The co-founder of Tezos, Kathleen Breitman gave her opinion on how the staked Ether (stETH) is similar to HEX, and how the fall of Celsius was not surprising in a recent interview.
HEX has been criticized due to undefined factors surrounding the project and its founder and has even been called a Ponzi scheme.
stEth was launched by Lido Finance in 2020 and represents a unit of Ether (ETH) that has been staked in the beacon chain in preparation for Ethereum’s upcoming transition to a Proof-of-Stake (PoS) consensus mechanism.
People who stake their tokens will receive competitive annual rewards, claimable after the upgrade.
Breitman believes that while stEth reduces the amount of Eth in circulation, it is in essence no different than HEX.
She said, “People would borrow Ethereum and buy staked Ethereum. That took a lot of Ethereum out of circulation, which arguably increased the price. But in reality, it is really no different than something like HEX, which is a Ponzi scheme that’s crashed in the last few weeks.”
While talking about the current market scenario and the downfall of Celsius and Three Arrows Capital, She said that it was unsurprising because the business operated on an unsustainable model.
“For those of us who have been in this industry for quite some time, it’s completely unsurprising that something like Celsius would go bankrupt… You really can’t make a sustainable protocol or business based on the theory that numbers will always go up, which was most wheel’s risk model going into this,” she said.
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Breitman also said that the model of Three Arrows Capital was ‘uniquely bad’ with no chance of surviving.
