FTX, the US-based crypto platform that suffered from liquidity shortages and shook the crypto market in November, resulted in nearly US$200 billion (around Rs.16,53,499 crore) wiped out from the market. The drastic reaction from investors withdrawing capital from digital assets caused several crypto companies to gasp. According to Indian Web3 builders, this FTX collapse, despite its severity, must be seen as a “blessing in disguise” that has already begun to push for a more finely tuned financial structure around crypto that would reduce the often-criticized element of volatility.
“The companies that don’t have strong foundations and make strong investments are being flushed out,” said Tarusha Mittal, COO and co-founder of Web3-focused app store, Dapps and group farming and staking protocol UniFarm.
Speaking to Gadgets 360, Mittal said so crypto player and investors need to be more aware than ever that Web3 is all about decentralization.
“FTX collapse is good for the industry on a macro level. collapse of FTX is a good reminder that crypto is all about removing centralized entities and regaining financial responsibility and independence,” Mittal noted.
Web3 is popularly referred to as the upcoming next generation of the internet as we know it today. Instead of being controlled by servers and big technology companies, Web3 will be based on blockchains that are not controlled by any central body and therefore offer complete freedom with irreversible records of all processes.
cryptocurrencies, metaverse, NFTsand Decentralized Finance (DeFi) — are the new technologies that will provide special elements that will be part of Web3.
Mahin Gupta, founder of digital wallet service provider Liminal, also commented on the FTX situation. He said larger incidents like this could spur the rollout of key Web3 tools that are available but not yet the first choice for investors.
“Moves to DeFi at the earliest is the key to learning from the FTX collapse and the responsibility rests with industry players to build a safety net around user funds. Self-custodial or licensed custodial services should be actively used for storing digital assets that are under the full control of users rather than corporations,” Gupta told Gadgets 360.
After FTX filed for bankruptcy, several crypto exchanges apparently lost active users.
Exchanges established from India and other nations such as Binance, KuCoin and Giottius audits carried out of its reserves to ensure customers that their funds are safe in times of emergency bulk withdrawals.
Industry leaders still believe the crypto community is ready to start next year with more transparency than we started in 2022.
“Significant technological advances have been made in the industry to improve transparency and security. The downturn in the crypto and stock markets is the result of various macroeconomic factors that have impacted investor sentiment. As the new year begins, this is a good opportunity for crypto investors to review their portfolios and plan their investments and security solutions for better results,” Edul Patel, CEO and co-founder of crypto investment firm Mudrex, told Gadgets 360.
Cryptocurrency is an unregulated digital currency, not legal tender and is subject to market risks. The information provided in this article is not intended to and does not constitute financial advice, trading advice or any other advice or recommendation of any kind offered or endorsed by NDTV. NDTV is not responsible for any loss arising from any investment made based on an accepted recommendation, forecast or other information contained in this article.
