Binance CEO on Staking, Futures, Venus, Lending, BNB Price, and Euro Stablecoins

On Wednesday (August 28), Changpeng Zhao (aka "CZ"), Co-Founder and CEO of Binance, answered questions on a wide range of Binance-related topics in a Periscope "Ask Me Anything" (AMA) session; in this article, we focus on the main highlights of this AMA.

Staking Support 

Binance currently supports staking for NEO (GAS), Ontology (ONG), VeChain (VTHO), Tron (BTT),  Stellar (XLM), Komodo (KMD), Algorand (ALGO), Qtum (QTUM), and Startis (STRAT).

CZ believes this will be considered "a necessary feature" for exchanges in the future, and that it does not make sense for the users of a centralized exchange to use third-party staking providers.

Binance's Upcoming Futures Platform 

Binance has invested in two futures platforms: one they bought and one they built themselves (with some outside help). CZ says "both of them are kind of ready," and that Binance is trying to decide which one to release. However, it is possible that Binance will release both since "they are slightly different products." CZ also says that "both products are very competitive in terms of features."

Project "Venus"

This is an initiative that was announced on August 19. This is how the Chinese version of Binance's announcement explained the motivations behind this project:

  • "in the past, the company has actively communicated with the regulatory authorities in many countries and regions around the world to establish a global, multi-dimensional customer network and compliance system";
  • "as the world's top blockchain enterprise, the company has already reserved the public chain technology and cross-border payment system for safe operation of new stable coins"; and
  • Binance hopes "to realize an ideal, that is, to break the financial hegemony, reshape the world financial system, let the late-developing countries grasp more financial initiative, safeguard their financial security, and improve the efficiency of cooperation between the state and the country and between people."

CZ says its main goal is to increase adoption of cryptocurrencies, especially fiat-backed stablecoins. Binance is looking for partners (i.e. people who want to issue fiat-backed stablecoins on Binance Chain) to join them.

Binance's Recently-Launched Lending Platform

Binance's new lending platform, Binance Lending, was announced on Monday (August 26) and launched on Wednesday (August 28).

Although initially, you can earn 15% for lending out your BNB, it should be noted that this interest rate is guaranteed only for a short term (two weeks). The same thing applies to the interest rates offered for the other supported cryptocurrencies.

Binance Lending Table - August 2019.jpg

These rates will periodically get adjusted based on supply and demand dynamics. The funds you allocate to Binance Lending are covered by the Secure Asset Fund for Users (SAFU) program (since all crypto on Binance.com is covered by SAFU), and if that is not large enough to cover any losses, then Binance will cover them out of its own private funds ("at the end of the day, if the SAFU cannot cover, we will cover it").

Binance Chain and Binance DEX

CZ talked about three topics in this area:

  • Regarding smart contract support for Binance Chain, although internally there are some disussions going on, as far as CZ knows, no development effort has actually started yet.
  • You can trade direct on Binance DEX through the 30 or so wallets that support it, e.g. Trust Wallet.
  • Binance plans to open source Binance Chain and Binance DEX in the future. Binance knows that many centralized exchanges would like to offer their own DEX, but wants to encourage more innovation by forcing those exchanges to experiment with their own solutions rather than using a fork of what Binance has done.

BNB's Recent Price Action

CZ is, of course, aware that the price of Binance Coin (BNB) has recently gone down (of course, it needs to be said the whole of the crypto market has been in a bearish mood in the past few days).

All that Binance can do is continue working hard ("most of our teams are working 16-hour days, myself included") on increasing adoption of BNB. CZ says they have one of the most hard-working teams in the industry.

Binance Merchandize

Binance does not want to open an online store for selling Binance-branded merchandize, despite the huge demand from Binance users/fans, mostly because they don't know how to handle the logistics. They especially want the Binance hoodie to continue to be "a bit more exclusive."

Euro-Collateralized Stablecoins

Binance would like to issue a euro-backed stablecoin one day in the future (no concerete plans yet) because there is demand for it. However, according to CZ, this is not as easy as it sounds due to the fact that the euro is a negative interest rate fiat currency, and so redemption is a tricky issue.

Featured interest rate table (for Binance Lending) courtesy of Binance

Bitcoin Price Surges Above $9,300 for First Time Since June 25

On Monday (July 6), the Bitcoin price managed to surge past the $9,300 level for the first since June 25, a move that was likely powered by the current bullish in the stock markets of China and the United States.

Today's strong rally in the world's major stock markets started was led by China, where the Chinese government is apparently encouraging investors to buy stocks.

According to a report by CNBC, "a front page editorial in state-owned China Securities Journal" (publishe-d earlier today) talked about the “wealth effect of the capital markets” and suggested that a “healthy bull market" was important for the economy at this time.

Peter Boockvar, chief investment strategist at Bleakley Advisory Group, says:

"We have the Fed to juice bull markets, China has its state media."

The CSI 300, which is "a capitalization-weighted stock market index designed to replicate the performance of the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange", closed over 250 points higher at 4,670.09, up 5.67%. 

CSI 300 Chart by Google Finance on 6 July 2020.png

As you can see in the above chart from Google Finance, in the past five trading session, the CSI 300 index has gained over 13%, the most in a five-day period since December 2014, and helping the CSI 300 to reach a level last seen in June 2015.

CNBC says that although "China’s economy faces many hurdles, including trade issues with the U.S. and the growing friction as the economies move to decouple",  in the near term, "the prospect of an improving China spilled over to other markets, boosting sentiment for global trade."

Europe's major stock markets followed China's and all closed higher.

As for the U.S. stock market, premarket trading data indicated that the market would be having a good day, and it has not been wrong so far.

Currently (as of 18:37 UTC on July 6), the Dow Jones Industrial Average (DJIA), the S&P 500, and the Nasdaq are at 26196.15 (up 368.79 or 1.43%), 3172.03 (up 42.02 or 1.34%), and 10404.81 (up 197.18 or .93%) respectively. The leading sector was (as usual) technology, with Amazon and Netflix setting new all-time highs, helping the tech-heavy Nasdaq to power itself to a new all-time high.

This is what President Trump tweeted around 10 minutes after the U.S. stock market opened:

Today's stock market rally in the U.S. means that the S&P 500 and the Nasdaq are both on a five-day winning streak. 

So, what's fuelling investors' perhaps surprising amount of bullishness on stocks in the midst of the COVID-19 pandemic? This might be especially mystifying in the case of the U.S., where we are seeing around 50,000 new daily cases of COVID-19 (even though, thankfully, the number of death are going down).

It seems that investors and traders believe that:

  • As lockdown measures are eased, the outlook for businesses should keep improving.
  • There are encouraging signs from the pharmaceutical industry that we will soon have good therapeutics in the next few months and reliable vaccines by next year.
  • Governments around the world will continue to support the financial markets with monetary and fiscal stimulus.

Andrew Brenner of National Alliance told CNBC:

"I’m starting to believe the Covid case are an inverse indicator. The worse it gets, the more the market does better because it means more Fed and fiscal stimulus will come towards the markets."

The optimism that is fuelling the stock market rally appears to be also helping Bitcoin since today Bitcoin shake off the lethary of the long Independence Day weekend -- which saw Bitcoin dropping below $9,000 at 21:15 UTC on Sunday (July 5) and bounce back above $9,300 for the first time in 11 days:

2 Week BTC-USD chart on 6 July 2020.png

Featured Image by "WorldSpectrum" via Pixabay.comSave