We have to take the FTX debacle at face value and admit that the crypto industry is still plagued by undercooked or shady projects. Thankfully, the dominance of sound product ideas and community-driven platforms is another defining aspect of the contemporary crypto domain.
If we want to preserve the success that we’ve reached and build on a solid foundation, understanding the shortcomings revealed after the SBF’s misbehaving is crucial.
Technology needs to move to web3
Denying that FTX was a massive Ponzi scheme is not something that we can afford to do. Unlike many other crypto exchanges, FTX did not have the required infrastructure and strong products to offer.
It was close to impossible to see these issues without venture capital firms doing their due diligence. Sadly, they didn’t.
However, financial shortcomings and issues with management are not the only ones that became obvious. A perfect example is an issue with NFTs that were minted on FTX.
Regardless of what you think about non-fungible tokens, these are goods that were produced on a platform and should have had standards.
Whether it was a JPEG or a video file that was attached to a token, does not matter. What matters is that these items must be accessible for as long as possible without any external interventions. The issue with FTX is that the exchange hosted all images and other items related to minted NFTs on their web2 servers which went down as soon as the company announced its bankruptcy.
At the moment, owners of NFTs cannot access whatever was attached to their tokens because items were not hosted using a decentralized web3 technology. Instead, they were put on a typical server with centralized access and management.
Web3 is the only way to go for the crypto industry
NFTs are a good testing ground for other products that will inevitably appear in the crypto industry. Most of them will rely on decentralized data storage, management, and governance. Without advanced web3 solutions, these products will never take off the ground and attract users. Web3 is the top priority and the FTX collapse showed it particularly well.