Vitalik Buterin - the creator of Ethereum says why crypto crash like that of Terra (LUNA) is good for crypto
The creator of Ethereum (ETH), Vitalik Buterin, is suggesting that the price drop of crypto assets is beneficial.
Buterin said in an interview with Noah Smith, former editor of Bloomberg Opinion, that the price drop is "good" in revealing weaknesses.
“I think discounts are good at revealing problems that were always there in the first place. Unsustainable business models tend to succeed in boom times because things are going up, so the amount of money people have at their disposal is growing and so things can be temporary. supported by a constant stream of new dollars. "
The creator of Ethereum says that the collapse of stablecoin issuer Terra's (LUNA) native token is an example of a price drop that shows unsustainable business models. < br/> “During the crash, as we saw with Terra, this model no longer works. This is most true in extreme situations like high leverage and Ponzis (2017 veterans will be). remember 'BIT-CONNE-E-E-E-ECT!!!').
But that's also true in more subtle ways like how to develop protocols that are easy to maintain in a bull market but when prices fall, the Newly expanded teams are often difficult to maintain financially.”
The founder of the alleged Ponzi scheme, Bitconnect, was indicted by a grand jury in a US court in February of this year. According to Buterin, the volatility of crypto-assets will decrease in the “medium-term future” to a level similar to that of traditional assets.
“I definitely think that in the medium term future cryptocurrencies will be as stable and volatile as gold or the stock market.”
Sep 04, 2022