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Pavel Durov – Founder and CEO of the messaging application Telegram – thinks the FTX crash occurred because the blockchain industry has recently deviated from its decentralized nature. He argued that a few individuals abused their power, leading to the spectacular collapse.
The Russian-born entrepreneur said Telegram’s next goal is to create non-custodial wallets and decentralized exchanges so crypto traders could have maximum protection when operating in the sector.
The Main Problem is the ‘Excessive Centralization’
Durov is yet another person to comment on the recent decay of the crypto exchange FTX, saying the entity was entirely centralized, and the control was in the hands of a few people. He believes they “began to abuse their power,” which prompted the crash and the colossal investor losses.
According to Durov, such adverse events will be eliminated if blockchain-based projects go “back to their roots – decentralization.”
“Cryptocurrency users should switch to trustless transactions and self-hosted wallets that don’t rely on any single third party,” he claimed.
Durov urged developers to establish “fast and easy-to-use decentralized applications for the masses.” He said it took him a small team and only five weeks to build Fragment – a fully decentralized blockchain platform based on The Open Network (TON). Fragment has been quite successful, selling around $50,000 worth of usernames in less than 30 days, he added.
The Russian assured that Telegram’s next step is to introduce a variety of decentralized tools, such as non-custodial wallets and decentralized exchange for “millions of people.”
“This way, we can fix the wrongs caused by the excessive centralization, which let down hundreds of thousands of cryptocurrency users,” he stated.
Telegram’s Brainchild
The Open Network (previously called Telegram Open Network) was designed by the Durov brothers (the creators of the messaging application). The idea of the project was to offer fast blockchain transactions, minimal fees, and cause a minor impact on the environment.
Nonetheless, the launch in 2018 was not that smooth. CEO Durov had to cope with numerous scammers and fake accounts on Twitter until the US SEC approved the ICO sale.
The watchdog temporarily restricted the distribution of GRAM tokens (digital assets based on the TON blockchain platform) in October 2019. The Commission argued that the initial buyers of the coin could resale their stash and thus distribute unregistered securities.
The confrontation led to a court case in which Telegram lost and withdrew its participation from the TON network. The messaging app also started a refunding process, repaying early investors $770 million and placing 5-year bonds worth $1 billion to cover its debts.
The TON platform has its native token called Toncoin. Its market capitalization is over $2 billion, while its current price hovers around $1.80.
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