On Wednesday, Pavel Durov, Telegram’s founder, took to his telegram channel to announce that the company is planning to build a set of decentralized products, including non-custodial crypto wallets and decentralized exchanges which would allow millions of crypto users to trade their assets securely.
This announcement comes amid the ongoing crisis surrounding the collapse of the popular crypto exchange FTX.
According to the founder, “The blockchain industry was built on the promise of decentralization but ended up concentrated in the hands of a few who began to abuse their power.”
Pavel believes the solution to the issues with centralization is that blockchain-based projects should return to their roots in decentralization. He also advises users to switch to trustless transactions and self-hosting wallets, which do not require reliance on a single third party.
FTX was accused of mishandling clients’ funds by lending them to Alameda research, its sister trading desk, an unusual practice for firms in the exchange business. And since FTX’s collapse and subsequent loss of customer funds, various questions have been raised concerning the management of centralized exchanges.
In the past few weeks, other exchanges in the space have begun implementing better checks and balances at their firms, including employing proof of reserves systems to verify possession of client’s funds on-chain.
Charles Hoskinson, the founder of Cardano, at the Financial Times Crypto and Digital Assets summit on Wednesday, repeated Durov’s position regarding FTX, thus, “The failures we are having aren’t failures of protocols, aren’t failures of DeFi. They are failures of trust, failures of regulations, and they are failures of people.
A host of other crypto users share the same sentiment. For instance, the general crypto market has felt the impact of FTX’s collapse with the severe draining of funds from major centralized crypto exchanges like Gemini, Crypto.com, and OKX since FTX filed for bankruptcy.
The telegram founder stated that developers could steer the blockchain industry from centralization by building easy-to-use decentralized applications for the masses. “This way, we can fix the wrongs caused by the excessive centralization, which let down hundreds of thousands of cryptocurrency users,” said Pavel Durov.
The founder emphasized the feasibility of such projects today using the bootstrapping of Fragment, Telegram’s decentralized auction platform built on The Open Network (TON) as an example. According to the Telegram founder, the project took only five weeks and five people, including himself. They noted that the platform is already successful after selling $50 million worth of usernames in less than a month.
Pavel Durov, in his address, called out Ethereum for being outdated and expensive to use even after its most recent upgrades. Thereby alluding to the success of Fragment to the fact that it was built on The Open Network, a blockchain that Durov had abandoned due to regulatory pressures in 2020 but which he later returned to after the community kept the project alive.
There is no doubt that the collapse of FTX triggered a crypto contagion which in turn affected several crypto lending companies. For instance, BlockFi has filed for bankruptcy, while others like Genesis have frozen withdrawals.
As with Binance, the TON network recently announced a $126 million rescue fund for the compensation of crypto projects due to FTX’s collapse.
Telegram and Crypto have always had a good relationship. Not only is Telegram one of the popular messaging apps among crypto traders, but it also enables users to buy and sell cryptocurrencies through The Open Network (TON).
