Many Worlds Founder, Steve Bumbera, on the Way Forward for Crypto
Bumbera spoke with CARLA GATT about why he believes the Terra Luna crash occurred. He outlined the way forward when it comes to regulating cryptocurrency and the Blockchain future.
Bumbera is a confessed computer wiz. After he graduated from New Haven, he spent five years in the Marine Corps, where he worked in Signals Intelligence and Electronic Warfare. Passionate about both the financial and technological world, he quickly carved out a space for himself in the cryptocurrency world. With the help of his team, he launched the Many Worlds ($MANY) crypto tokens. He developed a sophisticated set of entirely new tokenomics as a solution to what he considered a broken system.
1. Was the Luna crash an attack?
People tend not to do any research whatsoever before participating in a project. Luna and UST never hid what they were doing. They were a giant experiment; they were algorithmically backed to bitcoin, which in turn was supposed to be pegged to the US dollar without any US dollars backing it.
This crash would have never really happened if UST and Luna were tied to the US dollar. You will never see Binance USD (BUSD) lose its peg. For every one BUSD in existence, there is one US Dollar. That is very open and transparent. Binance is very open about its stable coin system. That is not what you have with Luna or UST. The Algo-backed stable coin was never a good idea to start with. It is only a good idea if you do it percentage-wise.
So, say I am maintaining a peg to the US dollar but really, I am backed by bitcoin but what I should have is at least 50 percent cash reserve stored away in the case that bitcoin crashes. But to say that you have nothing… to say that you are backed to a fiat currency and have none of that fiat currency in reserve… is insane.
I think ‘an attack’ is an easier answer and it is easier for consumers to digest than I made a bad choice. It’s very possible that there was an attack. There is good reason to believe there was some corporate financial institution that bought a ton of LUNA and then dumped it as Bitcoin. Well, that would be an awesome attack for a big corporate because:
A: it is going to destabilize the crypto world
B: it is going to give ammunition to regulators to fight off stable coins. You must remember that big corporate financial companies are their biggest competitors. Stable coins are going to pose a huge threat to modern finance.
C: They get to make a ton of money at the same time.
So, if there was some sort of attack, it adds up. It is definitely a smart attack, but I think that the Terra LUNA project was not set up well. It crashed because it wasn’t good; it wasn’t secure and now people will want to claim any reason or rationale other than ‘I made a bad choice by buying it.’
2. Is it over for Terra Luna?
Oh no! This is crypto. You can come back from the dead anytime, many times over. They absolutely could come back to life with no problem.
I don’t want to say it’s over because there is no such thing as over in crypto. A brand-new development team might come and rebrand and build something entirely different like what happened with Shiba Inu, the meme coin that was just sitting there for a year or two years. Everyone expected it to just flatline. No one was doing anything with it and then out of nowhere, people are now becoming billionaires overnight. It’s crazy.
However, once you are on the chain and this project was on the chain, reviving it may be difficult. Once it gets de-listed from several places where it was listed, that is what is going to make it very difficult for Terra Luna to come back and say:
“Hey, we are back now! We fixed the problem, relist us and we promise it won’t happen again!”
It is more that the brand is probably destroyed. That would be hard to repair at this point. The trust factor is at play.
3. Do you think people should have been warier that this was an altcoin and not Bitcoin before investing in Terra LUNA?
I think people need to know what they are investing in and if things go wrong simply accept it. Everyone knew Luna was an algo-backed stable coin; It wasn’t a secret. You should have known if you were putting money into it that this was not a fiat-backed stable coin and there was a chance that this could end poorly. I think it comes down to individual people. I hate to say but it’s the truth. And you know what? This plays right into the regulation thing because the idea that we need to protect investors is exactly what causes regulators to overstep their bounds.
Now they are going to come in and they are going to say: ‘Look at what happened! If we had regulations in place, we could have prevented this.” However, they will regulate it in a way that only credited investors will be the only ones able to purchase cryptocurrency. They are going to do something that helps a certain class of individuals.
4. Do you think that if regulators take over, blockchain won’t be so decentralized?
I haven’t seen any regulations yet. Who is regulating it and how is this important? Things like the Terra Luna crash cause panic and give ammunition to regulators who say: ‘We need to protect the investors.’ The investors knew that this was an algo-backed stable coin. They chose to do it anyways and this gives ‘false’ credibility to these regulators who can now do their ‘song and dance’ about protecting the investor and having a case to back them and their need to overregulate. I think it’s going to turn ugly. I hope it doesn’t continue turning ugly, but I certainly hope that what happened won’t be the ammunition that will fuel a lot of decisions that regulators will certainly make in the coming weeks and months. I hope that people will look at this and consider the fact that this was no secret: This was an algorithmically backed stable coin and anyone who bought it should have known that before buying it.
5. A lot of people are interested in jumping on the blockchain bandwagon and are learning about it and experimenting with it. How do you see this going forward?
With Many Worlds, the plan is to accelerate that. Our mission is to help other projects and other companies convert to the blockchain. We are at the beginning and currently non-wealthy. We are doing that on an extremely small scale at present. There are going to be more and more projects doing that. I think mass adoption is on its way. I think that since the government wants control over this, we will get the US stable coin which will replace the US dollar. I think a lot of people are going to have a lot of difficulty with that transition across the world but that will be the real turning point. The opening door to mass adoption is when the US stable coin starts rolling out. Until then a lot of projects will be struck again, and they will be unable to survive. I do not think it is going to be very pretty because of what I am getting at in the nearer term. Having said that, in the longer term this technology is far superior to the current one. Blockchain is open-source and decentralized.
6. Do you think crypto should be considered an investment?
It is not investment or the stock market. Bitcoin does not generate revenue. It is not going to have or generate financial reports and there is zero fundamental analysis on it. So how can you do any fundamental analysis on the projects when there is no revenue and no quarterly reports? There are no costs. Some projects run just like a company does, but they are not required to report as a normal trading company does. People look at crypto from that investment lens and that is not what it is. It needs its zone app. It doesn’t fit nicely into security; it doesn’t fit nicely into a currency; it doesn’t fit nicely into a commodity. It can dip its toe into any asset class, but it doesn’t quite fit all the way. Crypto needs regulatory instruction badly because it needs to be truly defined through a regulatory lens so that it can be truly defined from an investor’s perspective.
From a technical lens, Terra LUNA was an algo-backed stable coin and thus, it was a failure as an experiment.
From a finance lens putting all your money in crypto is a bad idea let alone putting all your money in a crypto-based project that is an experimental stable coin. From a regulatory perspective, this is annoying because now we are going to start seeing articles like stable coins are not as stable as one may think. They are stable. Terra LUNA was not stable because of the way it was backed. We will now encounter a barrage of news saying how dangerous crypto is. The regulators will then step in saying how much they are needed on board.
7. Where is Manyworlds at right now?
We are in an area of turbulence; we have this big idea but now crypto crashed and we have been slowly pivoting and shifting the backend. We are trying to fit some sort of existing framework into the regulatory system. I am a navy veteran in the US. I want a business that courts the US. The US is making it difficult to start a business on the blockchain without breaking some sort of law. The project is at a stage where we are trying to figure out where can we fit in in a way that makes sense based on what we do. There is this big overhaul conversion on the possibilities we could do. It is interesting and our project is also an experiment. Regulation is at the forefront of our minds, and we can help companies and projects get themselves involved in Web 3 and Blockchain. We want to bring forth the best option but in a way that is palpable for everyone.
With regards to regulation, I fear that the US will unfortunately screw itself over. Blockchain exists because the internet exists. It doesn’t take much to power blockchain tech other than participation. If the US doesn’t wake up, all these blockchain companies and enthusiasts will go and pour their money into countries that are blockchain and crypto-friendly and they want to participate in this new explosive environment. The US is just going to have a rude awakening when revenue will benefit all these other countries. They will be missing out.
Many Worlds is a bridge to the financial and technological culture of Blockchain. Its development team consists of global finance, engineering, technology, and marketing experts.
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