Changpeng “CZ” Zhao, the CEO of Binance, has expressed his bullish outlook on the future of decentralized finance (DeFi) during an exclusive interview on X Space. He believes that the upcoming bull run in the crypto sector will give DeFi a competitive edge over traditional finance (CeFi).
CZ shared a comprehensive report outlining his vision for the success of DeFi, emphasizing the benefits of decentralization in the financial sector. He expects that DeFi transaction activities will soon surpass those in CeFi, which currently accounts for 5% to 10% of trading volume.
The Binance CEO believes that DeFi is the future of the financial sector and referenced a recent court ruling dismissing a lawsuit against Uniswap as a sign of progress. The lawsuit was filed by six individuals who claimed to have purchased Uniswap tokens in a scam and blamed Uniswap for controlling liquidity pools, including those owned by scammers.
Judge Katherine Polk Failla, who presided over the case, stated that neither Uniswap nor the affected investors could identify the scammers. She also noted the lack of regulatory clarity on digital assets, which limits investor protection. However, she demonstrated a deep understanding of DeFi operations and emphasized that developers cannot engage in activities that might lead to the misuse of DeFi.
CZ praised the efforts of DeFi developers and their creative communication style, which often relies on free speech. He acknowledged that DeFi has produced positive outcomes but urged developers to explore ways to safeguard the DeFi ecosystem.
A recent study highlighted the increasing investment in DeFi projects by venture capitalists, with over $2.7 million invested in DeFi projects. In 2022, DeFi investments surged by 190% compared to the previous year, while CeFi investments experienced a 73% decrease, reaching a total value of $4.3 billion in 2022. This shift suggests significant growth in the crypto sector and potential saturation in the CeFi market.