The Binance meetup was held yesterday in London, the first in the English capital to discuss the news of the exchange and ask questions to CEO Changpeng Zhao.
Mariana Gospodinova, Binance‘s Chief Operating Officer Europe, is the first to take the floor. She also explains the reason for a London meetup: “London has more cryptocurrencies per capita than Switzerland“.
After a quick introduction of Binance Jersey, a fiat-crypto exchange for EUR and GBP regulated in Jersey that has 0% fees for deposits and withdrawals, finally CEO CZ takes over.
Despite the many technical problems with audio and microphones, CZ responds to the questions of the various journalists who had sent their questions through a dedicated form, appearing very humble and also available to answer questions from the audience in the room.
Here is a summary of the most interesting questions and answers.
What is the plan around Binance DEX? Will DEX dominate the centralised exchanges?
I certainly hope that Binance DEX will one day dominate all the centralised exchanges, including Binance.com. I personally think that is the future because it is much easier once you learn how to use a DEX. Today a very large number of people still don’t have a hardware wallet, if you used our Binance DEX you do that with a hardware wallet plugged into a computer and you can trade on Binance DEX, and you know 100% that your private keys are not owned.
So I think that’s the future, there’s no concept of accounts, which actually reduces the costs of an exchange platform because it simplifies the process. It is a little bit riskier if you don’t know how to protect yourself, if you end up on a phishing site and send money away then it’s gone forever but I think people learn to protect themselves in those kinds of regards, I think that will be the future.
Currently, the UN recognises 180 world currencies, do you think there will be 180 cryptocurrencies in the future or just a couple of them?
I have a very different view on this, I think there will be probably millions of cryptocurrencies, the way I see it, there is probably going to be thousands of blockchains, different types of blockchains, each one of them probably specialised to their applications. I’m not a maximalist thinking that one blockchain will serve as everything, I’m not against those type of guys but my view is there will be different blockchains for different things.
This will generate millions of tokens because there are a lot of projects that need a token and don’t really need a blockchain, Binance token up until very recently was just a token, and we were successful just using a token model, I think in the future anything can be tokenised, any country will issue a token, any province, any state will issue a token, any organisation will issue a token, any project, any person, any thing can issue a token. I think there will be millions and millions of tokens and exchange will be quite busy.
How about stablecoins, will they increasingly be used instead of fiat currencies? Why?
I do believe that and I think that at one point there will be more users of stablecoins than paper money or the fiat version of it. Today I don’t carry any fiat money on me at all, when I crossed the border they guy asked me, “Hey do you have any cash on you?”, “No, nothing”, he’s like: “Less than 10k?”, “Nothing, I don’t carry cash”. So the stablecoins do have a few advantages even though they’re still pegged to fiat currency, once they’re issued on the blockchain, it’s much easier to transfer for example from the UK to China, to Japan, to the United States.
I think Binance.com was one of the earlier ones to support USDT, which made its liquidity grow. It’s a chicken and egg problem, stablecoins solve problems that we have with traditional fiat, if you try to deposit or withdraw through a bank, it’s a lot more difficult, so even though we are working through SEPA and other European banks, it is sometimes more difficult to do then using stablecoins. Binance.com got popular, reaching number 1 in terms of most popular exchange jus by supporting a couple of stablecoins.
So I think eventually more and more people will get used to that, the stablecoins today are still not so good, to be honest, they still have deficiencies, but over time we will see more and more stablecoins, and with more choices, the quality will get better.
What would you say to President Trump if you met him in person?
I’m pretty sure that after he retires he will get into crypto because right now he’s in a position that he should not promote crypto over the US dollar, I’m guessing that’s the case. But I think President Trump is a very smart businessman, I think he’ll get into crypto.
Are IEOs just a cash grab for Binance or do you think the model has a long term sustainability, will it be around in 5 to 10 years?
So for IEOs we actually don’t get very much, so it’s not like we grab some tokens and we try to sell them ourselves, so we don’t get involved in that. We have Binance Labs which sometimes invests in those projects as well, but when we invest our lockup period is much longer than the retail investors.
So in some cases we pay the same price as retail investors, in some cases we get a slight discount, somewhere around 10 to 20% discount, but we have a lockup period of 6 months, 1 year or 18 months, so we think that’s kind of fair. In some instances, you can say why are we investing and facilitating the launch, but we’re not selling the tokens we invested in right away. The other way to look at it is we’re actually putting money where our mouth is, so we are actually investing ourselves, and we are unable to cash out very quickly.
So I do view IEOs as having a number of advantages over ICOs, ICOs involve somebody just claiming they are going to do something, they get retail investors to invest in them directly, with IEOs, the exchanges have to do the betting, this is the reason why we can only do 1 project a month, ti takes that much time or longer to do the due diligence, to get all the questions in, it actually takes 3 to 4 months.
A number of the project that went through our IEO are here, they know that some projects take 6 months or more, we ask very detailed questions, and as an exchange we can ask much much more detailed questions than a retail investor could, so retail investors could ask a question in the Telegram group and they may or may not get an answer, they probably would not get a very detailed answer, whereas we will schedule a meeting with the project team, saying: “Look we need this type of information going back a year, etc. etc.”, so we can do that kind of due diligence, and we have the leverage to do that, because Binance as a brand gives the project credibility, liquidity, user base etc. we have that advantage. And also from our perspective, Binance is not short on cash, so we’re not trying to grab cash and make a couple of million dollars, we make much more on trading fees.
Our interest is that we want Binance to be here in the long term, so we don’t want those projects to be exit scams for the projects or for ourselves, the IEOs raise very small amounts of money compared to the money we have, they raise like 3 million dollars or somewhere around 8 million dollars, all of them less than 10 million dollars, we’re not interested in making that kind of quick money at that small scale, to be honest.
If you look at our quarterly revenue, our quarterly revenue is 100 million dollars, so we’re not interested in ruining our reputation for a couple of million dollars, so it doesn’t make sense for us to be a money grab, this is why the Binance team is very selective on projects and even after the launch we keep in touch with the projects, we promote them, we invite them here to do talks, so we want them to be successful, but the number one thing we want them to do is to develop the product. IEOs are very different from ICOs.