This week, the crypto industry was shaken by the downfall of another seemingly invincible company. FTX, which was recognized as one of the most trusted exchanges in the industry, was apparently being extremely irresponsible with customer funds, and inflating their reserves with their own tokens.
The numbers are unclear, but it appears that they could be anywhere between 5 and 10 billion dollars in debt.
Sadly, many users still have their funds on the exchange, with no answers as to if they will ever get their money back. There is also a risk of contagion that could spread across the market too, as the whales involved with FTX will now be dumping their coins on the market to cover their debts.
This has already led to some bad press for the industry, and has likely sowed some doubts in the hearts of many investors. However, these are unfortunately the kinds of things that happen in emerging industries. There are opportunities for incredible rewards, but a significant amount of risk comes with that.
It is also important to point out that FTX was an extremely new entrant into the crypto space, and its founder, Sam Bankman Fried, came from Wall Street. His fortune appeared overnight, and much of it was an illusion built on speculation and fraud, but he put on a very good show about how close he was with regulators, so he was able to earn a lot of trust.
The crypto networks themselves, the DeFi ecosystem, and crypto native exchanges like Kraken, Binance and Coinbase are still working just fine, and promising to release a proof of reserves in the following month to prove that customer funds are protected.
Right now is a very dark time, but the future of the industry is still bright. Our confidence in what we are building at Solid World has not been shaken at all. We believe that we are creating something that will bring significant value to the world, and nothing that happens with the markets, or other startups in the industry like FTX, will change that. This type of situation has happened many times in crypto, and we have always come out stronger on the other side.
There are also many parallels between the early days of the internet in the 1990s and the early days of crypto now. There were problems with speculations and bubbles in the development of the internet, but world-changing products were developed that helped to improve the lives of billions of people.
Even though crypto has only been around for a few years, we are still at the very beginning of this journey, and many of the most important applications still haven’t launched yet. Solid World DAO is a perfect example of this. We believe we will be able to bring significant new value into the world, not just in financial terms, but by ecological standards as well.
We are just getting started, and we are not alone. Some of the smartest people in the world have been drawn to this industry because of the opportunities here, and they are surely working on some incredible products too.
