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FTX Derivatives Exchange’s billionaire CEO Sam Bankman-Fried, known as SBF, has faulted the marketing strategies that were employed by the embattled Terra blockchain to gain acceptance from the public.
These comments come on the heels of the protocol’s two tokens, LUNA and UST, losing their value and peg to the US Dollar respectively.
While many people have been comparing the crash of Terra to the collapse of Theranos, a once innovative healthcare technology that was founded and managed by Elizabeth Holmes. To Bankman-Fried, the downfall of both startups cannot be compared as Elizabeth lied to investors about a technology that was not working in order to keep getting funding.
He believed the operations and management of Terra, led by Do Kwon, were transparent. The face of the Terra ecosystem has not failed to talk about the fact that UST is not backed by the US Dollar but by a set of volatile cryptocurrencies like Bitcoin and Terra. Should these coins plunge, the stablecoin stands the risk of also losing its peg.
While Bankman-Fried noted that he is not making excuses for Kwon and the Terra purveyors, he believes the fall of the protocol should be markedly classified differently from that of Theranos.
“Luna was a case of mass enthusiasm, excitement, and–frankly–marketing and memes–driving people to believe in something which was going to falter according to the publicly available information. That marketing was probably bad. But it wasn’t the *same* type of bad as Theranos,” He said in a Twitter thread over the weekend.
The fall of the Terra protocol has been classified as a watershed moment for the cryptocurrency ecosystem. While it seems as though the network cannot be salvaged, a number of support and proposals to revive the ailing blockchain is being proposed as we speak.
In a bid to make his followers understand that Terra is not necessarily conceived as a Ponzi scheme, Bankman-Fried said other legitimate companies, including Netflix, have also lost at least 50% of their value since the start of the year.
Image source: Shutterstock
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