Hello and welcome to another article.
Recently, BINANCE fanboy (and owner), CZ announced that BNB is DeFi. This led to a 6% pump on the coin, and for a coin with such a high market cap and even higher trading volume, that's no mean feat.
However, here's why I think that's definitely a scam. Not a "scam" as in actual steal your money scam, but just a way to try to lure others into buying more BNB.
There are a lot of things wrong with BNB, and that's for another post, however, this is probably the most selfish thing to come out of CZ's stables.
First, what does being DeFi mean for BNB? Apparently nothing to be honest. BNB doesn't solve any problems in the finance sector. It can't be used for cross border payments.
They simply added the staking feature and called it a day. 25% interest per year isn't that bad though.
However, things get a bit more interesting when you realise what they're doing here.
BNB turning to DeFi is simply a way for them to have more BNB locked up. Most people see BNB as a way to skimp on exchange fees, and that's exactly what it was created for.
Along the lines however, the founder started doing some things wrong. In the white paper, it was stated that a certain amount of BNB would be relegated to the team, and it was already a fixed amount and couldn't be changed. However, the team had been receiving grants even after the allocated amount exhausted.
All this, as I said, is a post for another day.
However, when BNB is locked up, it creates this fake scarcity of BNB, which theoretically drives the price up by creating an imbalance in demand and supply. Kind of like how Bitcoin is limited in number, so everyone wants a piece of it before it finally stops being minted.
I see all this as a way to make CZ a ton of money. He of course owns a ton of BNB, so driving the price up can make him a serious fortune.
Let's see how this all wraps up though in the coming days.
Thanks for reading. If you enjoyed this breakdown, a like and tip would be amazing.
See you in the next one!
