The implosion of crypto exchange FTX has shocked the industry financially and led to a “confidence crisis” in the world of digital assets, Lex Sokolin, head economist of decentralized protocols at software company ConsenSys, said.
And yet Sokolin told CoinDesk TV’s “First Mover” on Tuesday that “prices are not the end goal” and crypto’s future shouldn’t depend on the market’s immediate place today.
“They might be a reflection of value … but they’re not the thing that you’re trying to optimize,” Sokolin said. “What you’re trying to actually optimize is people building things that are novel, useful and that anchor in new technology.”
Read more: Solana Foundation Invested in FTX, Held Millions in Sam Bankman-Fried-Linked Cryptos on Exchange
He added that crypto’s long-term trajectory depends on the new technology pushing “the frontier of what’s possible.”
At the same time, Sokolin said he’s worried that people will stop seeing “crypto economics as a legitimate field” and begin to “lose confidence,” giving the example of Solana.
On Monday, the Solana Foundation said in a blog post that it had upward of $135 million worth of SRM tokens and about $3.4 million FTT tokens stuck on the FTX exchange. FTX founder Sam Bankman-Fried was a vocal supporter of Solana, and Serum, a decentralized exchange built on the blockchain. Both were hurt by Bankman-Fried’s fall from grace.
“I’m worried that a lack of trust in the Solana ecosystem will spread to a lack of trust in the model,” Sokolin said, adding that the funds stranded on FTX’s platform could also damage how token engineering and mechanism design are viewed by users.
There is a distinction between the two, he said, noting that purchasing a token on a network and engaging in a protocol are different.
Despite the turmoil caused by FTX, a Bahamas-based exchange that filed for Chapter 11 bankruptcy last week and that faces prosecution, Sokolin said it’s important to consider the “organic entrepreneurship” in crypto, pointing out that blockchains such as Ethereum are continuing to “build collaboratively.”
Read more: Solana DeFi Sees Almost $700M in Value Wiped Out on FTX Fallout
