DeFi ecosystem may be on its way to surpassing CeFi.
Changpeng "CZ" Zhao, the crypto exchange Binance CEO, has made a bullish projection that decentralized finance (DeFi) could soon pass its centralized counterparts (CeFi) in trading volumes, especially during the forthcoming cryptocurrency market uptrend.
Speaking in a virtual conversation through X Spaces on September 1st, CZ articulated his belief that the cryptocurrency landscape is becoming more decentralized. Praising this change, Zhao claimed that "the more decentralized the industry becomes, the better."
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During the same discussion, he provided insight into the potential of DeFi surpassing CeFi in terms of trading volumes, asserting:
DeFi is the future; the volume is somewhere between 5% to 10% of CeFi volumes, which is not small right <...> the next bull run may very well make DeFi bigger than CeFi.
Earlier this summer, the United States Securities and Exchange Commission (SEC) initiated legal actions against major centralized exchanges Binance and Coinbase.
Subsequently, trading volumes on the three leading decentralized exchanges surged by an astonishing 444% within two days. As of the latest data, the combined 24-hour trading volume on decentralized exchanges stands at approximately $722 million.
It is worth noting that the interest in DeFi firms started growing back in 2022. The report shared in March 2022 revealed a 190% surge in DeFi investments, totaling $2.7 billion.
On the other hand, investments in centralized finance projects plummeted by 73% to $4.3 billion, possibly indicating that the CeFi space may be reaching a saturation point.
The DeFi space is experiencing substantial growth, catalyzed by regulatory actions against centralized entities and a supportive judicial climate. As venture capital shifts its focus towards decentralized platforms and trading volumes on decentralized exchanges rise, it appears increasingly likely that CZ Zhao’s prediction may come to fruition.
