Is Binance forcing users to use $BUSD unethical?

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@binance recently announced that it will convert user balances in $USDC, $USDP, and $TUSD to $BUSD automatically Is this an unethical move by @binance? Or are they genuinely trying to improve the customer experience? We expose the hidden truth to you 🧵

Before we continue... You can read the unrolled version of this thread here: momentum6.substack.com/p/is-binance-forcing-users-to-use-busd

@binance announced that existing $USDC, $USDP & $TUSD balances in user accounts will be automatically converted to $BUSD Any new deposits of $USDC, $USDP & $TUSD will also be converted into $BUSD in the future The change was meant to improve liquidity & capital efficiency

TO BE CLEAR: BINANCE IS NOT DELISTING $USDC Users can view their $USDC, $USDP and $TUSD balances under the $BUSD denominated account balances Users can also deposit/withdraw funds in $USDC, $USDP, and $TUSD at a 1:1 ratio to their respective $BUSD denominated accounts

Binance has suspended spot, future, and margin trading in $USDC, $USDP, and $TUSD for a small subset of coins IS THIS AN ETHICAL MOVE BY @cz_binance? Removing most of the stablecoin pairs does simplify the task of market makers and minimizes liquidity fragmentation

It also makes the user experience better since users no longer need to convert their $USDC into $BUSD or $USDT each time they want to margin trade perps on the Binance exchange

Due to the restricted liquidity of $BUSD outside of Binance, customers have to convert the $BUSD into $USDC in order to use it in the other exchanges. This is advantageous for $USDC as well. twitter.com/jerallaire/status/1567189447032143872?s=20&t=nuOdHGj59g0q2W3GFx9z3g

So, what's the problem here? It's a win-win situation for all right? This move was intended to serve the users right? NOPE. IT'S A WIN SITUATION ONLY FOR BINANCE. USERS ARE MORE VULNERABLE THAN EVER BEFORE. HERE'S WHY:

1. Binance's forced "Auto-conversion" is blatantly monopolistic behavior of a typical FinTech company They are no better than traditional banks that have the power to freeze or take control of user funds Where is the decentralized future that #Web3 users were promised?

If they have the power to convert all of your $USDC into $BUSD, they certainly have the power to take all of your $BUSD Users of the Binance exchange must be more cautious than ever to prevent their funds from being compromised on the exchange twitter.com/_TomHoward/status/1567540424608460800?s=20&t=E0UzENaI1m-AEcR1sK6ANA

2. Binance is indirectly harming other stablecoin's business revenue by implementing this auto-conversion of stablecoins to $BUSD Especially $USDC. Binance now has the opportunity (instead of $USDC) to earn huge yields on their user cash deposits twitter.com/lowstrife/status/1567336654519631884?s=20&t=Jp3_HJpFhKl9j3DlmMKh8Q

3. Binance is trying to gain an unfair advantage in the stablecoin market using its PLATFORM Real businesses gain market share by giving their users more value or by having an advantage over their competitors Not by "AUTO-CONVERTING" user funds in a monopolistic way

VERDICT: Although the intention of concentrated liquidity might be a beneficial move for everyone, it is certainly not ethical to forcefully convert users' funds It certainly appears to be a monopoly play to grab other stablecoin's revenue

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