Patrick Hillman, Binance’s chief strategist, says that the centralized version of the crypto exchange may no longer exist in 10 years. The director of huge bitcoin (BTC) exchange is convinced that the market is moving more and more towards decentralized finance (DeFi), he reports Coindesk.
The trust of the crypto customer
For now, Binance is trying to maintain customer trust through Proof-of-Reserves, among other things. That is one way the exchange can theoretically prove that it holds all of its users’ funds. Incidentally, Binance did receive some criticism from Kraken about the way it does that.
According to Kraken CEO Jesse Powell, it is not enough to just show your own wallets. The debts and funds of users must also be in balance to demonstrate that you are in good financial health as a trading platform.
“It is a multi-step process, which includes involving a third party to check the books. It takes time to conduct an audit on a scale that is necessary for a company like Binance.”
According to Hillman. At the moment we don’t really know exactly how Binance is doing.
Binance bigger than the New York Stock Exchange
Hillman adds that he has “confidence” in the company’s reserves, despite Binance choosing not to disclose the company’s accounts. At the moment, it implements a so-called Merkle Tree analysis, which allows users to verify their assets on the platform.
“Binance is bigger than the New York Stock Exchange, the London Stock Exchange and the Tokyo Stock Exchange combined,” says Hillman, who also admits that Binance feels a little embarrassed that it is just now starting to implement Proof of Reserves.
It’s nice that Hillman admits that, because it is indeed strange that the largest party in the industry is not transparent. So let’s all hope that Binance’s books are in order, otherwise things could get very dark for the industry.