TL;DR
- Emin Gün Sirer, CEO of Ava Labs, warns of the rise of ‘trash L2s’ in the crypto markets, predicting a wave of dangerous projects in the next bull market, especially in the wake of FTX CEO Sam Bankman-Fried’s downfall.
- Gün Sirer urges the crypto community to be vigilant about red flags that characterize trash L2s, such as mismatched project narratives and tech, pre-launch token dumping by founders, and manipulation of low-float token valuations.
- He calls for more scrutiny against industry voices and suggests that genuine innovators, like Avalanche and Solana, tackle pressing issues in the crypto sphere, such as scalability and performance, as a criterion to distinguish substantial projects.
Emin Gün Sirer, the CEO of Ava Labs, has issued a stark warning about the rise of ‘trash L2s’ in the crypto markets. He predicts that the next bull market will see a wave of dangerous riff-raff projects gaining prominence. Gün Sirer’s warning comes in the wake of the downfall of FTX CEO Sam Bankman-Fried (SBF), who is currently an inmate at the Brooklyn Metropolitan Detention Center.
Hey y'all,
We all ignored the huge red flags associated with SBF because "he looked smart" and "he made a lot of money." Then it turned out that he was dumb as rocks, was a sociopath, and was just stealing our money.
The next cycle is going to be even more noisy, with even…
— Emin Gün Sirer🔺 (@el33th4xor) March 23, 2024
According to Gün Sirer, SBF’s absence has created a vacuum that will likely be filled by potentially worse versions of fraud, particularly in the form of various layer-2 solutions.
“The next cycle is going to be even more noisy, with even worse behavior. It has become really easy to launch a trash L2,” Gün Sirer said. He urged the crypto community to be extra vigilant about the red flags that characterize trash L2s.
Among these red flags, Gün Sirer listed project narratives that do not match project tech, projects that sell tokens now to raise money for future technology, founders dumping personal tokens pre-launch, and very low float tokens. He particularly criticized SBF’s manipulation of low-float token valuations and borrowing against them.
Ava Labs Advocates for Vigilance Amidst Emerging Crypto “Sociopaths”
Gün Sirer called for more scrutiny against prominent voices in the industry and warned of potential “sociopaths” emerging in the wake of Bankman-Fried. He believes that the current blockers in crypto have to do with supporting multiple use cases on the same platform and integrating with traditional finance.
In an environment filled with technical terms and industry-specific language, it can be challenging to distinguish between substantial and superficial projects. Sirer suggests a simple criterion: does the project under consideration tackle the pressing issues currently plaguing the crypto sphere? Genuine innovators in this field, like Avalanche and Solana in the past, have provided concrete solutions to urgent problems such as scalability and performance.
In conclusion, Gün Sirer’s warning serves as a reminder of the need for vigilance and scrutiny in the crypto markets. As the industry continues to evolve, it is crucial to remain alert to the potential dangers and pitfalls that may arise.
