Binance Founder Changpeng Zhao Interviewed: BSC Was Not Created by Us, but by the Development Community

Binance founder Zhao Changpeng CZ recently spoke to Chinese media LatePost in an interview, discussing Binance Smart Chain (BSC) and stating, "BSC is not something we did." The following summarizes Zhao Changpeng's comments on BSC.

Binance Denies Creating BSC, Initiated by the Community

"BSC is not something we created. When we were working on BNB ourselves, we gradually collaborated a lot with the community. So when it came to BSC, a group of people in the community came over and said they wanted to create a smart contract chain, similar to Ethereum, and hoped we would provide funding," Binance founder Changpeng Zhao CZ said in an interview.

In the past, the official Binance team has been actively promoting BSC, with Zhao Changpeng frequently posting on Twitter to support the development of BSC. Additionally, most of the BSC validator nodes are related to Binance. The community often praises BSC for its speed, low fees, but also criticizes its centralization.

However, BSC has experienced several platform exits, rug pulls, and flash loan attacks. Binance clarified that they would not actively intervene or get involved in events on the BSC chain, but rather provide assistance through the exchange and Binance Bridge. After the recent Belt flash loan attack, the BSC official Twitter account only provided suggestions, urging developers to conduct contract audits and be cautious of risks.

Zhao Changpeng stated that the BSC was created by the community, with BNB being used as network fuel, and Binance agreed to fund it because Binance is the largest holder of BNB. In reality, his own involvement was very low.

Non-competitive Relationship with Ethereum: Different Markets

"Many people say that BSC is not innovative and simply copied Ethereum, but improving performance by tens or hundreds of times is an innovation. If you say I copied Mercedes, but my speed is ten times faster, is that not an innovation?" Zhao Changpeng responded.

Although this statement may seem paradoxical to the decentralized goal of blockchain, Zhao Changpeng also has his arguments. The first is "different markets," and the second is the "Ethereum scalability bottleneck." Zhao Changpeng mentioned that while Ethereum is more decentralized, transaction fees are not cheap, with a single transfer costing $10 and more complex contracts costing hundreds of dollars. The cost-effective nature of BSC can serve users in Southeast Asia, India, and Africa, many of whom are at the bottom of the pyramid.

He also believes that since the rise of BSC, Ethereum's transaction volume has not decreased or increased significantly. This is because Ethereum's network throughput is limited to 15 to 20 transactions per second. BSC has not reached its limit yet, so there is no competition; instead, it serves those who were previously underserved by Ethereum.

Comparing the growth and decline of locked assets on BSC and Ethereum:

Looking at Ethereum, after reaching a peak of nearly $90 billion in locked assets in mid-May, it has now decreased to $63.4 billion, a decrease of about 30%.

On the other hand, BSC reached a peak of nearly $52.9 billion in locked assets in mid-May, but it is now at $26 billion, a decrease of 50%. This may be related to the emergence of new assets related to liquidity mining and the significant pullback of BNB.

Having a Large Holding of BNB, Does It Conflict with BSC's Decentralization Goal?

Binance is the largest holder of BNB, and BSC relies on BNB as network fuel to pay transaction fees. When asked if this conflicts with the decentralization goal, Zhao Changpeng stated that although Binance initially reserved 40% of BNB for the team, they achieved profitability very early and never spent the reserved BNB. He also promised to destroy all the portion owned by the team. He also mentioned that making BSC more decentralized benefits the market value of BNB, so the interests are actually aligned.

Finally, he mentioned that some people may compare him to Ethereum founder Vitalik, who sold a large amount of Ether in 2017, which was considered fairer. However, Zhao Changpeng believes that the presence of whales indicates institutional confidence in the coin. Since Binance believes in it, they have no intention of converting to holding US dollars.

More Interview Content: Market, Operations, and Regulation

In this interview, Zhao Changpeng also discusses the reasons for the rise of the bull market, Binance's operational history, and comments on clearer regulations in various countries. If interested, you can read the original Chinese report "Conversation with Binance's Zhao Changpeng: In the Midst of Cryptocurrency"