Binance Rolls Out $100M Fund to Bring DeFi Developers to its Smart Chain (BSC) Platform
- The world’s largest cryptocurrency exchange, Binance, is entering the raging decentralized finance (DeFi) ecosystem aiming to take over the market.
- The centralized exchange will control the listings and governance of the platform – a case of CeFi taking on DeFi.
Binance announced a $100 million development grant in a bid to entice DeFi developers to build on its newly-launched smart contract platform, Binance Smart Chain (BSC). CEO Changpeng ‘CZ’ Zhao made the announcement during the company’s World DeFi Summit this Thursday, stating the platform will provide ‘a bridge’ between the centralized and decentralized worlds of crypto.
The platform will provide a direct link between Binance.com exchange and the Binance Smart Chain allowing users to access DeFi products without leaving the exchange directly. Binance Coin (BNB) holders will also be able to participate and have more rights in the governance of BSC by staking on the chain.
The Binance community members will be in charge of distributing the funds with a maximum of $100,000 offered to each team.
The team will use their IEO criteria used on platforms such as Binance Launchpad and Binance X to select promising projects. The centralization aspect of the new platform has irked parts of the crypto community but has also received its fair share of praise – majorly due to Ethereum’s high gas fees.
At this point does ETH really have anything to offer new projects, besides the world's highest fees? I understand the Polkadot and some other projects are planning / already have similarly easy migrations, although they don't have Binance money being thrown at them.
— Riccardo Spagni (@fluffypony) September 11, 2020
A New Centralized DeFi platform
According to CZ’s explanation posted in a short thread on Twitter, the new-look centralized DeFi will offer users a couple of advantages over sticking to DeFi.
2 advantages CeDeFi offers:
— CZ Binance (@cz_binance) September 10, 2020
First, the exchange will vet the tokens that will trade and transact on the BSC, managing the risks involved in scams. However, he maintains the vetting may not prove sufficient “and sometimes may even be negative (depending on the CEX), he stated. “But a reputable CEX is financially incentivized to maintain it.”
Finally, users who stake BNB on Binance will be able to earn different yields on multiple projects simultaneously. This is different from DeFi whereby you need to stake on different protocols to earn their yields.