Pavel Durov – founder and CEO of messaging application Telegram – believes the FTX crash happened because the blockchain industry has recently deviated from its decentralized nature. He claimed that a few people abused their power, which led to the spectacular collapse.
The Russian-born entrepreneur said that Telegram’s next goal is to create wallets and decentralized exchanges so that crypto traders can have maximum protection when operating in the sector.
The main problem is “excessive centralization”
Durov is yet another person commenting on the recent decline of the crypto exchange FTX, saying that the device was completely centralized, and that control was in the hands of a few people. He believes they “began to abuse their power”, which led to the crash and the colossal investor losses.
According to Durov, such adverse events will be eliminated if blockchain-based projects go “back to their roots – decentralization.”
“Cryptocurrency users should switch to trustless transactions and self-hosted wallets that do not rely on any single third party,” he argued.
Durov encouraged developers to establish “fast and user-friendly decentralized applications for the masses.” He said it took him a small team and just five weeks to build Fragment – a fully decentralized blockchain platform based on The Open Network (TON). Fragment has been quite successful, selling around $50,000 worth of usernames in less than 30 days, he added.
The Russian assured that Telegram’s next step is to introduce a number of decentralized tools, such as non-custodial wallets and decentralized exchange for “millions of people”.
“In this way, we can fix the errors caused by excessive centralization, which failed hundreds of thousands of cryptocurrency users,” he said.
Telegram’s brain child
The Open Network (formerly called the Telegram Open Network) was designed by the Durov brothers (creators of the messaging application). The idea of the project was to offer fast blockchain transactions, minimal fees and cause a smaller impact on the environment.
Nevertheless, the launch in 2018 was not so smooth. CEO Durov had to deal with a series of scammers and fake accounts on Twitter until the US SEC approved the ICO sale.
The watchdog temporarily restricted the distribution of GRAM tokens (digital assets based on the TON blockchain platform) in October 2019. The commission claimed that the first buyers of the coin could resell their holdings and thereby distribute unregistered securities.
The confrontation led to a court case in which Telegram lost and withdrew its participation from the TON network. The messaging app also started a refund process, repaying early investors $770 million and placing $1 billion worth of 5-year bonds to cover the debt.
The TON platform has its native token called Toncoin. The market cap is over $2 billion, while the current price hovers around $1.80.
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