The FTX saga is still casting its shadow on the crypto sector and while many projects were on the front line of market turbulence, CEO of the messaging application Telegram Pavel Durov commented that the FTX crash is due to increased centralization in an otherwise decentralized, at least by idea, sector.
Indeed, Durov questioned the real reasons for the crash of FTX, commenting that the was entirely centralized, and the control was in the hands of a few people.
"The Blockchain industry was built on the promise of decentralization but ended up being concentrated in the hands of a few who began to abuse their power. As a result, a lot of people lost their money when FTX, one of the largest exchanges, went bankrupt," Durov added.
The solution – more decentralization
In order to combat the centralization issues of the crypto sector, Durov announced that the development team behind Telegram is working on a set of decentralized tools, including non-custodial wallets and decentralized exchanges for millions of people to securely trade and store cryptocurrencies.
“Cryptocurrency users should switch to trustless transactions and self-hosted wallets that don’t rely on any single third party. This way, we can fix the wrongs caused by the excessive centralization, which let down hundreds of thousands of cryptocurrency users,” Durov also noted.
Meanwhile, Telegram’s co-founder also addressed that developers also helped centralization, as they are the ones who steer the blockchain industry away from centralization via quick and UX-friendly decentralized apps, which are now feasible.
One of Durov’s decentralized projects is Fragment - a fully decentralized username auction platform, which took only 5 weeks and 5 people to put together. The result - $50 million worth of usernames sold there in less than a month, with Durov stating that the platform would soon expand to more than usernames.
What about TON?
However, Durov has his fair share of regulatory ordeals when it comes to decentralization, as The Open Network (previously called Telegram Open Network) was intended to give its users fast blockchain transactions, minimal fees, and cause a minor impact on the environment.
The idea was launched in 2018 but faced waves of scammers and fake accounts on Twitter until the US SEC finally approved the ICO sale. The joy was shortlived, though, as in October 2019 the SEC banned the distribution of GRAM tokens (digital assets based on the TON blockchain platform) with concerns that initial buyers of the coin could resale their stash and thus distribute unregistered securities.
Telegram filed a case, but lost and left the development of the TON network, repaying early investors $770 million and placing 5-year bonds worth $1 billion to cover its debts. However, Durov is still a TON proponent, stating that "with technologies like TON reaching their potential, the blockchain industry should be finally able to deliver on its core mission - giving the power back to the people."