„We believe that centralized brokers are like a DVD version of Netflix,“ said the entrepreneur.
The LA Blockchain Summit is being held online, where different experts from the decentralized sector have given lectures. One of them was Changpeng Zhao, the CEO of Binance, who said that DeFi will replace Centralized Finance. In addition, „CZ“ also stated that Binance is studying ways to no longer be a centralized broker in the future.
According to Decrypt, CZ’s participation in the LA Blockchain Summit showed that the entrepreneur is very positive about the future changes in the cryptomaniac market, but still understands that DeFi has a lot to evolve before it becomes the industry’s main method.
„In the long term, I think DeFi will replace CeFi (Centralized Finance)“.
For Changpeng, the concept of being able to lend, borrow, and earn at interest rates without the need for a financial institution as an intermediary is something that will eventually become popular.
And of course, as Binance is a centralized service, that also means Binance needs to change its system in the future. But in this regard, CZ says it is happy to know that DeFi will „cannibalize“ the brokerage house in the future. He compared this future transformation to what happened with Netflix and Kodak.
„We believe that centralized brokers are like a DVD version of Netflix.
It is not our ultimate goal.
So even if we have one of the largest centralized exchanges in the world, it’s not something we want to maintain.
We are more interested in innovation“.
Note: At the beginning of its life Netflix operated with movie rentals via physical DVDs sent by post. This model worked for a few years before they evolved into a digital streaming system, ensuring the success of the company while physical rental companies went bankrupt.
Changpeng also compared the market with Kodak’s history, stating that brokers need to avoid the error of the old movie giant. Kodak invented digital cameras, but instead of adapting to this new technology, it tried to hide it and in 2012 the company, which was one of the largest in the world, declared bankruptcy.
DeFi market still needs to mature, says Binance CEO
Despite being optimistic and very receptive to the new decentralized financial market, Zhao acknowledged that DeFi needs to find a more stable path in relation to the numerous projects that are emerging.
DeFi, according to Binance’s CEO, brings a lot of power in the form of its liquidity pool, but the current model that promises surprising returns for lenders, with CTRL C – CTRL V projects emerging every day, is not something sustainable.
Translated with www.DeepL.com/Translator (free version)