Some crypto VCs see decentralization as the future after the collapse of FTX

Like crypto the market absorbs the last few days on chaosventure capitalists see the moment as a warning, but also as an opportunity for the growth of decentralization and the maturation of the larger blockchain space.

“As venture capitalists, we take a long-term view of the industry; despite the current market turmoil, we are actively evaluating and investing in the right opportunities,” Mark Weinstein, founding partner of Mechanism Capital, told TechCrunch. “The premise of DeFi, if anything, has been reinforced by the collapse of centralized entities from opaque counterparty relationships.”

Decentralized finance (DeFi) is often associated with trusting blockchain technology to perform services through smart contracts, while centralized finance (CeFi) usually refers to more traditional business models and involves people managing funds and manually performing services.

“Market sentiment is shaky, but committed VCs with experience of several crypto market cycles will continue to invest.” Mark Weinstein, Founding Partner of Mechanism Capital

Historically, the venture market doesn’t get “too offended” by what happens in secondary markets, David Gunn, general partner at OP Crypto, told TechCrunch. Regardless, he said, FTX’s apparent demise is sad for everyone, “not just in the VC space, but everywhere.”

When there are massive crashes and burns, it speaks to what we’ve seen over the last decade: It’s the Wild West out there, Samantha Lewis, director of Mercury, told TechCrunch.

“When I sum it all up, I see that this is a continuation of the phase that started when winter hit and we saw Moon and all these crazy companies crash and burn like BlockFi, Celsius and now we have FTX,” Lewis said. “As an early-stage venture investor, that tells me the hype has certainly died down now. But it marks the beginning of the maturing of space that many of us have longed for for a very long time.”

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