Forbes: The collapse of UST will become the foundation for innovation in the crypto market – Bits Media

Forbes magazine analysts believe, that the fall of the UST stablecoin is a failed attempt to challenge centralization, which will lead to the development of more advanced decentralized products.

With the advent of the default of the Terra project, the cryptocurrency market experienced the “fifth reboot". The author of the article compares
LUNA incident with a bearish trend in the market, which has been observed by the crypto community several times in past years. The publication's experts note, that all cases of falling cryptocurrencies sooner or later led to an increase in market capitalization and new turns in the development of the industry.

The situation with the UST stablecoin caused a reaction on the crypto market akin to the bankruptcy of Mt. Gox в 2014 year, The DAO's disaster 2016 year, bursting ICO bubble in 2018 year and loss 40% value of digital assets in March 2020 of the year.

Forbes experts believe, that the collapse of LUNA is a good example of investor greed, which sometimes completely suppresses sound thinking and the instinct of self-preservation. On the other side, according to the authors of the article, Terra's fall could mark the end of the era of algorithmic stablecoins, in which the community has lost trust – as happened previously with the ICO market.

The authors believe, that rash actions and greed served as a catalyst, launched the default Terra, the rest is a result of the centralized nature of the modern global market. Launching UST was the solution, which should once again remind, that despite the current overregulation of markets, cryptocurrencies are primarily a decentralized product. According to Forbes, the creation of an algorithmic stablecoin is nothing less than a challenge to the completely centralized market of traditional stablecoins with its market capitalization of $126 billion.

"The tragedy is, what, although greed, undoubtedly, was a key reason for the fall of Luna, the creation of the cryptocurrency was driven by the desire to protect the decentralized spirit of the project, which the growing stablecoin industry has effectively abandoned.”, — the authors of the article believe.

Despite the unsuccessful attempt, the next cryptocurrency product will be more successful and viable, confident in Forbes. As an example, the publication’s analysts cite the fact, that two exchange giants Coinbase and Kraken have occupied Mt's niche in a few years. Gox. And the fall of DAO and ICO fraud became the foundation for a decentralized financial system (DeFi).

Recall, in 2021 year, the analytical company ShapeShift said, that the DeFi industry boom has led to the development of algorithmic stablecoins, which were designed to help reduce market volatility.