Binance plans a corrective course to battle magnifying DeFi
Zhao, the CEO of Binance admits the paradoxes inherent in striving to tap into the strong-growing business of DeFi, while trying to protect his firm’s supremacy as the planet’s biggest STO cryptocurrency platform. The firm’s new incursion into Decentralised Finance, Binance Smart Chain, bids to imitate few Ethereum blockchain’s features that have upheld bountiful for developers making decentralized blockchain-centred trading and loaning apps that supposedly could contest fiat lenders and stock trading companies. But DeFi could also intimidate large security token companies and exchanges like Binance too.
Similar to its adversary crypto exchanges Huobi, OKEx and Coinbase, Binance is attempting to grasp its key role in digital assets industry as DeFi projects like SushiSwap, Uniswap and Curve lure a greater share of exchange volumes. Zhao claims Binance might have to alter its current business model to remain relevant as collateral lodged into DeFi protocols soared 16-fold in the current year to a whopping $11 billion. Zhao said that Binance is not gunning for a centralized finance as DeFi supports our growth. But in the long haul, we have to thrust decentralization.
In developing Binance Smart Chain, the firm had to forgo components of decentralization to parallel against ETH and defend its brand. 21 node operators regulate Binance Smart Chain, that are chosen by investment tokens BNB Coin holders. But since the firm is the biggest BNB token holder, it holds a large domination over the project’s roadmap.
The trade-off between increased decentralization against pace resulted in developing the 21 nodes strategy. These are operated by the community itself. Binance Smart Chain does not aim is to be known as the Ethereum Killer but instead offer an option to consumers and developers upset with ETH’s rising transactions charges. Individuals who rely more on decentralization will stay with ETH chain.
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CBW - External Analyst