Ethereum co-founder, Vitalik Buterin, stated that the collapse of the Terra ecosystem, which crashed the algorithmic stablecoin TerraUSD (UST) and Terra (LUNA), is a kind of healthy moment in crypto reminding people that downsides are real.
Vitalik said this when he sat with Fortune alongside his father, Dima Buterin, on Father’s Day. After he was asked to comment about the effect of the Terra collapse on investors, he said the negative case of a built system will certainly happen eventually.
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Vitalik Buterin noted:
“I think in general, the Luna collapse is in some ways one of these important, kind of healthy moments in crypto reminding people that downsides are real. You can’t just build a system and magically pretend that the negative case is never going to happen.
“You can’t just worry about what the interest rates look like in the short term, you also have to worry about the fat tails, worry about these really exceptional situations. I think that’s insight that’s ultimately going to lead to a more stable crypto ecosystem at the same time.”
Read Also: Ethereum’s Vitalik Buterin Slams Terra: No Genuine Investment Can Promise 20% Returns Per Year
He added that whenever things like this happen in the crypto sphere “it’s one of the other silver linings that, at least in my experience, always happens is this morally clarifying moment where you can see how different people responded and you get a much better view of what their character is and what kind of people they actually are than you do during the good times.
When Dima, Vitalik’s father was asked to comment, he said the collapse of the Terra ecosystem was a very traumatic event for a lot of people who lost a lot of money.
Dima said he hopes to see people not being limited to “Let’s restrict. Let’s forbid. Let’s stop this.” He added that the incident has made people witness all kinds of consequences and lessons have been learned from all that happened, noting that “the lessons can keep moving us forward versus trying to keep us safe.”
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