Long-standing crypto project vs. scam: Ava Labs CEO shares key difference
Emin Gün Sirer, creator of the Avalanche Consensus protocol and Ava Labs CEO, believes that there is one very straightforward method to spot a long-standing cryptocurrency project.
On Feb. 7 Sirer discussed blockchain venture capital and crypto regulation in a fireside chat with MarketAcross chief operations officer Itai Elizur at the Web3 builder-focused event, Building Blocks 23.
During the discussion, the Avalanche founder pointed out the crucial role of “staying power” in the crypto industry, condemning players that run from one project to another or jump into “every single new coin offering” in the hopes that they will go up. According to Sirer, the desire to reap quick profits from crypto will only turn the space into a terrible thing, and VCs are not to blame.
“I will tell you who’s to blame; it’s us,” Sirer declared, urging the community to support solid crypto initiatives and avoid scammy projects with a short life span. He then shared his “very simple test” of how to spot long-standing projects in crypto and stay away from those who make grand promises and then disappear.
“So look at the team behind any project, look at their staying power,” Ava Labs CEO said, adding that the regulating jurisdiction of a cryptocurrency firm provides one of the most important hints about its long-term capabilities. He stated:
“If a project is headquartered outside the United States, you know that it's some kind of a Cayman Bahamas et cetera, some kind of a tax haven, or Austin, Texas et cetera, they are there to sell points and disappear. They have no staying power.”Crypto firms headquartered in the Silicon Valley are likely to do “pure tech play,” Sirer argued. “They will do the one tech trick pony then they will disappear,” he noted.
Ava Labs CEO went on to say that long-lasting crypto projects are more likely to be headquartered in New York, “where the assets are” and that are integrated with financial institutions. “That's where we need to go,” Sirer stated, stressing that there are some people who devote their lives and careers to make things work in crypto. “VCs, of course, love the short lifespan projects,” he added.
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Additionally, Sirer emphasized the importance of always growing the space, even during a bear market. “In fact, I happen to like bear markets more. It's much more fun to be building when everyone is more rational,” the executive stated.
The latest remarks by Sirer add some new ideas about the executive's view of the cryptocurrency market. In 2020, Sirer argued that more than 95% of cryptocurrencies were nothing but scams. He also criticized use cases of new crypto initiatives, stating that Bitcoin was the first cryptocurrency to offer a peer-to-peer online payment method.