Binance CEO Changpeng “CZ” Zhao believes that decentralized finance (DeFi) is destined to overtake centralized finance (CeFi) during the next bull run. During an X Spaces live session dubbed “CZ AMA” on Sept. 1, he remarked that “the more decentralized the industry becomes, the better.” At present, trading volumes for DeFi are between 5-10% of CeFi, however, Zhao believes that “the next bull run may very well make DeFi bigger than CeFi.”
Indeed, Cointelegraph reported that, following legal action taken by the SEC against Coinbase and Binance, the median trading volume on the top three decentralized exchanges (DEXs) surged by 444% in a two-day period. As of the time of publication, the 24-hour trading volume on DEXs was $722,776,226.
CZ also shared his views on the dismissal of a class-action lawsuit against decentralized protocol Uniswap. He described it as “extremely positive, extremely reasonable, logical and clear,” noting that the dismissal was due to the fact that the plaintiffs could not identify the scammers. The judge further stated that regulatory uncertainty leads to reduced investor protection.
Venture capitalists appear to be reallocating funds from CeFi projects to DeFi projects. CoinGecko’s March 1 report revealed that digital asset investment firms invested $2.7 billion in DeFi projects in 2022, a 190% increase from 2021, while investments in CeFi projects dropped by 73% to $4.3 billion in the same year. The report suggested that this could be because the CeFi sector may have reached saturation point.
Altogether, CZ’s prediction and the report’s findings are strong indicators that DeFi is the new high growth area for the crypto industry.
