CZ and SBF tear down each other exposing the dilemma of the CEX competitive landscape

In the past two days, Changpeng Zhao (CZ) and Sam Bankman-Fried (SBF) have scolded each other and dismantled each other on social media, attracting the attention of a large number of crypto players.

In fact, many details of the confrontation between the two are a war of words, and the key information is nothing more than whether FTX’s operating conditions and capital are as CZ said, and there is a huge existential risk. Because the cases of Three Arrows Capital and Luna plummeting first, it is inevitable that everyone will panic.

In addition, the complex relationship between Binance and FTX has also made everyone talk about it. Because FTX was born at the beginning, it received early investment from Binance. Now that the situation has reached this point, it can be understood that Binance has supported FTX with one hand and wants to destroy it with one hand.

Why did Binance kill FTX at this time? In fact, it is very simple, looking around the exchange track, the players who pose the biggest threat to Binance’s leading position are currently nothing more than OKX and FTX. Let’s start by comparing ourselves to other players.

Coinbase’s success and failure to go public are also a constraint for it to enter the capital market, and the contract and leverage business that truly creates the largest source of revenue is completely limited, making its scale unable to expand;

Huobi has recently attracted much attention because of Justin Sun’s high-profile entry, but recently it has been overshadowed by a series of vicious incidents, and the user reputation that has been accumulated has been lost, and it is still unable to face Binance in the short term;

Although a series of second-tier small firms such as matcha, Gate, and Kucoin have survived tenaciously in the past year and have made many gains in their respective areas of expertise, after all, they are small in size and cannot convert huge user dividends under the bear market, so their first priority is still to wait for changes in such markets.

Although OKX occupies the innate advantage of the Chinese-speaking circle, its layout in overseas markets lags far behind Binance, which can be seen from the daily trading volume. The gap between the two is equivalent to an international giant against a local trump card, and the volume is completely unequal. More importantly, OKX’s public chain ecology has not improved much so far, which is very different from Binance’s BSC public chain.

The BSC public chain has been able to form a virtuous ecological cycle with the Binance trading platform, which is a powerful enhancement loop, and can even transfuse blood for the platform in a bear market, and a number of developers with poor financial strength even regard BSC as the primary carrier of Dapps, which once overshadowed ETH. In short, OKX cannot touch Binance’s weakness.

So, the reason why Binance vigorously encircles FTX, CZ even tears its face to scold SBF on social platforms, indicating that the latter’s core advantages over Binance must be replicable. This reproducibility is divided into three aspects:

1. Solana public chain is comparable to BSC in terms of ecological scale, user experience and technology iteration, and even in a partial leading position, which makes Binance feel like a pin-and-needle;

2. FTX has a clear dominant position in the North American market, and has sponsored sports events many times throughout 2022, brand awareness can compete with Binance, and the regulatory pressure from Europe and the United States is weaker than Binance, and the policy anti-risk ability is stronger;

3. FTX has always maintained a catch-up posture in terms of the completeness and experience of the transaction-side products, which makes Binance feel uneasy.

After sorting out these points, we can roughly understand why CZ does not hesitate to put down his body to expose the shortcomings of SBF and put the other party in a catastrophe. Because the biggest challenger to Binance’s number one transaction is FTX. And it just so happened that the foundation was far inferior to his opponent, and there was a financial loophole during the bear market, which also gave CZ a good time to fall into the ground.

Finally, it is not difficult to see that under the bear market, the competition of the exchange has also entered a situation of doing everything, and in order to compete for the few stock markets, each company has laid down all the previous rules and regulations, just to make themselves more chips in the downturn. It may not wait until the next bull market comes, and the monopoly position of the next king will be more stable.

Posted by:CoinYuppie,Reprinted with attribution to:
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