In a Reddit AMA, Binance Labs talked decentralization and taking the long view in investing in blockchain projects.
One of the main topics discussed at the AMA was decentralization. Answering a question about whether a totally decentralized crypto exchange is possible, Binance Lab’s director Benjamin Rameau expressed optimism about future “fully decentralized exchanges,” claiming that the company is running “multiple projects in this space.” Rameau stated that current decentralized exchanges suffer from low transactions speeds and scalability problems:
“We intend to sponsor academia and support multiple projects in this space. Exchanges need to be fast, scalable and avoid problems such as order book front-running. For the time being, most decentralized exchanges demonstrate weaknesses [in] at least one of these factors. Some hybrid models are attempting to get the best of both world[s]. Over time there will be better, more decentralized exchanges available.”
Head of Binance Labs Ella Zhang reiterated Rameau’s statements, saying that the previously announced development of decentralized exchange DEX is “is one of [Binance Lab’s] investment focus sector[s].”
Zhang said that decentralization is “the core value of Bitcoin and blockchain,” stating that the company has launched a number of initiatives in this direction like Dexathon, in addition to partnerships with “top research orgs” to address the most challenging decentralization issues.
According to the recent AMA session, the purpose of Binance Labs fund is to “identify and support projects that will make lasting impacts to the entire ecosystem.”
In regards to how the they select projects in which to invest, Binance Labs’ team member Flora Sun said that the firm has a “very long-term investment horizon,” and it only participates in projects with long-term perspectives. According to Sun, taking the long view on projects gives Binance Labs time ascertain the “founders’ motivations” as well their “ability to deliver on their promises.”
On June 4, Zhang suggested that if the initial coin offering (ICO) bubble bursts, it would be a “good thing for the industry.” She said that current valuations are “high and unreasonable” and that truly valuable products will only come into fruition once the market evens out.