Emin Gün Sirer, CEO of Ava Labs, warns that crypto markets will see a new wave of dangerous rig projects come to the fore during the bull market.
Gun Sirer say on social media platform .
With Bankman-Fried gone, Gün Sirer says other, potentially worse versions of fraud will fill the vacuum, likely in the form of various layer 2 solutions.
“The next cycle will be even noisier, with even worse behavior. It has become very easy to launch a trash L2…
So we need to be extra vigilant about the warning signs that characterize waste L2s:
* The project story does not match the project technology. For example, centralized sequencers and layer 2s that are not tamper-proof are garbage that conflicts with crypto.
* Projects selling tokens now to raise money to do the work that will lead to another technology later. The third part of the Howey test has something to say about this, and it starts with ‘S’ and continues with ‘ecurity sacrifice’.
* Founders dump personal tokens before launch. Teams need to be locked down. An eight-figure pre-launch sale to “thank the staff” is about as okay as SBF stealing everyone’s money for being an “effective altruist.”
* Very low float tokens. SBF played this game of manipulating the valuations of low-float tokens and borrowing against them. Enough said.”
The CEO calls for greater scrutiny of prominent voices in the sector, and to watch out for potential ‘sociopaths’ emerging in Bankman-Fried’s wake.
“Crypto only has a few true blockers at any given time. For example, in the last cycle, scalability and performance were the outstanding issues, and Avalanche and Solana offered two approaches to address them. Today, I believe the blockers have to do with supporting multiple use cases on the same platform and integrating with TradFi – but maybe I’m wrong and others may have their own ideas about what’s blocking adoption by the next billion people.
Whatever these blockers are, say them out loud and ask, “Is this person bringing something truly groundbreaking to the table to address the biggest issues facing crypto today?” Would I invite this person to my family dinner and could they explain why they are uniquely positioned to solve it?’
Because the bullshit L2 game is trivially simple, and we could be dealing with a bunch of new sociopaths lining up to fill the void left by SBF.
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Generated image: Midjourney