Binance, the world’s largest cryptocurrency exchange, has been receiving a lot of attention lately after it announced that it was launching the Binance Chain mainnet and planning to execute a mainnet swap on April 23, 2019. Now the company is incentivizing developers who are building on other blockchains to switch to Binance’s own network. This has raised the eyebrows of Lucas Nuzzi, the Director of Technology Research at Digital Assets Research, who thinks that the move will put a lot of power in the exchange’s hands.
In a Twitter thread, Lucas argues that Binance could try to control the entire ecosystem with the influence that it has gained over the last few years. Just as Binance’s management announced that it was going delist Bitcoin SV (BCHSV) without any consequences, it could now demand projects from rival platforms, such as EOS, TRON and Ethereum, to migrate to Binance Chain as a requirement for them to be listed on the exchange.
With this kind of authority, Mr. Nuzzi believes that:
“Binance [could] become Ethereum’s equivalent to Bitmain; a massive, centralized, self-serving agent that retains a lot of power.”
The former consultant at Thompson Management Horizons claims that since most tokens that have been launched on the Ethereum blockchain lack utility and their main purpose, at this point in time, is being used as a medium-of -exchange, they could benefit from the migration to a blockchain that is associated with an exchange. The shift could set the stage for these tokens to get into the headlines and subsequently receive a pump in their market valuation.
As speculation around the matter continues to increase, Nuzzi suspects that the world’s largest cryptocurrency exchange could potentially expand its dominance over the cryptosphere, with the surge of Initial Exchange Offerings (IEO). Considering that IEOs are managed by a crypto assets exchange on behalf of the startup that is looking to raise funds and that they take a cut of the tokens sold as well as listing fees, this could allow them to oversee most of the new projects that are being built. Therefore, Binance could try to “control the entire supply chain of tokens.”