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2022 in crypto - summary of 4 disasters
2022 is coming to its end and the least we can say is that it was a disastrous year for crypto. So let's stop shilling, let's look at the raw truth square in the eyes ... this is a cold cold crypto winter.
What are the four disasters of this 2022 crypto year?
1. Luna crash
It all started back in May with the Luna crash. UST was a very interesting algorithmic stable coin that was supposed to free us from centralised stablecoins like Tether (aka USDT) and Circle's USDC.
The algorithm was backing UST with Luna, and the Luna Guard Foundation had aquired a big amount of bitcoins to also back up UST with BTC.
Do Kwon was the South Korean hero of this machinery. As self confident as can be, boasting how it was entertaining for him to see other coins crash.
In a matter of 2 days, UST lost peg and the algorithm was sucked into a doom vortex. Luna supply went from 300 millions to 5 billions the next day, to 5 trillions the day after. Luna crashed from around $30 to less than $0.0001. The Anchor protocol, which was, at this time, one of the safest place where you could put your crypto to earn a nice APR, was destroyed. The Terra blockchain stopped and 40 to 50 billion dollars worth of crypto vanished.
The aftermath of the implosion killed companies, like 3 Arrows Capital, Celsius and others.
2. FTX blow up
The second annihilation was FTX. Thanks to some tweet from CZ, (Binance CEO).
The FUD spread like wildfire, and after a cruel Sunday where around 6 billion dollars worth of crypto were withdrawn from FTX, the second biggest crypto exchange, withdraws were paused ... for ever. This left billions in user deposits trapped in that FTX / Alameda scam.
Wrecked and wrecked.
These were the two scandals that broke the headlines. These were the two disasters who wrecked tens of thousands crypto enthusiasts.
But there are two other disastrous things that went under the radars, but are just as horrible in the opinion of a humble zebra.
Yes, this is stiff drink time.
3. Ethereum's treason
I've already mentioned it in a few of my stories on Cherrific, (Is Ethereum still neutral?, and Ethereum Neutrality: worse than I had thought) but Ethereum is now a blockchain that is a traitor to its cause: neutrality.
If you want more info about what neutrality is, simply read my previous articles or just have a look at MEV watch.
All companies listed in this Censorship Offenders Leaderboard are companies that enforce USA's OFAC rules. What's at stake here is simply the possibility to use Tornado Cash: a transaction mixer, that is the only way so far to allow some privacy on a blockchain.
Privacy? All the companies listed here just don't care.
More than 70% of Ethereum's block validators are against privacy and blockchain neutrality. Wasn't Ethereum supposed to be permissionless?
Not for most of the crypto industry. Bitfinex, Binance, Kraken, Coinbase ... traitors to the core ideas of crypto.
And the Ethereum community is doing nothing against this.
I'm not saying money laundering is not a matter of concern. Hackers, tax evaders should be prosecuted, but not at the price of the privacy of every single citizen.
Ok, now that you know that we've been double wrecked and betrayed by our industry leaders, will you dare following on reading?
4. Cryptospace is a desert
One last truth that all those who brag about the amazing TLV that's sitting on their blockchains don't want you to look at. This last miserable truth, here it is: crypto space is a desert.
Go to DappRadar, the website that lists all main decentralised applications, then look at the UAW (Unique Active Wallets) figures. There are just pathetic.
The 10th biggest Dapp on Avalanche has 183 Unique Active Wallets.
Unique Active Wallets on Avalanche
On Near blockchain, the 10th Dapp has 90 active users.
Look at the famous Cardano, the blockchain with a market capitalisation of more than $8B:
Cardano Unique Active Wallets count per Dapp
Do you really think a blockchain that is used by less than 8 000 people should be worth more than 8 billion dollars?
Let's have a look at my favorite blockchain now: Fantom
Unique Active Wallets on Fantom
When you consider that a lot of users are double counted if they use several Dapps, are we more than 1 000 people on this planet to use that blockchain on a daily basis? Is Fantom a ghost chain?
But when you look at other chains like Solana, I'm not going to say they are doing better. They are just doing less worse.
And even for the king of smart chains, Ethereum, the most used Dapp is OpenSea with 20k UAWs. Second comes Uniswap with 7k users ... worldwide.
We are still a loooonnnnng way off mass adoption.
The truth about blockchains at the end of 2022, is that they are tiny dwarves when you compare them to Web2 behemoths.
Even chatGPT, that idiot savant which I'll soon write a story about, got one million users in just a few days.
Beyond speculation, hardly none of the blockchain based applications has reached mass adoption. If we want blockchains to survive this winter, we'll have to figure out why ... and improve.