SAFU: A Binance initiative to protect investors that turned into a crypto slang

Binance’s initiative to protect investors who have switched to crypto slang

by CNBCTV18.com IST (published)

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The Safe User Asset Fund, or SAFU for short, is an initiative by Binance that takes a portion of trading fees and collects them in a fund. This fund will be used to compensate users if the need arises, i.e. if the platform is hacked or the investors lose their money through some technical exploitation.

Last year, the crypto envelope lost nearly $14 billion due to scams and hacks. That’s nearly double the 2020 number. It’s a growing concern among investors, with many tales of people losing everything to these exploits circulating online.

Of course, public trust will remain strong only if there are measures to reduce, correct or compensate for these frauds. As the world’s largest crypto exchange, Binance has taken the lead in protecting the interests of its users and protecting them from such unfortunate scams through an initiative known as SAFU.

Let’s learn more about what SAFU is and how it works.

What is SAFU?

The Safe User Asset Fund, or SAFU for short, is an initiative by Binance that takes a portion of trading fees and collects them in a fund. This fund will be used to compensate users if the need arises, i.e. if the platform is hacked or the investors lose their money through some technical exploitation.

SAFU was created as an emergency insurance fund in 2018. Since then, Binance has deposited a small percentage of the fees for each transaction into the fund. Earlier this year, it was revealed that the SAFU fund held over $1 billion in BNB, BUSD and BTC. The addresses of the wallet where the funds are stored are also publicly available, adding transparency to the initiative.

The need for SAFU

With the increase in fraud cases, not even the crypto giants are safe anymore. There are always chances of data breach, loss of private keys through exchange and other unexpected events. This is where SAFU comes in.

It works like an insurance policy that the company and users can count on when something like this happens. With an exchange as big as Binance, people’s trust is everything; If that gets lost, people will be reluctant to create accounts.

SAFU is a goodwill gesture and a smart business tactic to maintain people’s trust in Binance. It won’t be long before others take a cue and start their own SAFU.

meme

Leave it to the internet to take something noble and turn it into a funny/ridiculous meme with little grounding in logic. During an unexpected maintenance operation, Binance CEO Changpeng Zhao tweeted, “Money is safe.” A YouTuber named Bizonacci created a video that mocked the tweet – he called it “Funds are SAFU”.

The video repeats the phrase “money is safe” in Zhao’s voice in various scenarios from extreme to absurd. The three-minute video has us traveling from modern times to the death of the universe, and an automated version of Zhao still says the money is safe. Somehow, the video went viral, and the term SAFU stuck around. Since then, SAFU has been used as slang for “money is safe”. Like how HOLD HODL became in cryptocurrency, we have SAFE which is now SAFU.

conclusion

The only drawback of the SAFU fund is that it is stored in cryptocurrencies. This means that it is subject to market corrections. Bear markets, such as the ones we currently find ourselves in, can severely affect a fund’s valuation. Other than that, it’s a great way to make sure clients’ money is safe or, if we should say, SAFU.

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