CZ’s Explanation of Binance Listing SUSHI: With Innovation Comes Risk
The events of the past days shook the DeFi space in a way that no other project did this year. The lead developer of the project dumped all of his token on the market, crashing SUSHI’s price by over 50%.
After that, he transferred the control over the protocol to FTX’s CEO and the price bounced by almost 200%. It’s no doubt that these kinds of swings are likely to be only possible in the crypto field.
However, the community also took it upon itself to largely criticize Binance for listing SUSHI, despite the apparent flaws in its overall design. Here’s what CZ had to say about it.
CZ: With Innovation Comes Risk
Binance is the world’s leading exchange when it comes to registered users and volumes. It’s also regarded as the safest one. The team has outlined, on multiple occasions, that they have a very scrutinous listing process, supposedly making it hard for new tokens to access the exchange’s userbase.
Last week, however, Binance listed SUSHI – the governance token of the Sushiswap platform – a protocol designed as a fork of Uniswap with an added reward mechanism – the SUSHI token.
It turned out, though, that the lead developer was the sole authority having access to millions of SUSHI tokens that he could have dumped at any moment, which he did. Yesterday, as CryptoPotato reported, Chef Nomi dumped all of his tokens, cashing out millions worth of ETH and dumping the price of SUSHI by more than 50%.
This caused a lot of people to blame Binance for listing it, despite its obvious flaws.
Speaking on the matter was Changpeng Zhao, CEO at the exchange, who said:
As one of the leaders of the space, we support innovation. With Innovation comes the chance of high reward, and high risk. Some projects make it to the moon, while some fall short. Always manage your risk accordingly.
He also spoke of the advice he has historically given to people.
In crypto winter, I tell people to HODL. When things are hot, I tell people to be super cautious. I still get heat whenever something go south. I will take the heat.
It just hurt to see people getting rekt, and still not managing their risks.
— CZ Binance (@cz_binance) September 6, 2020
Binance Doubles Down on DeFi
Elsewhere, Binance also launched Launchpool – a product that allows users to acquire new token rewards for staking BNB, BUSD, and other tokens.
The first project is already announced and it’s Bella Protocol (BEL). Users can already stake their BNB, BUSD, or ARPA tokens to farm BEL and the reward program will start on September 9th lasting for one month.
According to the official release, “BNB staked into Launchpool will still provide users with the standard benefits for holding BNB, such as airdrops, Launchpad eligibility and VIP benefits,” giving one more way for BNB holders to earn passively on the cryptocurrency they hold anyways.
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