Since the FTX blowout, many centralized industry players have scrambled to find solutions that would restore customers’ trust badly shaken by the events. One such is the leading cloud-based instant messaging app Telegram.
CEO Pavel Durov via telegram channel announced that they would soon embark on building “non-custodial wallets” and “decentralized exchanges,” allowing millions of users safely trade their crypto.
The blockchain industry was built on the promise of decentralization, but ended up being concentrated in the hands of a few who began to abuse their power. As a result, a lot of people lost their money when FTX, one of the largest exchanges, went bankrupt.
According to Durov, the solution for blockchain-based projects is to return to its decentralized roots. Users of cryptocurrencies should move to self-hosted wallets and transactions that are not trusted by any single third party.
Durov highlighted its brand new decentralized project called Fragment built on The Open Network, or TON which he claimed took only 5 weeks and 5 people to put together.
Telegram’s Fragment grants people complete ownership of respective usernames. Durov claimed that the platform’s launch was a success with $50 million worth of usernames sold there in less than a month.
In the coming weeks, Fragment will expand beyond usernames, he added.
The next stage for Telegram is to create a collection of decentralized tools that will enable millions of individuals to securely trade and store cryptocurrencies. These tools will include non-custodial wallets and decentralized exchanges.
“This way we can fix the wrongs caused by the excessive centralization, which let down hundreds of thousands of cryptocurrency users,” the CEO stated.
The collapse of the now-bankrupt cryptocurrency exchange FTX has shone the spotlight on many centralized platforms. The SBF-led exchange was found to be using customer-deposited crypto assets to mitigate its own business losses.
FTX Fiasco Has Driven Users To Opt For Decentralized Alternatives
The revelation of the unethical practices has triggered panic among investors who are already losing trust in these centralized trading firms.
Following the FTX debacle, exchange outflows tapped all-time highs of 106,000 BTC each month, and the lack of confidence in centralized exchanges [CEXs] has driven investors into self-custody and decentralized finance [DeFi] platforms.
On November 11, the day FTX filed for bankruptcy, Uniswap, one of the biggest decentralized exchanges in the ecosystem, recorded a considerable increase in trading volume.