Leading cryptocurrency exchanges should create a single mechanism for a trading halt in emergency situations, said Tushar Jain, managing partner of Multicoin Capital Investment Fund.
Today’s price moves in crypto are a strong argument for industry wide circuit breakers. The crypto markets structurally broke today & leading exchanges need to work together to prevent a repeat.@CryptoHayes @cz_binance @brian_armstrong @jespow @SBF_Alameda @JayHao8 @CiaraHuobi
— Tushar Jain (@TusharJain_) March 13, 2020
He noted that what is happening on the market “is a strong argument” in favor of his argument.
A similar mechanism is used in US stock markets. This week it was used twice – on March 9 and 12.
Jain also said that the DeFi ecosystem “nearly died” amid a market crash. Many traders did not manage to raise funds due to network congestion, he stressed.
“If we just all need to accept that crypto can drop by 60%+ in a day that *severely* limits the usefulness of this tech. Exchanges’ incentives are aligned with market growth. If markets can drop 60%+ in a day, the addressable market for this tech is much smaller,” Jain wrote.
ShapeShift cryptocurrency platform CEO Erik Voorhees disagreed.
No, Bitcoin as a store of value isn’t dead just because it had a super shitty day. No, Ethereum and defi aren’t dead just because they had a super shitty day. In the coming months the world will see what anti-fragile means.
— Erik Voorhees (@ErikVoorhees) March 13, 2020
Jain responded by emphasizing his concern that “DeFi cannot be sustainable if the whole ecosystem could get liquidated in less than 24 hours. That was a real risk today..”
Recall that several large bitcoin exchanges announced problems in their operations against the backdrop of a market collapse