The Crypto Market’s Rocky Road
In 2022, the crypto industry experienced a tumultuous ride, particularly following the notorious crash of Terra and its algorithmic stablecoin, USTC. However, amidst the chaos, Kraken Australia’s managing director Jonathon Miller suggests that the core technology driving many blockchain projects remained robust. While some lenders faced challenges due to mismanagement, underlying blockchain protocols, especially those in decentralized finance (DeFi), stood their ground like an old oak in a storm.
DeFi – The Unshakeable Survivor
Miller emphasized that despite reports from CoinGecko showing a 74.6% market cap decline in DeFi during Q2 2022, the actual technological foundation didn’t crumble.
“You saw decentralized markets, decentralized lending models, DeFi in general, not fall over,”
he noted. This indicates that while certain business models stressing traditional finance principles may falter, the decentralized structure of many platforms like Ethereum has demonstrated notable resilience.
Identifying the Real Culprits
When it comes to the issues that surfaced, Miller pointed out that the problems often traced back to the design of the underlying protocols.
“There’s a Treasury management problem, not a blockchain problem,”
he argued, suggesting that the failure of Terra’s model wasn’t an indictment of blockchain itself, but rather poor choices made by its architects.
Kraken’s Strategy in the Bear Market
In discussing Kraken’s position during this bear market, Miller reflected on the company’s history and strategic approach. While many exchanges splurged on advertising during the previous bull run, Kraken took a more conservative route.
“We’re in a slightly different position as perhaps some of the other exchanges,”
he explained, highlighting Kraken’s focus on sustainable growth through word-of-mouth rather than flashy marketing stunts. It’s like the tortoise versus the hare, but in a digital realm.
Future Prospects for Crypto
Miller remains optimistic about the Australian crypto ecosystem, noting promising signs of institutional interest. With banks like ANZ experimenting with their own stablecoins and major players like Mastercard showing enthusiasm for blockchain initiatives, the future looks bright.
“Institutions making use of the underlying tech…could help eliminate some of the speculative heat we saw in 2022,”
he remarked. Perhaps in the crypto world, a little less speculation is a good thing—sort of like adding a pinch of salt to your soup; too much can ruin it!
+ There are no comments
Add yours