulnerable to crypto attacks, CZ believes that “the more decentralized the industry becomes, the better.” He also shared his view on the recently dismissed lawsuit against DEX Uniswap. He referred to the ruling as “extremely positive, extremely reasonable, logical, and clear.”

Uniswap recently secured a victory after a U.S. federal court dismissed a class-action lawsuit filed against it by plaintiffs who claimed to have lost money from a scam token listed on the exchange. Interestingly, Southern District of New York Judge Katherine Polk Failla dismissed the case, noting that neither party knew the identity of the scammers.

CZ’s optimistic view of decentralized platforms aligns with the opinion of the industry at large, which views DeFi as having the potential to alter the crypto market completely. 

Data from the blockchain analytic tool DeFiLlama shows that most DeFi platforms have accumulated billions in TVL (total value locked), an essential measure illustrating the amount of assets staked or deposited in a specific DeFi protocol. This increase in TVL points to rising engagement and trust in decentralized finance systems.

Lawrence Woriji Verified

Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.

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