6 Principles Of CZ For Centralized Exchanges
Before the serious effects of FTX, the CEO of Binance gave 6 principles that Binance and centralized exchanges should adopt to ensure trust with users.
CZ emphasized in his article, the most important role of exchanges at the moment must be to protect users. User funds cannot be used for illegal purposes and must be kept safe.
6 principles of CZ include:
- Be risk averse with user funds
- Never use native tokens as collateral
- Share live proof of assets
- Keep strong reserves
- Avoid excessive leverage
- Strengthen & Enforce Security Protocols
It can be seen that the principles that CZ gave are the mistakes that FTX made that led to the collapse of an empire in the market. Many companies have filed for bankruptcy because of the impact. At the same time, after FTX, there have been many exchanges involved in scandals about using users’ funds in an untransparent manner.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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