Binance: The 6 Commandments of Crypto Exchanges

Tables of the law according to ZK – Recent events related to bankruptcy of FTX reminded everyone how young and fragile the crypto ecosystem was. Thus, in this universe more than anywhere else, the behavior of players in this market must be above reproach. Otherwise, as we all see now, the consequences can be dramatic for his development. It is in this context that chief balance sheet, CZ, appeals to all exchanges in the form of the 6 commandments. All the details.

Exchanges must lead by example

While preparing to raise one business support fund affected by the FTX cataclysm, CZ publishes a message, a reminder of the basics. A set of rules that have the good taste to put at the center of concerns an essential point for any exchange of self-respect. User trust. Because the latter will be difficult to rebuild.

Like CZ I remember, crypto platforms must protect their users’ funds by all means. This is priority number 1. In a world where exchanges are the gateway to the adoption of cryptocurrencies by the general public, it should not be allowed to blame a market player who wants to be serious and respected. . Transparency as hostess, Binance wants to lead by example in this messy cacophony that follows the FTX drama.

Binance CZ boss issues 6 orders to crypto exchanges

Point number 1. An exchange must be risk-averse. Indeed, user funds should never be traded or invested. Let’s leave this behavior to the traditional banks and try to do better. Necessary remove partial backup of our dictionary.

Point number 2. CZ repeats it. An exchange should never use its original token as collateral. In addition to the fluctuating flow of this,INTERDEPENDENCE resulting between the exchange and its token is dangerous to its survival.

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Transparency first for Binance

Article number 3. Transparency, transparency and more transparency. We cannot stress this enough. This is what users need now to continue to believe in the good faith of market players. Binance usually has it figured out already wallet address list in which the stock exchange would hold its funds. Although this does not represent proof of ownership, it is a first step by Binance. This pending the publication of a real Backup evidence structured around technology Merkle tree (Merkle tree). A process that will allow to verify without any doubt and at any time the exchange funds.

Through Merkle Trees technology, Binance is committed to providing irrefutable proof of its reserves in order to reassure users.
Transparency in stock exchanges like Binance should become the headline

Article number 4. You have large cash reserves. A key point for any exchange once Proof of Reserve via Merkle Trees is applied. Binance, through its reserve fund, the SAFU fund, holds nearly $1 billion to withdraw in the event of an emergency.

Article number 5. Avoid leverage effects. Trading with debt, in a world as volatile as crypto, is unwise according to Binance. CZ, from which we sketched this year crypto portraitit also ensures that the operation of its exchange is debt-free.

Article number 6. Strengthen security and cooperation with regulatory bodies. Because in light of recent events, the latter will have the perfect excuse to apply abusive rules to the entire ecosystem. And that would risk stifling innovation in such a promising ecosystem. Therefore, the dialogue should be privileged with these subjects in order not to create generalities based on the excesses of a minority driven by madness.

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