Forbes: The collapse of UST will be the foundation for innovation in the crypto market

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Forbes magazine analysts believe that the fall of the UST stablecoin is a failed attempt to challenge centralization, which will lead to the development of better decentralized products.

Kriptovalyutny market with the arrival of default Terra project has gone through a “fifth reset”. Article author compares
the LUNA incident with a “bearish trend” in the market, which has been observed several times in the past years by the crypto community. The publication’s experts note that all cases of falling cryptocurrencies sooner or later led to an increase in market capitalization and new turns in the development of the industry.

The situation with steyblkoinom UST caused the reaction to kriptorynke akin to bankruptcy Mt. Gox in 2014, a catastrophe The DAO in 2016, the ICO to break the bubble in 2018 and the loss of 40% of the cost in March 2020, the digital assets.

Forbes experts believe that the collapse of LUNA is a good example of the greed of investors, which sometimes completely suppresses sound thinking and the instinct of self-preservation. On the other hand, according to the authors of the article, the fall of Terra may be the end of the era of algorithmic stablecoins, in which the community has lost confidence – as happened earlier with the ICO market.

The authors believe that reckless actions and greed served as a catalyst that launched Terra’s default, the rest is the result of the centralized nature of today’s global market. The launch of UST was a decision that once again should remind that despite the current overregulation of the markets, cryptocurrencies are primarily a decentralized product. According to Forbes, the creation of an algorithmic stablecoin is nothing less than a challenge to the fully centralized market of traditional stablecoins, with its market capitalization of $126 billion.

“The tragedy is that while greed was certainly a key reason for the fall of Luna, the creation of the cryptocurrency was driven by a desire to protect the decentralized spirit of the project, which was effectively abandoned by the growing stablecoin industry,” the authors of the article say.

Despite the failed attempt, the next cryptocurrency product will be more successful and viable, according to Forbes. As an example, analysts of the publication cite the fact that two exchange giants Coinbase and Kraken have occupied the niche of Mt. gox. And the fall of the DAO and the ICO scam became the foundation for the decentralized financial system (DeFi).

Recall that in 2021, the analytical company ShapeShift stated that the boom in the DeFi industry led to the development of algorithmic stablecoins, which were designed to help reduce market volatility.

Source: Bits

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