The Tezos Co-founder says he was not surprised by Celsius filing for bankruptcy and believes that there are many other things in the industry that wouldn’t have worked out so let’s read more in our latest Tezos news.
The co-founder of Layer 1 blockchain Tezos Kathleen Breitman, said that the bankruptcy filing of Celsius Network is not really a surprise because such business models are not really sustainable in the long run. Celsius filed for Chapter 11 bankruptcy protection a month after suspending user withdrawals and redemptions beucase of a liquditiy crunch that was caused by the marekt conditions. The Tezos co-founder says:
“For those of us who have been in this industry for quite some time, it’s completely unsurprising that something like Celsius would go bankrupt because economics has laws that transcend the word blockchain, contrary to popular beliefs.”
According to the Tezos co-founder, recent events in the industry were predictable while others were not so predictable. She cited 3AC insolvency and noted that what happened to the crypto hedge fund was really bad. The hedge fund was one of the biggest venture capital companies in the crypto space and the company backed a lot of blockchain startups and projects like Polkadot, Solana, BlockFi Ethereum, and Terra. Three Arrows Capital started facing financial challenges after the collapse of Terra and the crash created a huge sell-off on the market with prices crashing to new lows. After the bloodbath, the hedge fund was not able to meet the margin calls from the crypto lenders which is why it underwent forced liquidation from BlockFi.
3ac still owes voyager Digital over $640 million but Voyager intends to pursue the recovery from the VC as the brokerage company commenced a voluntary Chapter 11 bankruptcy after suspending withdrawals. Some crypto companies faced a financial crisis and suffered from the effects of the Tera crash but Breitman believes that there were shakeouts from things that would not have worked anyway:
“You really can’t make a sustainable protocol or business based on the theory that numbers will always go up, which was most wheel’s risk model going into this.”
As earlier reported, The PoS blockchain Tezos deployed a major upgrade and changed its consensus algorithm in the ninth upgrade of the protocol. According to the press release, the upgrade is code-named Ithaca 2 and replaces the current consensus algorithm that is known as Emmy, with Tenderbake enabling lower back times and producing faster transactions as well as smoother-running applications.
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