Telegram Slams Crypto Over Centralization, Plans Own Wallet, Exchange

Telegram’s founder and CEO Pavel Durov announced today on his Telegram channel that he is planning to build “to build a set of decentralized tools”. These will include non-custodial wallets and a decentralized cryptocurrency exchange. Durov also talked about the state of centralization in digital assets, and the role FTX played in it.

Telegram’s CEO Criticizes the Centralization of DeFi

Durov opened his statement by criticizing the current state of the crypto sector calling it overly centralized. According to Telegram’s CEO, this issue is best highlighted by the damage caused by the collapse of FTX and its multiple abuses of power throughout the years.

The blockchain industry was built on the promise of decentralization, but ended up being concentrated in the hands of a few who began to abuse their power. As a result, a lot of people lost their money when FTX, one of the largest exchanges, went bankrupt.

Throughout the years, many concerns over the centralization of what is supposed to be decentralized finance emerged. In 2021, after Elon Musk tanked the price of Bitcoin, fears that certain actors on social have too much influence on the sector started floating around. More recently, Ethereum was facing scrutiny over the perceived over-centralization of its blockchain in the run-up to its much-talked-about “merge”.

In the aftermath of FTX’s bankruptcy, new dangers came to light. Numerous reports on Sam Bankman-Fried’s lobbying efforts in Washington came out leading many to believe that large centralized exchanges have more than enough power to seriously endanger the foundations of the crypto industry.

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Telegram’s Plans for Decentralized Tools

According to the message, Durov believes that the best way to solve the current problems is to bring the sector back to its roots and build a set of decentralization tools to help prevent the concentration of power within the hands of a few large companies. Telegram’s CEO highlighted the recently-launched Fragment marketplace.

Telegram’s founder said the marketplace represents the proof that it is now feasible to build “fast and easy-to-use decentralized applications for the masses”. Fragment is built on Telegram’s TON blockchain—which Durov called far more efficient than even the post-merge Ethereum—and already saw the sale of $50 million worth of usernames.

While the post wasn’t entirely specific, Durov expressed his intent to build a set of decentralized tools. These are expected to include non-custodial wallets, and decentralized exchanges which should help people trade and store cryptocurrencies securely. The TRON foundation launched a P2P exchange charging a 0.9% transaction fee in early October on Telegram.

Update (1st December 2022) – Updated article to reflect that the TRON foundation maintains and created the @wallet Telegram bot, not Telegram.

Do you think Durov’s assessment of the state of crypto is correct? Let us know in the comments below.