On-chain data indicates that 44% of the Binance Secure Asset Fund for Users (SAFU) Insurance Fund is backed by Binance native token BNB. This has led to some criticism of the SAFU Insurance Fund.
On-chain expert Willy Woo said that the inaugural $1 billion SAFU insurance fund is composed of BNB tokens worth $367 million (44 percent), BUSD tokens worth $300 million (32 percent), and bitcoin worth $270 million (24 percent).
Binance’s Bitcoin address and BSC/BNB address confirm this, but the over-exposure to BNB tokens irks the community, as we recently witnessed the FTT token pulling FTX by its roots.
Willy Woo said in a tweet that “While I admire Binance for introducing such a fund, there’s no purpose in placing incidence-correlated BNB in it.” What are our thoughts on the possibility of FTX having an insurance fund comprised of FTT?
These monies, when added to the estimated $800 million in Binance Custody, nonetheless come close to matching the $68 million that is currently available in Binance’s proof of reserves. Nevertheless, any volatility, most notably in BNB, might result in a much lower value for SAFU.
Despite the fact that certain members of the community continue to advocate for the BNB token exposure, one user of the CT platform tweeted that “binance’s money is easily accessible, not leveraged, and sits on the chain for everyone to evaluate.” ftt is overleveraged due to its debts and fraud, and there is no liquidity available for its billions of fdv.
In response to this tweet, the CEO of Binance said that the Binance SAFU insurance fund is approximately divided between BTC, BUSD, and BNB, and that the only difference is that the price of BNB climbed more quickly than the price of BTC since the previous rebalancing.
Amidst all this commotion, CZ announced Binance allocated another $1 billion to the industry recovery initiative (IRI) all in BUSD.
Binance will commit $1 billion to investment opportunities, and if circumstances warrant, they plan to increase that amount to $2 billion in the near future.
Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group are some of the companies that have already expressed interest in participating in the IRI. Their initial combined commitment amounts to approximately $50 million.
Approximately 150 businesses have already submitted their applications to Binance in the hope of receiving support through the IRI. Every IRI co-investor will have the opportunity to investigate potential business ventures and decide for themselves whether or not they wish to become independently involved.
Compiled by Coinbold
