I'd argue it's not so much crypto having an "incest" problem, it's that finance has an incest problem. For example, I think Credit Suisse was nearly insolvent in the last year from issues stemming from a few family offices making gigantic bad bets.<p>The difference with traditional finance and crypto is this.<p>> Traditional finance is more well-established and with far deeper pockets and most of the clowns have long since been killed off, so it takes a lot longer for issues to pop up in traditional finance.<p>> Unlike Crypto, traditional finance has an incestuous relationship with government officials and they get bailed out by daddy government when they fuck up. This creates a perverse incentive for shady actions because they know they'll either win a bet or get bailed out either way.<p>> Crypto is more publicly transparent than traditional finance. A central crypto exchange can try and publish addresses of their holdings in an attempt to at least partially prove assets and solvency, and I think there's a few systems being engineered to mathematically prove their entire assets and liabilities to prove complete solvency in a trustless manner. But as far as I know, there's no real mechanism for this in traditional finance other than various levels of semi-bullshit "independent audits". And I'd bet at least some traditional finance systemic problems can be swept under the rug for quite a while. The system allegedly has rules against naked shorting and other things that are clearly ignored by the SEC, as just one of many tiny examples.<p>PS: What's with the clickbait headline? LMAO. What next? "Crypto gives blind orphans cancer".
The fact that losses of just hundreds of millions dominoed so many companies shows how interlocked and non-robust and leveraged this system was. Though on a percentage basis I'm not sure if this was much worse than Long Term Capital Management or the various collapses that happened to cause the Great Recession.<p>So congratulations on recapitulating previous failures of the financial system? Only with 'algorithmic stablecoins'. Entangling everybody and everyone in pursuit of the largest margins. Making dozens of sub-companies to obfuscate who's investing in who (who oftentimes was investing right back in the original who).<p>Build an actual market of goods that people want and then the financial system can follow. You can grow money on trees, but you need actual ground to invest that money in for the production of more trees if you want anything that isn't ultimately Wiley E. Coyote running on air.