Lately, the crypto market has fallen into a tight tunnel as the prices keep going down. Most of the crypto assets are heading south with little or no breaks. The bears are getting stronger and the tension in the market is increasing.
The volatility has triggered major crypto exchange Binance to pursue stability. This new action comes after the exchange announced its intention to acquire FTX to ease its liquidity issues.
The CEO of Binance, Changpeng Zhao (CZ) has actively noted the events in the Binance-FTX drama. Also, he took to Twitter to reveal some points regarding the drama.
one in Tweet Today, CZ revealed that his firm made more money on its insurance backing. According to the post, Binance has created a security asset fund for its users.[SAFU]increased to the equivalent of $1 billion.
CZ explained that the move ensures the security of the network against the recent market price volatility. Furthermore, it aims to protect users by ensuring continuous operation regardless of market trends.
Description of Binance’s SAFU
In addition, the Binance CEO mentioned the details of the two reserve accounts and their links. One of the accounts holds the Binance Coin (BNB) token and the Binance stablecoin (BUSD) which is worth about $700 million. The second account consists of bitcoin (BTC) tokens valued at around $300 million.
Responding to the Twitter post, some in the crypto community made the CEO aware of their position. Some lauded his initiative and unique leadership approach to protecting the network.
One of the users mentioned that all crypto companies should emulate Binance to have a Security Asset Fund (SAFU) for the users. However, some still question the fund’s reserve cap adequacy for users.
In 2018, Binance SAFU started with a fund dedicated to backing up user holdings in critical situations. In addition, the firm allocated 10% of the trading fee to the fund. Gradually, the fund continued to grow, reaching $1 billion for the first time in February of this year.
CZ maintains transparency in crypto firm
The CEO of Binance has maintained a transparent position in handling almost all the events of the firm. CZ said the company will deploy a proof-of-reserve system using Merkle Trees.
It aims to achieve complete transparency with the community. Furthermore, Merkle Tree enables the encoding of blockchain data in a more secure and efficient manner.
Hence, reactions are pouring in on the adequacy of the SAFU of Binance, after CZ tweeted on the use of Proof-of-Reserve the previous day. The CEO mentioned that the mechanism will provide detailed information on the liquidity for the network.
featured Image From Pixabay, Charts From Tradingview