Andre Cronje left many of his crypto projects. Crypto community is now questioning whether to trust promoter led crypto projects.
From Sunday, the news of Andre Cronje quitting several projects is spreading like wildfire.
The coins or tokens of those projects are tanking.
Andre Cronje Led Projects Tumble
On March 5, Fantom held 4.59% of the Total Value Locked (TVL) in all blockchain protocols according to Defi Llama. Next day, the TVL was reduced to 3.74%. In the span of a day, the change in the TVL was 20%. At the moment, it holds assets worth $7.17 billion.
Fantom is currently trading for 1.34 USDT on Binance down from 1.68 USDT a couple of days ago.
The same is the case for YFI, which is right now trading for 18,100 USDT. It opened at 20,268 on March 6.
A major drop has been witnessed in Solidly which dumped by 75%.
Market sentiment is negative for Cronje led projects.
Well, promoters leave companies or projects, but this does not mean the enterprise will shut down. The development of the project will not stop.
Projects Can Survive Beyond Promoters
On December 12, 2010, Satoshi Nakamoto, the creator of Bitcoin posted his last public announcement. After that, he disappeared. But the project did not stop. It kept on developing and has become the reserve currency of crypto-verse.
The same was asserted by Fantom Foundation.
Promoter led crypto projects tumble, when the promoter has left and either the rest of the team has a flawed vision or the project development stops.
It is not the case in Web3.
DeFi projects are meant to be decentralized. Web3 stands for community ownership. So, the community leads the project.
Many altcoins have been accused of being quite centralized. In this case, a small group of people or the developing foundation holds a major chunk of the coin or token. They are no different from the Web2 corporations. These projects should be avoided.
How Do Projects Run After Founder’s Exit?
A truly decentralized project has no promoter. Satoshi’s disappearance has turned out to be a blessing in disguise for Bitcoin. It is the pinnacle of community ownership of an asset or enterprise.
Andre Cronje’s exit might also result in something similar.
If a project can survive the severance of early developers and thrive, it would become a truly decentralized project.
Cronje has not kept any YFI governance token for himself. He distributed them to the community with a view to achieving complete community ownership. Moreover, the projects are open-source; anyone can build upon the existing work. So development should not be a concern.
The projects he worked with have robust teams that do not depend on just a single person. So, they are expected to stay firm on their ground.
The slump in the price of the coins or tokens may be temporary.
Ethereum also had many stalwarts as early developers and cofounders such as Gavin Wood and Charles Hoskinson. Their exits did not deter it from becoming the largest DeFi blockchain network.
So, it depends on numerous factors whether a project is completely dependent on a promoter or not.
A promoter holding immense power is bad. That can result in scams. The whole team, tokenomics, development, and numerous other factors should be studied in order to evaluate the credibility of a project.
News recommendation: Is Web3 Completely Decentralized?
Cover Photo Source: Linkedin
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