- Ava Labs CEO has highlighted the purple flags to think about earlier than investing in new L2 tasks.
- In line with Sirer, ignoring these purple flags might result in an consequence much like the FTX collapse.
- Sirer defined crypto has only a few genuine blockers at a time and customers ought to look out for them.
Emin Gun Sirer, CEO of Ava Labs, has highlighted the purple flags customers ought to contemplate earlier than investing in new L2 tasks within the upcoming cycle. In line with Sirer, ignoring these purple flags might result in an consequence much like what occurred with Sam Bankman-Fried, whom many individuals adopted primarily based on superficial traits.
Sirer listed the purple flags by way of a latest publish on X, noting the absence of a story that matches the venture tech as the primary sign of unsustainability. For example, he believes centralized sequencers and L2s that lack fraud proofs are unsustainable and are at odds with crypto.
The Ava Labs founder doesn’t assist tasks that promote tokens now to lift cash to do the work that can result in one other expertise later. In line with him, the third prong of the Howey Check qualifies such workouts as Safety Choices.
In continuation, Sirer in contrast founders who dump private tokens pre-launch with Bankman-Fried. He believes their traits are related, with probably the identical outcomes. He additional famous that 8-figure gross sales pre-launch to “thank the employees” are about the identical as Bankman-Fried stealing customers’ cash as a result of he’s an “efficient altruist.”
Sirer thinks tasks with low-float tokens are dangerous and unsustainable. He cited Bankman-Fried’s sample of manipulating low-float token valuations and borrowing towards them for example customers ought to be taught from. Moreover, the blockchain skilled suggested customers to not overlook founders’ behavioral patterns. For example, “founders complaining that they’re operating out of cocaine” is a sign nobody ought to take flippantly.
The Ava Labs founder defined how crypto customers can take a look at new tasks for authenticity. He famous crypto has only a few genuine blockers at a time. For example, scalability and efficiency had been the excellent issues within the final cycle, and Avalanche and Solana supplied two approaches to deal with them.
Sirer believes the blockers for this cycle blockers must do with supporting a number of use instances on the identical platform and integrating with TradFi. He suggested customers to probe new tasks to see if they create one thing game-changing to handle the numerous points dealing with crypto.
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