The world’s largest cryptocurrency exchange Binance has launched a $100 mln fund to support Decentralized Finance (DeFi) projects on the Binance Smart Chain platform.
Binance made the announcement on September 10 during its DeFi World Summit as it looks to provide an impetus for development houses to build DeFi projects on its proprietary blockchain platform.
Open for proposals
Binance has opened up submissions to prospective developers, startups and companies to submit proposals in order to become beneficiaries of the fund. Members of the decentralized community that built the Binance Smart Chain will be early investors in the fund and will also act as a governance party for funding.
The most promising projects stand to walk away with $100,000 in funding and are subject to similar selection criteria that were used for Binance X, Binance Labs as well as the Binance Launchpad.
Furthermore Binance has said that it will also offer liquidity support for DeFi platforms that go through rigorous security audits and due diligence processes. Successful candidates will be able to plug into the massive Binance ecosystem which is home to millions of customers around the world and some of the brightest minds in the cryptocurrency and blockchain space.
The Binance highway
Another major goal of the fund is to become a bridge for the DeFi and centralized finance (CeFi) space.
Using its Token Canal project, Binance will be able to connect various DeFi projects to the Binance Smart Chain which will enable these platforms access to a plethora of cryptocurrency trading pairs including BTC, ETH and a number of ERC20 tokens.
This essentially gives these platforms access to a massive liquidity pool of different tokens as well as custody services and cross-chain capabilities. This promises to give DeFi platforms access to a wide variety of tokens that can power transfers swaps between different tokens and networks.
Hopping aboard the DeFi train
In its relatively short existence, Binance has become the force to be reckoned with in the cryptocurrency exchange realm and its founder Changpeng ‘CZ’ Zhao has continually pushed the organization to be at the forefront of innovation.
The past few years have seen the cryptocurrency community become enamored with major movements like the initial coin offering craze in 2017. In 2020, DeFi has become the focal point and Binance is pushing to stay abreast of the burgeoning sector.
Many users have jumped into DeFi projects that are promising great returns for staking various cryptocurrency tokens in their protocols. Binance is doing the same on its Smart Chain platform by introducing its Proof of Stake Authority consensus mechanism.
This essentially allows users to stake native BNB tokens, the lifeblood of the Binance ecosystem, and receive rewards from the Binance Smart Chain’s validators.
Binance users have also been able to stake tokens on select DeFi platforms since August 2019.
