FTX case confirms view that ‘everything centralized’ is ‘suspicious’: Buterin
The collapse of FTX holds lessons for all crypto, according to Ethereum co-founder Vitalik Buterin.
Buterin emphasized the stability of crypto’s so-called underlying technology, the blockchain, while also acknowledging the severe impact of the Sam Bankman-Fried crypto empire’s meltdown.
In the days since FTX filed for bankruptcy, companies from BlockFi to Genesis to Gemini have been hit with the fallout.
Despite the upheaval, Buterin said blockchain base layers and decentralized finance protocols were working “flawlessly.”
“Of course, what happened at FTX was a huge tragedy,” Buterin told Bloomberg. “Nonetheless, many in the Ethereum community also see the situation as confirmation of something they believed in all along: centralized things are suspicious by default,” he said. Among those beliefs was a belief in “open and transparent code about individuals,” he added.
Buterin, like many others at crypto-Twitter, has been pondering how crypto exchanges could help boost trust in their businesses over the past few days. The demise of Bankman-Fried has prompted an industry-wide self-accounting of transparency and risk.
Commenting on the earlier crash of Do Kwon’s algorithmic stablecoin TerraUSD and its associated Luna token, Buterin said, “Such crashes are, on the one hand, necessary for the ecosystem.” On the other hand, he added, “I really wish it had happened when Terra/Luna was about 10 times smaller.”
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