Dragonfly Partners Interpret the FTX Explosion Incident: The Worse Situation Has Not Yet Arrived, but the Industry Continues to Move Forward

Written by: Haseeb, Partner at Dragonfly

Compiled by: Kxp, BlockBeats

The FTX explosion has caused turmoil throughout the industry, with its impact reaching everyone in the Crypto world. Dragonfly partner Haseeb expressed his hopes to restore confidence in the industry through a post on his personal social media, which is summarized and translated as follows:

If you have suffered significant losses due to the FTX incident, I truly feel for you. I assure you that everything will get better. After experiencing this event, I also feel quite exhausted, and I have begun to contemplate the direction this matter will take and what kind of impact it will have on the entire industry.

First, global regulation will definitely become stricter. The collapse of FTX will not only affect the U.S. market but will also trigger a global disaster, and it is far more serious than the situations with 3AC or Terra at that time. This is because, unlike fraudulent lenders or gamblers, Sam is an elite talent in the entire industry.

Second, the worse situation has not yet arrived; we are still unclear about the many entanglements involving FTX/Alameda, and the indirect effects have yet to manifest. People always announce good results first, and only when they can no longer support it do they reveal the bad news. Lehman Brothers only announced bankruptcy six months after Bear Stearns collapsed. Therefore, we should all manage our risks and ensure that we are prepared to face all challenges. In the coming time, survival is our top priority.

Moreover, the media will begin a long and sensational public trial of the internal partners of FTX, Alameda, and Sam. Those quirks or peculiar behaviors that were once praised as genius will soon be reshaped into pathological behaviors akin to Elizabeth Holmes. We will see ongoing reports detailing who knew what, where the money was spent, who made the decisions, and so on. However, all of this is no longer important. What we need to understand is how the entire system operates, and we should approach future work with a more cautious attitude, but that is all we can do.

These reports will undoubtedly spark a frenzy of public shaming, but we must not focus on this, as taking pleasure in it is itself disgraceful. Moreover, it will distract us from the important work at hand.

After this incident, many people will surely say that it seems like everyone in Crypto is a scammer or an artist who only talks nonsense, and that no one is trustworthy. In my view, these people are just talking and are completely unfounded. Furthermore, we should strengthen regulation according to the existing TradFi framework. Exchanges/intermediaries should be regulated so that they can no longer engage in illegal activities.

But all of this indicates that DeFi operates not only flawlessly but also completely transparently. This is because such types of fraud cannot occur in DeFi. Uniswap, MakerDAO, and Compound all operate well, handling every transaction and withdrawal. Since the code specifies the relevant content, they cannot deceive anyone. Thus, Crypto has adopted this motto: Don't trust, verify; don't trust humans, trust code.

This distinction will disappear in the upcoming turmoil. If no one is willing to tell this story, then let us tell it. The scale of Crypto that we are continuously building is vast; it is not only about technology but also about faith. The core error of all religions is to treat humans as objects of worship, which is vividly reflected in the Sam incident. This reminds me of Satoshi Nakamoto, who has remained anonymous from the beginning. This is because he knows that the importance of Crypto is greater than any individual.

Crypto has given us freedom, which is also why we are still here. It liberates us from the concept of "others," meaning we no longer have to blindly trust others, nor do we have to be controlled by individuals, dictators, or corrupt financial institutions.

Crypto has also liberated money, freeing it from human systems, stupidity, and corruption. In this process, people often make many mistakes. But we must always recognize our mission, which is why I came to this field and fight for it.

Although many people feel that money in Crypto is easy to earn, the reality is not so. Anyone who has been here long enough will tell you that most people do not make much money. However, ultimately, as long as we persist long enough, Crypto will allow us to earn money. Therefore, in Crypto, survival is the first priority. Otherwise, you will not see what all of this will turn into.

I am confident that Crypto will definitely change the world; it will change the way people and machines interact with money and value. Fifty years from now, the Crypto world will undergo tremendous changes. So, whether you are a builder, developer, collector, or simply an enthusiast, please continue your work. Crypto will not stagnate because of this incident; we just need to move forward.