Gün Sirer expressed concern about the tendency in the crypto community to ignore red flags in favor of individuals who initially appear to be successful. As an example, he cites FTX founder Sam Bankman-Fried, who allowed the current inmate of a Brooklyn prison to escape punishment for embezzling billions of dollars. Most people were not skeptical of the FTX CEO, which allowed the current inmate of a Brooklyn prison to escape punishment for stealing billions of dollars.
“We all ignored the huge red flags associated with SBF because “he looked smart” and “he made a lot of money.” Then it turned out that he was dumb as rocks, was a sociopath, and was just stealing our money.” Gün Sirer says.
Gün Sirer says that after Benkman-Frieda leaves, other, potentially worse ways of fraud will take its place, most likely in the form of various layer-2 solutions.
“The next cycle is going to be even more noisy, with even worse behavior. It has become really easy to launch a trash L2, and it’s fairly easy to do that trick, perfected by a certain chain that reorgs every other day, where you find someone who is actually doing real work and you parrot what they say, while angling for a photo op with Vitalik [Buterin].”
The CEO points out red flags that characterize trash L2s:
Project narrative does not match project tech. E.g. centralized sequencers and layer-2s that lack fraud proofs are trash that is at odds with crypto.
Projects that sell tokens now in order to raise money to do the work that will lead to some other technology later. Third prong of the Howey test has something to say about this, and it starts with S and continues with ecurity Offering.
Founders dumping personal tokens pre-launch. Teams should be locked up. 8-figure sales pre-launch in order to “thank the staff” are about as OK as SBF stealing everyone’s money because he’s an “effective altruist.”
Very low float tokens. SBF played this game of manipulating low-float token valuations and borrowing against them. Enough said.
Founders complaining that they are running out of [name of the drug]. I’m no moral police, but come on.
Gün Sierer’s tweet sparked a lively discussion, so numerous users reacted to his statements. Opinions were divided into two sides: those who supported the leader’s views and those who criticized them.
Robert Sasu, the main developer of the MultiversX platform, emphasized the importance of the main qualities of the blockchain, such as decentralization, security, and thoughtful design.
“Decentralisation, security and correct construction by design matters. A lot of L2s miss most of these points. I can agree with your worlds, but don’t forget other ecosystem who scale at least as much if not more: like MultiversX. In case of blockchain let’s not forget that for the whole concept to work, it must be possible that simple user can run and verify the network. The famous “Trust but verify”. For this the chain must use reasonable resources, and scale in horizontal way.” Sasu writes.
Sasu is absolutely correct in pointing out that we should not forget about other ecosystems that are constantly improving. A good example is Solana, which regularly introduces updates, new features, and innovative applications to make the ecosystem more efficient. Another great example is Whitechain, which has recently rebranded its blockchain and is holding various events to develop the ecosystem and engage with the community. And also Polkadot, which launched an expansion update, introducing a new process to provide radical solutions to scale the network in a matter of weeks.
The user nextalphaa expressed a different point of view in the discussion about the Ethereum L2 solution. He emphasized the open and versatile potential of Ethereum, claiming that it facilitates the development of various projects that contribute to the ecosystem’s goals of greater transparency and decentralization.
The Ethereum L2 ecosystem has witnessed significant growth, reaching a total blocked value of over $38 billion.
In October 2023, transaction activity on L2 networks exceeded that of the main Ethereum network. According to L2beat, these L2 networks are currently processing approximately five times more transactions than the main network.
Ava Labs CEO’s words serve as a reminder of all the challenges the crypto industry is facing. The discussion of opinions showed the diversity of users’ views. However, they all emphasize the importance of decentralization, as it allows for a more secure ecosystem. In addition, it is important to carefully analyze and understand all the risks that arise in the industry to ensure stable and efficient development.
Deniz Tutku
