What just happened? The largest cryptocurrency exchange in the world has reportedly invested $500 million in Elon Musk's Twitter buyout. Binance will work with Musk's teams to develop and incorporate blockchain-based solutions for social media platforms. The partnership allows Binance an excellent opportunity to integrate social media and news into Web3's envisioned future.
Binance CEO Changpeng Zhao, also known as CZ, has supported Musk's Twitter ambitions since the early stages. As an equity co-investor, Binance joins the ranks of Musk's other partners, including Sequoia Capital, Fidelity Management, Andreessen Horowitz, and Brookfield.
Analysts questioned Binance's commitment to the investment following Musk's hesitations earlier this year. In a June Bloomberg interview, Zhao clarified his company's position, stating his support would only remain if Musk followed through: "...If he's off, we're off."
Our intern says we wired the $500 million 2 days ago, probably just as I was being asked about Elon/Twitter. https://t.co/gM65GHUnZC— CZ " Binance (@cz_binance) October 27, 2022
An October 27 tweet from Zhao responded to inquiries asking whether or not the exchange held to its word and followed through on the investment. An additional tweet on October 28 confirmed the commitment was indeed completed, proudly stating, "Let's unleash the bird."
The move toward blockchain-based technologies isn't a new step for Twitter. Last November, the company tasked a team of cryptocurrency and blockchain experts to research and develop new blockchain-based technologies and solutions. The effort led to Twitter allowing users to have non-fungible tokens (NFTs) as avatar photos.
Let's unleash the bird.— CZ " Binance (@cz_binance) October 28, 2022
Binance aims to leverage its investment to drive progress toward Web3, an updated, decentralized version of the internet focused on promoting user ownership, censorship resistance, decentralization, better identity solutions, and native payments that do not rely on today's financial institutions. The shift in focus represents a departure from today's Web2.0, which emphasizes user participation, user-friendly content generation, and interoperability across platforms and solutions.
Binance also hopes to aid Musk in reducing the number of bot accounts in use. Bots were a central point of contention for Musk throughout the acquisition. He insisted they were far more prevalent than previously reported. Binance has expressed its desire to develop an on-chain solution to combat the proliferation of bots. However, Twitter's new management has not yet revealed designs or plans to combat the problem.