Emin Gün Sirer, CEO of Ava Labs, warns of a wave of dangerous crypto projects during the next bull market.
The Void Left by Sam Bankman-Fried
With the fall of FTX CEO Sam Bankman-Fried, Gün Sirer believes that worse forms of fraud will emerge, particularly in the form of “trash L2s” (layer-2 solutions).
Red Flags of Trash L2s
Gün Sirer outlines red flags to watch out for:
- Mismatched project narrative and technology (e.g., centralized sequencers, lack of fraud proofs)
- Projects selling tokens to fund future development (potential securities offerings)
- Founders dumping personal tokens before launch
- Very low float tokens (used for market manipulation)
Scrutinizing Prominent Voices
Gün Sirer urges caution against blindly trusting prominent voices in the industry and calls for vigilance against potential “sociopaths” who may fill the void left by Bankman-Fried.
Addressing Crypto’s Blockers
Gün Sirer emphasizes the need to identify and address the key challenges facing crypto adoption, such as supporting multiple use cases and integrating with traditional finance. He encourages skepticism and careful evaluation of projects claiming to solve these issues.
Conclusion
The crypto market is expected to face a surge in fraudulent projects, and investors are advised to be vigilant and thoroughly research before making any investments.
