After the FTX Bankruptcy "Earthquake," Where Will Web3.0 Go?
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After the FTX Bankruptcy "Earthquake," Where Will Web3.0 Go?
Let us hope that we can learn from this "earthquake" in the crypto market how to survive in the market, and together welcome the arrival of the Web3.0 era.
Navigating Web3 tides with focused insights
Author: JamesQu@PlatON
Having lived in Tokyo for many years, I’ve long grown accustomed to earthquakes. Yet when a massive and long-lasting quake strikes, I still feel shaken—by the terrifying sounds of buildings absorbing seismic energy, and by news reports of casualties and destruction.
For convenience, I liken the collapse of FTX to a “major earthquake” that triggered panic across the crypto market.
This “earthquake” was comparable to a magnitude 7 event, sending shockwaves through FTX’s investor network and its portfolio projects, profoundly impacting other ecosystems. It reminds me of the dot-com bubble burst in 2000, the Lehman Brothers financial crisis in 2008, and more closely related to crypto, the bankruptcy of Tokyo’s Mt. Gox exchange in Shibuya.
The Mt. Gox incident has long been settled, but further details surrounding FTX’s collapse are still unfolding.
We can only hope no assets were stolen due to hacking, sparing end users from enduring a long and painful claims process. At this critical moment, the governance capability of FTX’s management team is being tested. However, investors should also avoid panic selling, as they might still recover their losses and profit when the next bull market arrives—if they’re lucky enough.
In my view, FTX’s collapse resembles the 2000 dot-com bubble burst more than anything else.
Back then, greedy capital chased after ambitious young entrepreneurs seeking quick fortunes. Countless investment projects and startups failed to generate revenue, suffered cash flow crunches, and eventually went bankrupt. A chain reaction followed: overnight millionaires emerged, numerous startups collapsed, giant corporations saw their investments wiped out, and a bear market set in… But the good news was that investment in internet infrastructure continued to grow, laying the foundation for the coming spring of Web2.0. In short, all the effort was not in vain.
From my observation, there are many positive and healthy innovations in the crypto space, such as the mature development of Zero-Knowledge Proofs (ZKP), and ongoing progress in Multi-Party Computation (MPC) and Homomorphic Encryption (HE). Active investments have attracted vast talent into the field, ultimately building robust infrastructure. While some investments may have been overly aggressive or hasty, I have still noticed encouraging signs.
From another angle, incidents like this become hot topics that serve as valuable lessons for those unfamiliar with the crypto market. The fallen FTX was never a decentralized cryptocurrency exchange (DEX), but rather a centralized exchange (CEX) subject to traditional regulation. True Web3.0 advocates transparency and verifiability.
Take myself as an example—as a user of FTX Japan, I still don’t know how to verify where my user assets are stored or whether they are securely protected.
I believe decentralized exchanges are a better choice, because users retain full control of their wallets at all times.
If individuals could control their wallets via MPC-based security, there would be far less panic. And if investors had participated as threshold signature signers in FTX’s core fund operations, could those reckless investments have been prevented?
Hopefully, we can learn from this crypto “earthquake” how to survive in the market, and together welcome the arrival of the Web3.0 era.
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