How To Keep away from One other SBF Expertise In The Coming L2 Cycle – Aval Labs CEO

• Ava Labs CEO has highlighted the crimson flags to contemplate earlier than investing in new L2 tasks.
• In keeping with Sirer, ignoring these crimson flags may 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 crimson flags customers ought to think about earlier than investing in new L2 tasks within the upcoming cycle. In keeping with Sirer, ignoring these crimson flags may result in an consequence much like what occurred with Sam Bankman-Fried, whom many individuals adopted primarily based on superficial traits.

Sirer listed the crimson flags through a current publish on X, noting the absence of a story that matches the challenge 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 keeping with him, the third prong of the Howey Check qualifies such workout routines 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 in opposition to 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 calmly.

The Ava Labs founder defined how crypto customers can check 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 bring about one thing game-changing to handle the numerous points going through crypto.