Ethereum co-founder Vitalik Buterin reignited the debate about crypto governance when quotes from a November 2022 interview resurfaced in the wake of the current focus on blockchain governance.
Buterin stated that the failure of Terra’s Luna was more than just a technological issue, but also a result of the culture in which it thrived. He also stated that the fact that Luna was not built on Ethereum was no accident.
The risks revealed by previous market crashes are being double-checked by regulators, developers, and investors. Ethereum is still the largest smart contract platform in terms of developer engagement and total value locked.
Thus, Buterin’s words are interpreted as a broader warning regarding the impact of culture, incentives, and leadership on crypto results.
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Buterin stated that blockchain networks have reputations that influence the projects they will support. He explained that Ethereum developed as a community-driven, open-source platform for discussion, review, and evolution, making it difficult for poor systems to receive blind support.
He cited Terra’s Luna and its algorithmic stablecoin as a model that received a boost from hype rather than serious and sustained attention.
Do Kwon, the founder of Terra, was one of the important people in the success of the project before it collapsed in 2022, destroying value worth tens of billions of dollars. Buterin said that such ecosystems are likely to invite such people again.
Ethereum, he said, can’t really prevent abuse because it’s an open system. But the Ethereum community can decide not to participate in ways that prioritize growth over resilience. This, he said, is one of the biggest defenses of Ethereum.
Buterin also highlighted the reaction of some Bitcoin supporters to political support. He gave an example of El Salvador’s move to make Bitcoin legal tender, led by President Nayib Bukele.
The implementation required businesses to accept Bitcoin from the top, even if they were not ready or the people were not fully on board. At first, people were pleased with this decision, but the use of Bitcoin remained limited even after the prices dropped.
Buterin thinks that this is an indication that the adoption of cryptocurrency based on political influence rather than demand can be unsuccessful.
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