Changpeng Zhao spoke about his attitude towards DeFi and the Ethereum 2.0 project

Zhao believed that Vitalik Buterin “bit off too much to chew” when the latter told him about Ethereum in 2015. However, according to the head of Binance, the developer was able to prove that he wasn’t right then.

Changpeng Zhao believes in DeFi, but is still skeptical about the possibilities of Ethereum 2.0. The head of the crypto currency platform Binance spoke about this in an interview with the industry portal Cointelegraph.

Zhao believes that the rise in popularity of DeFi is explained by the pricing policies of automated marketmakers. The latter strive to maintain a constant ratio of various assets in the liquidity pool. Zhao noted that this works especially well for stablecoins, which “should by definition remain stable.”

“This type of [pricing] with automatic market shaping has a strong advantage because it is very transparent. If I lose money, I know why this happens, ”Zhao said.

Many believe DeFi projects pose a threat to centralized cryptocurrency exchanges, Zhao said. However, Binance is “committed to driving innovation,” which is why it is aggressively adding DeFi tokens to its listing. The idea is to integrate decentralized finance into a centralized space.

Among the decentralized exchange projects, Zhao noted the Binance SmartChain blockchain and the Binance Liquid Swap automated market-making pool. He also emphasized that the company’s target customers are newbies, so Binance is trying to simplify the interface of its products and offer less risky ways to interact with DeFi tokens.

Zhao does not rule out the emergence of an economic bubble in the DeFi market, as it was with the ICO in 2017/2018. However, even after the bubble bursts, he said, the concept that boosted it will remain viable. As an example, he cites ICOs, with the help of which many companies still raise funds.

“And while I think most ICOs have failed, there have been a few successful projects, one of which is Binance. We launched an ICO, thanks to which we managed to build a rather strong company. There are other successful examples as well. I believe it will be the same with DeFi, ”Zhao said.

Zhao also said that he has high hopes for the Ethereum 2.0 project, but believes that it will take a long time before the network works exactly as it should. Zhao noted that he underestimated Vitalik Buterin, believing that he “bit off too much to chew.” However, the developer was able to prove him wrong by launching the first version of Ethereum.

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