Scroll Defends Binance Alliance Amid Community CEX ‘Kneeling’ Criticism

Amid growing dissent from its community over the recently announced partnership with Binance, Scroll has taken steps to clarify and defend its position. The backlash stems from a perceived focus on major exchange support rather than rewarding community members, an issue that Scroll’s leadership addressed directly. 

Community members expressed disappointment over what they see as unfair token distribution, favoring large Binance investors over smaller, loyal supporters of the Scroll project. One of the community members expressed disappointment, accusing the project of “kneeling to CEX.” 

Scroll Co-founder Zhang Defends Strategic Value of Binance Partnership

In response to community concerns, Scroll co-founder Ye Zhang addressed the criticism regarding the partnership with Binance. Zhang emphasized that the collaboration was not merely for listing purposes but a strategic move towards growth and broader market support. 

He emphasized Binance’s crucial on-ramp and off-ramp services for stablecoins, which are essential for expansion in emerging markets. In these regions, the exchange is trusted and utilized more extensively than Ethereum. Ye Zhang said,

“Having visited Africa, I’ve seen that everyone uses Binance – it even holds stronger legitimacy than Ethereum for many locals.”

Additionally, Zhang explained the necessity of centralized exchange (CEX) support to compete with other blockchains like Tron, which has capitalized on zero-cost stablecoin transfers and extensive CEX backing to create a network effect. Without such support, the project faces a classic “chicken-and-egg” problem. This is where layer 2 solutions struggle with adoption without access to the critical infrastructure platforms like Binance provides.

Moreover, the Scroll co-founder also addressed the timing and market dynamics that necessitate such a partnership. He pointed out that the market has evolved since Ethereum, and Optimism’s growth phases, where exchange leverage was less pronounced. 

Today, the market conditions are drastically different, with layer 2 solutions becoming commoditized and the infrastructure less appealing to users.

Zhang mentioned that partnership could cut down the wait for support from CEXs from months to immediately. He stressed that the decision was made with a long-term perspective, aiming to secure the project’s competitive position.

Addressing Community Concerns on Token Distribution

Furthermore, Zhang clarified that the 5.5% earmarked for Binance launchpool comes from the ecosystem and growth budget, not the community airdrop pool. More so, he reassured that Scroll has reserved a substantial portion of tokens for community rewards.

To mitigate concerns about unfair advantages for large investors, Scroll has set a 2,500 SCR per user purchase cap during the pre-market phase. This will ensure a broader distribution among potential holders. Zhang expressed commitment to long-term community engagement and growth. Concurrently, he indicated that token distribution strategies will foster a healthy, decentralized growing ecosystem. The co-founder stated,

“A lot more will come in the coming weeks.”

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Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.