Binance CEO CZ Forecasts DeFi Outgrowing CeFi in The Next Bull Run

Binance CEO CZ Forecasts DeFi Outgrowing CeFi in The Next Bull Run – Binance CEO Changpeng “CZ” Zhao envisions decentralized finance (DeFi) outperforming centralized finance (CeFi) in the upcoming bull market. CZ, the CEO of Binance, expressed his belief that the cryptocurrency sector will improve with increased decentralization during a live X Spaces event titled “CZ AMA” on September 1st. 

In this space, CZ discussed his perspective on the future of DeFi. “I think the more decentralized the industry becomes, the better,” he declares, adding that it may not be long before it takes over CeFi trading volumes: “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.”

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Reports from June 9 revealed that after the United States Securities and Exchange Commission (SEC) took legal action against centralized exchanges Coinbase and Binance, there was a remarkable 444% surge in median trading volume across the top three decentralized exchanges (DEX) within just 48 hours. As of the time of this report, DEXs collectively achieved a 24-hour trading volume of $722,776,226.

CZ also shared his thoughts on the recent dismissal of the lawsuit against the decentralized protocol Uniswap, stating, The positive and rational outcome of the Uniswap case is very encouraging and clear. On August 30, a US federal court dismissed a class action lawsuit against Uniswap, its CEO, foundation, and venture capital supporters. 

The lawsuit had been filed by plaintiffs who claimed to have suffered losses due to fraudulent tokens on the decentralized cryptocurrency exchange. The judge’s decision was based on the inability of both parties to identify the scammers and underscored how regulatory uncertainty can diminish investor protection.

“They now sue the Uniswap Defendants […] hoping that this Court might overlook the fact that the current state of cryptocurrency regulation leaves them without recourse.” In the session, a participant known as “X user” brought up the judge’s ruling that developers cannot be held responsible for misuse on a DeFi platform, which this user perceived as favorable news for DeFi developers. 

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CZ concurred, expressing his support for increased industry protection as a positive advancement. “Developers writing code, that code is free speech. So the development is really good,” CZ stated. Recent data shows a shift in venture capital funds from CeFi to DeFi projects. In 2022, digital asset investment firms increased their investments in DeFi to $2.7 billion, a 190% rise from 2021, while investments in CeFi projects fell by 73% to $4.3 billion during the same period, as reported by CoinGecko on March 1.

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