Widespread on-chain analyst Willy Woo raised issues over Binance’s Safe Asset Fund for Customers (SAFU) Insurance coverage Fund. He believes it’s not protected to place “incidence-correlated BNB” within the SAFU fund. Willy Woo compares it with the crypto exchange FTX having an insurance coverage fund backed by FTT.
Is It Protected to Have BNB in Binance SAFU Fund?
Willy Woo in a tweet on November 25 shared that Binance’s Safe Asset Fund for Customers (SAFU) now consists of $367 million value of BNB, which is 44% of the fund. Furthermore, it has $300 million value of Binance’s dollar-pegged stablecoin BUSD and simply $270 million value of Bitcoin. It has fallen considerably under $1 billion amid worth fluctuations.
Willy Woo believes the SAFU insurance coverage fund with 44% of its reserves backed by BNB just isn’t protected. He compares it with FTT, the native token of FTX crypto alternate, which plummeted massively amid the FTX disaster. It might be like FTX having an insurance coverage fund backed largely by FTT tokens.
“Whereas I commend Binance for having such a fund, there’s no sense placing incidence-correlated BNB in there. How would we really feel about FTX having an insurance coverage fund full of FTT?”
Crypto alternate Binance on November 9 topped the emergency insurance fund with $700 million value of BNB and BUSD tokens and $300 million value of Bitcoin. Nevertheless, Willy Woo famous the fund has now declined to $837 million amid market fluctuations. He additionally shared Bitcoin and BSC addresses for verifying SAFU proof of reserves. The alternate plans to implement a Merkle tree-based proof of reserves system verifying its whole alternate property.
The $837 funds nonetheless roughly match the $68 million in Binance’s proof of reserves and practically $800 million inside Binance Custody. Willy Woo asserts the SAFU fund can take a success throughout troublesome market circumstances as seen traditionally. BNB’s efficiency is instantly associated to Binance’s stability and success. Thus, it issues having BNB within the emergency fund.
“BSC is ruled 21 validators chosen each day by 11 validators on the BNB chain. There’s circumstantial proof that the 11 beacon chain validators are centralised round Binance. In a Binance incident, the BSC valuation part of BNB would possible additionally dump.”
BNB Worth Stagnates
BNB worth trades at $296, down practically 1% within the final 24 hours. The BNB token has failed to carry over $300 regardless of the robust efficiency and steady growth of Binance.
Whereas the BNB token noticed an nearly 9% rally in every week amid Binance CEO “CZ” announcing an industry recovery fund, the worth fails to maneuver towards the market.
Additionally Learn: Binance $1 Billion Industry Recovery Initiative
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