Binance CEO Justifies Centralized Cryptocurrency Exchanges
We had reported on July 8 that Vitalik Buterin, co-founder of Ethereum network, had called out centralized exchanges in an interview with Jon Evens at “TechCrunch Sessions: Blockchain 2018“.
While the criticism is not directed at any particular exchange, Changpeng Zhao, the CEO of Binance took it personal and explained his stance regarding centralized exchanges. The lengthy response clearly reflected his displeasure over Buterin’s use of harsh words.
CZ begins by saying that he was several times asked for a comment about Buterin’s “burn in hell” curse on centralized exchanges and that made him to respond.
The CEO of Binance justified that centralized exchanges are also part of the blockchain and cryptocurrency ecosystem. Therefore, critics and everybody involved with cryptocurrency should “have a bigger heart”. Regarding the “burn in hell” statement by Vitalik Buterin, CZ stated
I would not wish “burn in hell” on anyone or anything. That’s just not a nice thing to say, even if it was said by Vitalik.
The CEO pointed out that the cryptocurrency industry would not have risen so high without the presence of centralized exchanges.
if it was not for fiat (and centralized) exchanges, the industry would be smaller and the industry would develop slower.
To Buterin’s forecast that decentralized exchange will only become more popular in the months ahead, CZ had answered that 100% decentralization does not exist. Further, CZ mentions that a ‘decentralized’ system does not guarantee ‘safety’ by default.
To strengthen his argument, the CEO of Binance also reminded how Ethereum DAO (Decentralized autonomous organization) was hacked, leading to a hard fork of Ethereum chain. He further explained that exchanges such as Coinbase and Binance provide the much needed liquidity to the nascent industry, making it easy for retail investors to enter the industry in a hassle free manner.
CZ also argues that efficiency and adoption rates are the most important factors and if centralized exchanges are required to achieve the objective, then let it be so. However, CZ avoided giving reply to allegations of exorbitant high listing fees. But in an interview with Ran Neu Ner of CNBC Africa, the CEO of Binance explained the listing process.
We don’t negotiate and we don’t ask for a price. When a project team submits an application, they will tell us what they want to pay. And you can say zero ($), which we may accept and we have listed coins that say zero. However, there’s a sweet spot for the money you pay. If it’s too high, then we actually get worried…. But we list coins for a fairly low fee
There is no clear estimate of how much Binance charges for listing. However, speculative figures peg the fee at $3-$5 million range. Notably, Binance is planning to setup its own decentralized exchange, named “Binance Chain.” During the interview with CNBC Africa, CZ had stated about Binance Chain project as follows:
I believe that decentralized exchanges are the future. I do not know when that future will come, so again, I think we are in an early stage for that. I don’t know whether it’s going to be a year, two years, three years, five years, I don’t know, but we have to be ready for it. So we’re now actively investing our efforts and time into it. We have a dedicated team working on this, and I hope to see a prototype within the next couple of months