Changpeng Zhao, CEO of cryptocurrency exchange Binance, evaluated the remaining quarter, DeFi and the cryptocurrency market in a blog post after BNB completed its 13th burn.
Zhao stated that DeFi has greatly helped the industry grow during the quarter we left behind. Stating that the increasing number of cryptocurrencies locking in liquidity pools made the prices of crypto coins more resistant to negative news, the CEO said, “We experienced a series of bubble bursts, rug pulls, price drops or whatever you call it this quarter. This is an important reminder that in a decentralized world you must always be alert and learn to protect yourself. ” used the expressions.
“Annual returns in DeFi will return to a reasonable range”
Liquidity pools, automatic market makers, on-chain loans etc. DeFi brought to the cryptocurrency world. Emphasizing that many fundamental innovations will be permanent, Zhao said, “The high returns will not last that long. The numbers will revert to a reasonable double or single-digit range over time. ” says.
As Zhao pointed out, the DeFi industry has experienced dramatic growth in the past few months. Numerous new DeFi platforms have emerged, and some of them have reached key-value heights. There were protocols that yielded returns as much as multiples of the deposited amount. On the other hand, these have been compared by many experts to the ponzi scheme. Sometimes there were scandals like Eminence.
Zhao once again reiterated that he believes DeFi will overtake centralized exchanges in the long run. The CEO, who thinks that this will not happen immediately for some reasons, said the reasons for these are the low number of active users in DeFi, even though the locked value is high, 99.9 percent of the world’s wealth is in fiat currencies and the fiat bridges of central exchanges are still needed to bring them into the crypto world. listed in the form. Zhao added that not everyone has enough technical knowledge to use DeFi at this stage, and centralized exchanges are easier for most people. The CEO believes this will be overcome over time.
Finally, Zhao said that he expects the bubbles to burst at DeFi in the coming months, believing there will be more ‘rug pull’ and more exit scam incidents.