Okex CEO Calls CZ Actions Irresponsible for Abusing Users’ Trust
Binance creates “innovation zone” only for select users to trade DeFi tokens.
Last week, the DeFi BakerySwap protocol launched on the Binance Smart Chain (BSC) blockchain generating excitement for its high rate of return. But the party was short-lived. Just an hour after launch, your token BAKE, it collapsed losing 99% of its value.
Five months ago the exchange cryptocurrencies, Binance announced the development of its blockchain of smart contracts, compatible with Ethereum. Since then he has openly stated his intention to set your chain as supplier to interconnect multiple DeFi projects. So since September 10 it has been introducing new protocols.
Taking advantage of the meme-based food token craze, the first protocol released on BSC was BurgerSwap. Later it was TunaSwap, Cream and ForTube, whose tokens they have lost value. On September 14, Bakery, an automated market-making (AMM) DEX that generated large losses in users who believed that the dough had enough yeast for the hot bread to bring them profit.
Right after its launch, the token’s annual interest rate soared to 1,457,349.58%, enthusing everyone with its promise of “hot cakes” around the clock. At that moment, Changpeng Zhao (CZ) tweeted “has caused quite a stir”, referring to the launch of the project. But, an hour later, everything had changed and the token BAKE posted a 99% drop, with hundreds of users losing 90% of their investment.
At BakerySwap once users get liquidity, they can extract the token BAKE, native to the platform. When the protocol was launched, the price ratio of BAKE to BNB was approximately 1: 1. Initially, 400 BAKE were released per block and in just 12 hours, the amount of tokens in circulation exceeded 6 million, reaching a high annual interest rate.
However, in less than 10 minutes, the price of BAKE fell rapidly. An hour after launch, annualized revenue had plummeted. At 12 o’clock on September 15, the price ratio of BAKE and BNB had fallen to 1: 100, according to media Chinese who have followed up on the case.
After the crash, CZ deleted the message in which he referred to the momentum that the token was taking. Interestingly, the token no this visible in the information service on the cryptocurrency market and tokens CoinMarketCap, also owned by Binance. However, a Tweet from the project account it indicates that the current price is less than a dollar.
Binance’s DeFi Banquet indigestible to many
Following the crash of the BAKER token, a user manifested on Twitter: “I’ve never seen a project go down so fast,” and then he didn’t forget to “bless Binance good luck.”
Also OKEx CEO Jay Hao tweeted on the collapse of BakerySwap, reminding DeFi ‘farmers’ to be’ careful when farming on Binance Smart Chain. As I said, is managed by a single team and is not decentralized. Based on BSC, BakerySwap caused huge losses for many retail investors 12 hours after mining started, sparking protests against BSC in China and elsewhere, ”he noted.
Hao added that the financial loss of users is the result of placing blind trust in Binance and for this reason he called on the company to stop what it considers to be a hoax. “Build a real DeFi,” he said, referring to CZ.
According to Hao, “CZ’s behavior is irresponsible”, it will be detrimental to the cryptocurrency ecosystem and delay the development of the DeFi industry. He added that even though Yi He, head of marketing of Binance, states that projects in BSC must pass all security audits, the token BAKE went under, after which CZ deleted his approval tweet from BakerySwap, just as he did with SUSHI previously, Hao said.
Binance will select users to enter the DeFi risk zone
Binance firm announced an “Innovation Zone” on Monday that appears to be related to its recent experience in the DeFi sector. His idea is to evaluate and select users who will have access to the exchange of new tokens decentralized finance.
In a statement published on its official blog, the company indicates that it will evaluate users based on determining their appetite for risk. To do this, you will ask two questions before granting access to the so-called innovation zone.
The first question users must answer is if they are ready to take 50% or more of the loss of their principal. The second query aims to know if the user is ready to take responsibility for that loss. If the answers to these questions are negative, then the user will not be able to exchange the new ones tokens DeFi that Binance would include in the near future.
“In order for exchanges to remain competitive, we need to list popular currencies,” Binance CEO said. As always, DYOR (do your own research). Some of the projects can work incredibly well, but most probably won’t, ”CZ recommends.
Losses are frequent in the DeFi ecosystem, especially since most projects are experiments and many are not properly audited or have been developed with the simple objective of making quick profits and disappearing. New projects emerge every day, as CriptoNoticias has reported, some of them seek to convince people to deposit and believe in their promises, only a few are serious projects, while others can disappear without a trace.