1/ The #FTX debacle means we need more crypto/web3, not less
2/ #UST/ #Luna was a shitcoin but NOT a #ponzi
3/ Hacks make crypto more resilient
Three (controversial?) opinions. Let me explain
Firstly, what is good for crypto is not necessarily good for crypto investors today
It is INCREDIBLY sad to see people lose money to nefarious characters (SBF), badly designed tokens (UST), or hacks due plain stupidity (Ronin, wintermute)
But it does move crypto forward
1/ What SBF did is just plain illegal and should be punished
Just like Bernie Madoff, or the banks that rigged LIBOR, or the ppl punished for their role in the financial crisis
HOWEVER, FTX are not crypto! It is a Centralised Exchange just like Nasdaq, or DOW, or FTSE
Centralized exchanges merely enable on/off ramps & trading. They are nothing to do with DeFi or the ethos of crypto
It is like saying that just because Lehman/Goldman/Nasdaq has done something illegal, that taints all the shares (i.e. Shell, Microsoft, etc) traded by/on them
Real innovation in crypto is happening by the tokens listed there. The likes of Ethereum, Uniswap, Aave, Opyn, dydx, Maker, Optimism, and 000's of listed/unlisted projects
If anything, the blowup of 3AC, FTX, etc shows why crypto and the real investing world needs MORE DeFi
Defi is building alternatives to these centralised institutions
So we do not have to give them our money, then pray that they follow the laws and not fuck around with it.
I would rather have web3 protocols where my funds can be managed, but CAN'T be used for anything else...
... coz I own the keys to those funds OR the funds are locked in an open source (and hence auditable) smart contract
How is this not better than having an army of highly paid bankers trying to ensure regulatory compliance.. and sometimes failing?
Crypto allows you to bake the regulation into the system coz code is law
See @BrahmaFi for example (like many, many others)
I can invest my money in a specific vault which then runs a particular strategy to generate a yield
But there is no way my investment can be 'gambled' away coz the vault is a smart contract. It won't allow the money to be used for anything else
In addition, BrahmaFi probably has better gateway than TradFi to ensure only qualified investors interact with it
2/ Now let's talk about @stablekwon
Was UST/Luna a bad idea? Yes
Was it a ponzi? No
An important ingredient for ponzi is secrecy. You take from Peter to pay Paul, but no one knows you are doing this
Luna/UST mechanism was available to everyone to see/assess, and we all bought into the idea of 20% returns forever
In fact, some people did warn about the mechanism. But a lot of us chose not to listen
You can argue that Do Kwon could have done things differently He could have paused the chain, built up stronger reserves, etc
That proves ignorance, or over confidence. Maybe there is a legal case somewhere
But LUNA/UST itself wasn't a Ponzi
And that is an important distinction: Ppl's actions vs crypto experiments
Some work... some don't. Some are bat-shit crazy. Some, in retrospect, should never have been done (fuck 3,3/OHM)
But then, isn't bitcoin the craziest experiment of them all? That clearly worked
3/ Now let's talk about hacks
Crypto isn't perfect. Hacks are a plenty. But that is also because they build in public, all code is open source and there is huge incentive to hack
But imagine the resilience if they hold billions and are safe enough to not be hacked?
Financial institutions protect their code from prying eyes coz they are afraid someone might get access to it and exploit it's vulnerabilities. Do you think Goldman/Barclays would have the confidence to open up their live code to the world?
When my twitter account says Future is Crypto, I really do mean it
If the world is moving towards CBDCs, then why would we use the old institutions/infrastructure?
Wouldn't it be better to use battle tested, composable crypto protocols
Maybe eventually, all money will be "crypto" since all of it will be programmable and digital
Lastly, exchanges take customer money and should be regulated. Period
Sad that regulators prioritised KYC/ML before forcing, say, proof of reserves on exchanges
Shows they were only concerned with their tax money rather than protecting customers
And before I end this thread, let's talk about investors
As I said in the beginning, all of the above are risks of being a part of the crypto journey
Anyone who says this is easy money is a liar/fraud
But if you are willing to join the ride, understand the risks, and know how to navigate them, no one should be able to stop/regulate you.
Coz you know it is a going to be a fun ride...
and you will have the satisfaction of having contributed to a new way of doing things
And maybe... just maybe ... there is a pot of rewards at the end of it all