Reading time: ~2 m
The co-founder of the decentralized blockchain of the first level Tezos believes that the wave of defaults of crypto companies proved the unviability of projects designed only for profit growth.
Kathleen Breitman said in an interview that the bankruptcy of troubled crypto lender Celsius Network was predictable because such business models are highly volatile in the long run.
“Everyone who has been in the industry for quite a long time was not at all surprised. In economics, contrary to popular belief, there are laws that go beyond blockchain,” says Breitman.
According to the Tezos co-founder, in general, recent events have been more or less predictable. The insolvency of Three Arrows Capital suggests that the crisis of the cryptocurrency hedge fund was “uniquely bad.” Brightman is confident that cryptocurrency companies facing a financial crisis due to the collapse of Terra or a wave of defaults were not really viable:
“You can’t create a sustainable protocol or a business based on the theory that numbers will always go up.”
Cryptocurrency lender Celsius, after paying off debts, unexpectedly filed an application for immediate bankruptcy in the court of the Southern District of New York. A New York federal court froze the remaining assets of cryptocurrency hedge fund Three Arrows Capital – shortly after the company filed for emergency bankruptcy. A wave of crises swept crypto companies after Terra faced a default in a falling market. Companies linked directly or indirectly to the project faced losses that put their existence at risk.
#crisis #reminded #laws #economics #work #crypto #industry