The crypto market has been hit hard with trust issues in recent years, with numerous scandals and events that have left investors feeling uneasy. From the collapse of the Luna Empire to the FTX insolvency crisis, it’s no wonder that confidence in crypto assets is at an all-time low.
What led to these events? Experts say that centralization, fraudulent activities by major crypto market players, such as money laundering and get-rich-quick schemes, and a lack of transparency have all contributed to the mistrust in crypto assets.
Many [crypto] companies offered financial products with interest rates significantly higher than you’d get at a traditional bank.ANDREW R. CHOW in a recent Time Magazine article.
Celsius, a major lender, offered yields of up to 18%. Anchor, a program that was part of the Terra-Luna ecosystem, offered 20%. While these deals were met with skepticism, their creators —Celsius’s Alex Mashinsky and Terra-Luna’s Do Kwon—bragged that they had unlocked mechanisms that were simply better and smarter than their predecessors.ANDREW R. CHOW in a recent Time Magazine article.
Both companies have since gone bankrupt, proving that the promises of high returns and low risk are not always what they seem. Do Kwon is now wanted in his native South Korea for fraud.
But it’s not just crypto lenders and exchanges that have been mired in controversy—decentralized autonomous organizations (DAOs) have also been vulnerable to manipulation and power abuse. In July 2022, Chainalysis published a study revealing that just 1% of all holders had control over 90% of the voting power in multiple major DAOs.
“If just a fraction of the top 1% of holders coordinated, they could theoretically outvote the remaining 99% on any decision,” read the study. “This has obvious practical implications and, in terms of investor sentiment, likely affects whether small holders feel that they can meaningfully contribute to the proposal process.”
Can Trust Be Rebuilt?
Following the numerous scams and collapses, people are understandably hesitant to invest in crypto assets. But is there a way for trust to be restored? The answer is yes, and the solution may lie in truly decentralized networks that promote transparency, democracy, and decentralization.
The events of last year, for instance, demonstrate that if the code and operations had been made more transparent, these unfortunate events may have been avoided. When looking at Celsius and Terra-Luna, it’s clear that if their operations had been conducted in a more open and transparent manner, the failures of both companies could have been easily identified before their collapse.
This is where the ice network comes in. It is a decentralized network focusing on transparency, decentralization, and democratic governance. By introducing these elements into the ecosystem, the ice network has the potential to restore trust in the crypto market by eliminating fraud and abuse, providing a secure platform for making transactions, and creating an environment of collaboration and inclusivity.
At the heart of the ice network, the ice network founders say, is a governance system that empowers users to have a say in the direction and development of the network. By giving users the ability to vote directly on proposals, delegate their voting power, or participate in discussions, the network cultivates a culture of collaboration and inclusivity. This ensures that all voices are heard and considered, leading to a fairer and more transparent decision-making process.
Why Does Decentralization Matter?
In general, decentralization means that no one entity controls a whole system but rather that all participants contribute to it. The reason why democracy has been preferred to authoritarianism throughout the centuries is because it gives people the power to decide their own fate. The idea of “one person, one vote” is deeply embedded in the democratic values of fairness, equality, and justice. It ensures that decisions are based on the collective wisdom of all participants instead of a single entity or select few. If this principle is absent and a few users have near complete control over decision-making, democracy would no longer exist. It turns into an oligarchy.
The same applies to decentralization in blockchain networks—it creates a system of checks and balances, giving users greater control over the network and its operations. One of the primary reasons people invest in crypto assets is their belief in the idea that the future of finance will be built on trustless, decentralized networks that are free from centralized control. It’s the idea that today’s financial system is outdated, and a new one that is more secure, transparent, and democratic needs to be created.
More specifically, in the crypto world, decentralization concerns both the ownership structure (governance) and the technology (the ledger) that powers the network.
In terms of ownership structure, decentralized networks do not have a single entity controlling them. Instead, they are maintained by multiple users who work together to manage the network. In ice network’s case, this means that all users can contribute to the network’s development and direction while having an equal say in its decisions.
In terms of technology, decentralized networks are powered by distributed ledgers, meaning that the ledger is not stored in a single location but is instead stored on multiple computers worldwide. This ensures that data cannot be tampered with or manipulated, making it more secure and trustworthy.
When looking at all these factors together, no network appears to have taken decentralization and democracy more seriously than the ice network. The founders have created what seems to be the perfect combination of transparent governance, secure technology, and democratic decision-making. With open-source code, a robust system of checks and balances, and a culture of inclusivity, the ice network is looking to rewrite the rules of trust for crypto assets.