Contagion only hits companies with 'poor balance sheet management' - Kraken Aus boss

The crypto contagion only affected entities that mismanaged their cash, but did not affect the underlying blockchain technology, he said.
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The crypto contagion sparked by this year's infamous Terra implosion only spread to companies and protocols with 'poor balance sheet management' and not the underlying blockchain technology, says Jonathon Miller , managing director of Kraken Australia.

Speaking to Cointelegraph, the Australian crypto exchange head argued that sectors such as Ethereum-based decentralized finance (DeFi) have shown their fundamental strength this year in weathering tough market conditions :

“Some of the contagion that we saw in some of the lending models in the space, [was in] this kind of traditional crypto-enabled financial lending model. But what we didn’t see , it's kind of a catastrophic failure of the underlying protocols. And I think a lot of people have recognized that."

"Platforms like Ethereum didn't fail when volatility hit. You've seen decentralized markets, decentralized lending models, DeFi in general, fail. There was no contagion there What you've seen is balance sheet mismanagement by closed trade fee lenders,” he added.

Miller's comment comes despite CoinGecko reporting a 74.6% drop in DeFi market capitalization during the second quarter of 2022 following the collapse of Terra and an increase in DeFi exploits. Although the crypto data aggregator also noted that the industry has managed to retain most of its daily active users.

Miller also added that blockchain projects only run into trouble when the design of their underlying protocols is "obviously poor", as in the case of TerraClassic USD (USTC) algorithmic stablecoin Terra.
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"I think it's a trade-off. It's a treasury management problem, not a blockchain problem," he said.

When asked how Kraken has fared in the crypto bear market this year, Miller suggested that the company is well prepared to deal with volatility. He noted that the company has

Crypto Aug 3, 2022 0 97 Add to Reading List

Contagion only hits companies with 'poor balance sheet management' - Kraken Aus boss

The crypto contagion only affected entities that mismanaged their cash, but did not affect the underlying blockchain technology, he said.

Contagion only hit firms with 'poor balance sheet management' — Kraken Aus boss

New

The crypto contagion sparked by this year's infamous Terra implosion only spread to companies and protocols with 'poor balance sheet management' and not the underlying blockchain technology, says Jonathon Miller , managing director of Kraken Australia.

Speaking to Cointelegraph, the Australian crypto exchange head argued that sectors such as Ethereum-based decentralized finance (DeFi) have shown their fundamental strength this year in weathering tough market conditions :

“Some of the contagion that we saw in some of the lending models in the space, [was in] this kind of traditional crypto-enabled financial lending model. But what we didn’t see , it's kind of a catastrophic failure of the underlying protocols. And I think a lot of people have recognized that."

"Platforms like Ethereum didn't fail when volatility hit. You've seen decentralized markets, decentralized lending models, DeFi in general, fail. There was no contagion there What you've seen is balance sheet mismanagement by closed trade fee lenders,” he added.

Miller's comment comes despite CoinGecko reporting a 74.6% drop in DeFi market capitalization during the second quarter of 2022 following the collapse of Terra and an increase in DeFi exploits. Although the crypto data aggregator also noted that the industry has managed to retain most of its daily active users.

Miller also added that blockchain projects only run into trouble when the design of their underlying protocols is "obviously poor", as in the case of TerraClassic USD (USTC) algorithmic stablecoin Terra.

"I think it's a trade-off. It's a treasury management problem, not a blockchain problem," he said.

When asked how Kraken has fared in the crypto bear market this year, Miller suggested that the company is well prepared to deal with volatility. He noted that the company has