Gavin Wood, who co-founded Ethereum and also coined the term Web3, appealed to the crypto community to pay more attention to what is backing their investments before they choose to go all in.
While speaking on the sidelines of the World Economic Forum in the Swiss Alpine resort of Davos, Wood told Reuters – “I would hope that people pay more attention to what is belying the currency name when they get involved in a community, ecosystem, economy”.
Wood also unveiled the upcoming partnership between his blockchain project – Polkadot and the American billionaire Frank McCourt’s Project Liberty. He pointed out that the project aims to decentralize the web and enable access to user-controlled data. He said that “the internet has no real concept of legality because legality is something that is determined by sovereign nations”.
Wood stated, “Technology cannot prevent people from making mistakes but can help those who want to better understand the facts of the world, what they’re buying”. In light of this, Wood believes that with the decentralization of the web, users will be able to make wiser investment choices depending on the plethora of additional information that will be available to them.
Regulators Warn Against Fraudulent Crypto-Backings
The issue of what backs a crypto asset has become considerably potent post the Terra-Luna fiasco. Earlier this week, the International Monetary Fund’s (IMF) managing director Kristalina Georgieva argued that investment in stablecoins that are not backed by real-world assets is the same as investing in a Pyramid Scheme.
While speaking at the same event as the Ethereum co-founder, Georgieva specifically targeted algorithmic stablecoins like UST. She said, “the less there is backing it, the more you should be prepared to take the risk of this thing blowing up in your face”.
“It [crypto] offers us all faster service, much lower costs, and more inclusion, but only if we separate apples from oranges and bananas”, she said, further adding the need for better regulatory measures to ascertain consumer protection.