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Cryptocurrency insiders are paying close attention to Changpeng “CZ” Zhao, the CEO of Binance, as he voices strong support for the future of decentralized finance, commonly known as DeFi. In a recent live X Spaces session, CZ expressed optimism that DeFi is poised to outperform centralized financial systems, known as CeFi, in terms of trading volumes.
According to CZ, DeFi's trading volume is already notable, ranging from 5% to 10% of what CeFi platforms manage. He emphasized that the next upward market cycle could tip the balance in favor of DeFi.
CZ's statements come on the heels of increased trading on decentralized exchanges (DEX), especially after regulatory pressures from the U.S. Securities and Exchange Commission were applied to centralized platforms like Coinbase and Binance. A reported leap of 444% in trading volume within 48 hours on the top three DEX platforms signaled growing interest in DeFi. Currently, the 24-hour trading volume on these platforms stands at $723 million.
A U.S. federal court's recent decision to throw out a lawsuit against decentralized protocol Uniswap further strengthens CZ's outlook. The lawsuit alleged losses incurred due to scam tokens on Uniswap's platform, but was dismissed due to both parties' inability to identify the scammers. This outcome, according to CZ, offers a reasonable, logical, and clear path forward for the industry.
During the X Spaces conversation, CZ agreed with an audience member that the ruling was a positive step for DeFi developers. The court recognized that developers cannot be held responsible for misuse of a platform, marking an important milestone in establishing the legality of decentralized platforms.
Beyond DeFi, CZ also touched on the urgent need for cryptocurrency adoption worldwide. He noted that while developed countries may not perceive immediate necessity, lagging behind could make room for others to outpace them in financial innovation.
Zhao’s comments underscore the shifting tides in the financial landscape, with decentralized systems gaining momentum and likely to catch up with or even surpass centralized platforms in the near future.
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